Essent Group (ESNT) Investor presentation summary

U.S. housing and private mortgage insurance market fundamentals

• U.S. housing market valued at ~$45 trillion, with ~$13 trillion in residential debt and ~$1.5 trillion insured by private mortgage insurance (MI).

• Private MI is essential for enabling homeownership for borrowers with less than 20% down payment, supporting equitable and affordable access.

• Favorable demographics and limited housing inventory support stable demand for MI, especially among first-time homebuyers.

• Industry reforms have strengthened underwriting standards, risk-based pricing, and capital adequacy, enhancing credit quality.

• The private MI market has grown steadily, with a 6% CAGR in insurance in force (IIF) and Essent holding a 16% market share by mid-2025.

Essent’s business model, differentiation, and financial performance

• Essent operates a "Buy, Manage & Distribute" model, leveraging programmatic reinsurance and a proprietary credit engine, EssentEDGE®, for dynamic risk management.

• Maintains one of the lowest debt-to-capital ratios (~8%) and highest financial strength ratings among peers.

• Demonstrates industry-leading efficiency with the lowest expense ratio and high operating leverage.

• Book value per share has grown at an annualized rate of 18.2% since 2013, supported by strong cash flows and disciplined capital management.

• Resilient during macroeconomic stress, outperforming peers in delinquency rates, capital sufficiency, and ROE during the COVID-19 pandemic.

Recent developments and capital management

• Moody’s upgraded Essent Guaranty’s rating to A2 and Essent Group’s senior debt to Baa2 in August 2025, both with stable outlooks.

• Entered new quota share and excess of loss reinsurance agreements in 2025, covering a significant portion of new insurance written.

• As of June 2025, 97% of insurance in force is protected by reinsurance, with $9.5B ceded through quota share treaties and $1.4B in ILN/XOL coverage.

• Maintains strong liquidity ($1.0B at HoldCo), a robust capital position (PMIERS sufficiency ratio of 176%), and a risk-to-capital ratio below 10:1.

• Capital allocation prioritizes organic growth, attractive and growing dividends, share repurchases, and strategic M&A, while maintaining a buffer against shocks.