Enact (ACT) Q2 2024 earnings summary

Executive summary

• Delivered strong Q2 2024 results with GAAP net income of $184M ($1.16/diluted share) and adjusted operating income of $201M ($1.27/diluted share), both up sequentially and year-over-year.

• Achieved record primary insurance in-force of $266B, a 3% increase from Q2 2023, driven by $14B in new insurance written and 83% persistency.

• Operating expenses were $56M, including $3M in one-time restructuring costs; expense ratio was 23%.

• Total capital returned to shareholders in Q2 was $78M through dividends and share buybacks, with 2024 capital return guidance raised to $300–$350M.

• Helped 37,500 households achieve homeownership and 3,500 households retain homes in Q2.

Financial highlights

• Net income for Q2 2024 was $184M ($1.16/diluted share); adjusted operating income was $201M ($1.27/diluted share).

• Net premiums earned were $245M, up 2% sequentially and 3% year-over-year; net investment income reached $60M, up 5% sequentially and 17% year-over-year.

• Losses incurred were $(17)M, with a loss ratio of (7)%, reflecting a $77M reserve release due to favorable cure performance and lower claim rate expectations.

• Book value per share was $30.91 ($32.43 excluding AOCI); debt to capital ratio improved to 13%.

• Return on equity was 15.4% (up from 13.8% in Q1 2024); adjusted operating ROE was 16.9%.

Outlook and guidance

• 2024 capital return guidance increased to $300–$350M, with $110M expected through dividends and $190–$240M via share buybacks.

• Full-year NIW market size expected to be in line with 2023 at around $285B, with potential upside if rates decline.

• Expenses (excluding restructuring) guided to $220–$225M for 2024.

• Lowered expected claim rate on new and existing delinquencies from 10% to 9% due to favorable cure performance and market expectations.

• Management expects continued strong capital position, with focus on disciplined capital returns and ongoing monitoring of regulatory and competitive environments.