Essent Reports Second Quarter 2019 Results

August 5, 2019 | 0 Comments

Bermuda-based Essent Group Ltd. reported net income for the quarter ended June 30, 2019 of $136.4 million or $1.39 per diluted share, compared to $111.8 million or $1.14 per diluted share for the quarter ended June 30, 2018.

Essent also announced that its Board of Directors has declared a quarterly cash dividend of $0.15 per common share. The dividend is payable on September 16, 2019, to shareholders of record on September 4, 2019.

“We are pleased with our strong financial results for the second quarter and our continued progress in transitioning our franchise to a buy, manage and distribute model through utilization of EssentEDGE and reinsurance,” said Mark Casale, Chairman and Chief Executive Officer.

“Our performance, along with the use of reinsurance, continues to generate excess capital. As a result, we are pleased to announce our inaugural dividend and believe that it is a tangible demonstration of the benefits in a buy, manage and distribute operating model.”

Financial Highlights:

  • Insurance in force as of June 30, 2019 was $153.3 billion, compared to $143.2 billion as of March 31, 2019 and $122.5 billion as of June 30, 2018.
  • New insurance written for the second quarter was $18.0 billion, compared to $11.0 billion in the first quarter of 2019 and $12.9 billion in the second quarter of 2018.
  • Net premiums earned for the second quarter were $188.5 million, compared to $177.8 million in the first quarter of 2019 and $157.0 million in the second quarter of 2018.
  • The expense ratio for the second quarter was 22.0%, compared to 23.1% in the first quarter of 2019 and 23.2% in the second quarter of 2018.
  • The provision for losses and LAE for the second quarter was $5.0 million, compared to a provision of $7.1 million in the first quarter of 2019 and a provision of $1.8 million in the second quarter of 2018.
  • The percentage of loans in default as of June 30, 2019 was 0.66%, compared to 0.65% as of March 31, 2019 and 0.64% as of June 30, 2018.
  • The combined ratio for the second quarter was 24.7%, compared to 27.1% in the first quarter of 2019 and 24.4% in the second quarter of 2018.
  • The consolidated balance of cash and investments at June 30, 2019 was $3.2 billion, including cash and investment balances at Essent Group Ltd. of $72.0 million.
  • The combined risk-to-capital ratio of the U.S. mortgage insurance business, which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., was 13.6:1 as of June 30, 2019.
  • In June, Essent Guaranty, Inc. obtained $333.8 million of excess of loss reinsurance coverage on mortgage insurance policies written by Essent in 2015 and 2016. The reinsurance is fully collateralized by ten-year mortgage insurance-linked notes [“ILNs”] issued by Radnor Re 2019-2 Ltd., an unaffiliated special purpose insurer.
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