Enact (ACT) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 adjusted operating income of $182M and GAAP net income of $181M ($1.15 per diluted share), with adjusted EPS of $1.16 and adjusted ROE of 14.8%.

• Insurance in-force reached a record $268B, up $2B sequentially and $6B year-over-year, with persistency at 83%.

• Returned $100M to shareholders in Q3 via $29M in dividends and $71M in share buybacks; $137M remains authorized for repurchases.

• Maintained robust capital position with PMIERS sufficiency at 173% ($2.2B above requirements) and low financial leverage (debt-to-capital ratio 13%).

• S&P assigned Enact Re an A- rating with a stable outlook, supporting future expansion.

Financial highlights

• Net premiums earned were $249M, up 2% sequentially and year-over-year, driven by insurance in-force growth and CRT participation.

• Net investment income was $61M, up 11% year-over-year; portfolio yield was 3.9%.

• Losses incurred were $12M (loss ratio 5%), reflecting favorable reserve development and strong cure performance.

• Operating expenses were $56M (expense ratio 22%), with full-year expenses expected within $220M-$225M guidance.

• Book value per share excluding AOCI grew to $37.90, a 52% increase since IPO.

Outlook and guidance

• Full-year 2024 capital return expected at the upper end of $300M-$350M guidance, subject to business performance and regulatory approvals.

• Operating expenses projected to be flat to down versus 2023, with persistency expected to remain elevated.

• Anticipate gradual growth in Enact Re, with long-term focus on prudent expansion and attractive returns.