Essent Group (ESNT) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $176.2 million ($1.65 per diluted share), nearly flat year-over-year, and down from $203.6 million in Q2 2024; book value per share rose to $53.11 at September 30, 2024.

• Insurance in force reached $243.0 billion, with new insurance written steady at $12.5 billion for the quarter and persistency at 86.6%.

• Portfolio quality remains strong, with a weighted average FICO of 746–747 and original LTV of 93%.

• 96% of insurance in force is protected by reinsurance, mitigating risk exposure.

• The business model is resilient to lower mortgage originations due to its portfolio nature and high persistency.

Financial highlights

• Total revenue for Q3 2024 was $317 million, with net premiums earned of $248.9 million and net investment income of $57.3 million.

• Return on average equity was 13–13.9% annualized for Q3 2024.

• Book value per share increased to $53.11 at September 30, 2024, from $44.98 a year earlier.

• Provision for losses and LAE was $30.7 million, up from $10.8 million a year ago, with loss reserves rising to $288 million.

• Default rate increased to 1.95% from 1.71% last quarter.

Outlook and guidance

• Full-year 2024 guidance for underwriting and operating expenses (excluding title) revised down to ~$180 million.

• Persistency rates expected to remain high with elevated mortgage rates, supporting premium revenue stability.

• Management remains constructive on the long-term housing outlook, citing supply-demand imbalance and demographic trends.

• Board approved a quarterly dividend of $0.28 per share, payable December 11, 2024.

• No material impact anticipated from Bermuda's new corporate income tax until at least 2030.