Essent Group (ESNT) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $203.6 million ($1.91 per diluted share), up from $172.2 million ($1.61 per share) year-over-year, with annualized ROE reaching 15.4%.

• Book value per share rose to $50.58 at June 30, 2024, reflecting an 18.7% annualized growth rate since 2013.

• U.S. mortgage insurance in force grew to $241 billion, with persistency at 86.7% and a weighted average FICO of 746.

• 94% of insurance in force is protected by reinsurance, supporting risk management and capital efficiency.

• Title insurance and settlement services, acquired in July 2023, contributed $37.2 million in revenue for the six months ended June 30, 2024.

Financial highlights

• Total revenues for Q2 2024 were $312.9 million, up from $260.1 million in Q2 2023; net premiums earned were $251.9 million, with $16.6 million from title operations.

• Net investment income rose to $56.1 million in Q2 2024, with an annualized yield of 3.8%.

• Benefit for losses and LAE was $0.3 million in Q2 2024, compared to a provision of $9.9 million last quarter.

• Combined ratio for Q2 2024 was 26.0%.

• Book value per share rose to $50.58 at June 30, 2024.

Outlook and guidance

• Management expects higher mortgage rates to support persistency and investment income but may suppress new insurance written.

• Board declared a $0.28 per share quarterly dividend for Q3 2024.

• Entered into an excess of loss reinsurance transaction covering 15% of eligible 2024 NIW, effective July 1.

• Sufficient liquidity and capital are expected to meet obligations and support growth over the next 12 months.

• No material impact from recent U.S. or Bermuda tax reforms expected until at least 2030.