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News Details

Essent Group Ltd. Reports Second Quarter 2019 Results & Declares Inaugural Dividend

08/02/2019

HAMILTON, Bermuda--(BUSINESS WIRE)-- Essent Group Ltd. (NYSE: ESNT) today reported net income for the quarter ended June 30, 2019 of $136.4 million or $1.39 per diluted share, compared to $111.8 million or $1.14 per diluted share for the quarter ended June 30, 2018.

Essent also announced today that its Board of Directors has declared a quarterly cash dividend of $0.15 per common share. The dividend is payable on September 16, 2019, to shareholders of record on September 4, 2019.

“We are pleased with our strong financial results for the second quarter and our continued progress in transitioning our franchise to a buy, manage and distribute model through utilization of EssentEDGE and reinsurance,” said Mark Casale, Chairman and Chief Executive Officer. “Our performance, along with the use of reinsurance, continues to generate excess capital. As a result, we are pleased to announce our inaugural dividend and believe that it is a tangible demonstration of the benefits in a buy, manage and distribute operating model.”

Financial Highlights:

  • Insurance in force as of June 30, 2019 was $153.3 billion, compared to $143.2 billion as of March 31, 2019 and $122.5 billion as of June 30, 2018.
  • New insurance written for the second quarter was $18.0 billion, compared to $11.0 billion in the first quarter of 2019 and $12.9 billion in the second quarter of 2018.
  • Net premiums earned for the second quarter were $188.5 million, compared to $177.8 million in the first quarter of 2019 and $157.0 million in the second quarter of 2018.
  • The expense ratio for the second quarter was 22.0%, compared to 23.1% in the first quarter of 2019 and 23.2% in the second quarter of 2018.
  • The provision for losses and LAE for the second quarter was $5.0 million, compared to a provision of $7.1 million in the first quarter of 2019 and a provision of $1.8 million in the second quarter of 2018.
  • The percentage of loans in default as of June 30, 2019 was 0.66%, compared to 0.65% as of March 31, 2019 and 0.64% as of June 30, 2018.
  • The combined ratio for the second quarter was 24.7%, compared to 27.1% in the first quarter of 2019 and 24.4% in the second quarter of 2018.
  • The consolidated balance of cash and investments at June 30, 2019 was $3.2 billion, including cash and investment balances at Essent Group Ltd. of $72.0 million.
  • The combined risk-to-capital ratio of the U.S. mortgage insurance business, which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., was 13.6:1 as of June 30, 2019.
  • In June, Essent Guaranty, Inc. obtained $333.8 million of excess of loss reinsurance coverage on mortgage insurance policies written by Essent in 2015 and 2016. The reinsurance is fully collateralized by ten-year mortgage insurance-linked notes (“ILNs”) issued by Radnor Re 2019-2 Ltd., an unaffiliated special purpose insurer.

Conference Call

Essent management will hold a conference call at 10:00 AM Eastern time today to discuss its results. The conference call will be broadcast live over the Internet at http://ir.essentgroup.com/investors/webcasts-and-presentations/event-calendar/default.aspx. The call may also be accessed by dialing 833-287-0797 inside the U.S., or 647-689-4456 for international callers, using passcode 7877815 or by referencing Essent.

A replay of the webcast will be available on the Essent website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two hours after the call ends for a period of two weeks, using the following dial-in numbers and passcode: 800-585-8367 inside the U.S., or 416-621-4642 for international callers, passcode 7877815.

In addition to the information provided in the company's earnings news release, other statistical and financial information, which may be referred to during the conference call, will be available on Essent's website at http://ir.essentgroup.com/investors/financial-information/quarterly-financial-supplements/default.aspx.

Forward-Looking Statements

This press release may include “forward-looking statements” which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," “should,” “expect,” "plan," "anticipate," "believe," “estimate,” “predict,” or "potential" or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs, including those offered by the Federal Housing Administration; decline in new insurance written and franchise value due to loss of a significant customer; decline in the volume of low down payment mortgage originations; the definition of "Qualified Mortgage" reducing the size of the mortgage origination market or creating incentives to use government mortgage insurance programs; the definition of "Qualified Residential Mortgage" reducing the number of low down payment loans or lenders and investors seeking alternatives to private mortgage insurance; the implementation of the Basel III Capital Accord discouraging the use of private mortgage insurance; a decrease in the length of time that insurance policies are in force; uncertainty of loss reserve estimates; deteriorating economic conditions; our non-U.S. operations becoming subject to U.S. Federal income taxation; becoming considered a passive foreign investment company for U.S. Federal income tax purposes; and other risks and factors described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on February 19, 2019. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures

In presenting Essent Group Ltd.’s results, management has included financial measures, including adjusted book value per share, that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures are referred to as “non-GAAP measures.” These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more complete understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial supplement in accordance with Regulation G.

About the Company

Essent Group Ltd. (NYSE: ESNT) is a Bermuda-based holding company (collectively with its subsidiaries, “Essent”) which, through its wholly-owned subsidiary, Essent Guaranty, Inc., offers private mortgage insurance for single-family mortgage loans in the United States. Essent provides private capital to mitigate mortgage credit risk, allowing lenders to make additional mortgage financing available to prospective homeowners. Headquartered in Radnor, Pennsylvania, Essent Guaranty, Inc. is licensed to write mortgage insurance in all 50 states and the District of Columbia, and is approved by Fannie Mae and Freddie Mac. Essent also offers mortgage-related insurance, reinsurance and advisory services through its Bermuda-based subsidiary, Essent Reinsurance Ltd. Additional information regarding Essent may be found at www.essentgroup.com and www.essent.us.

Source: Essent Group Ltd.

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Financial Results and Supplemental Information (Unaudited)

Quarter Ended June 30, 2019

 

 

 

 

 

 

Exhibit A

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Exhibit B

 

Condensed Consolidated Balance Sheets (Unaudited)

Exhibit C

 

Historical Quarterly Data

Exhibit D

 

New Insurance Written

Exhibit E

 

Insurance in Force and Risk in Force

Exhibit F

 

Other Risk in Force

Exhibit G

 

Portfolio Vintage Data

Exhibit H

 

Reinsurance Vintage Data

Exhibit I

 

Portfolio Geographic Data

Exhibit J

 

Defaults, Reserve for Losses and LAE, and Claims

Exhibit K

 

Investments Available for Sale

Exhibit L

 

Insurance Company Capital

Exhibit M

 

Reconciliation of Non-GAAP Financial Measure - Adjusted Book Value per Share

 

 

 

 

 

 

 

Exhibit A

 

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(In thousands, except per share amounts)

2019

 

2018

 

2019

 

2018

Revenues:

 

 

 

 

 

 

 

Net premiums written

$

188,404

 

 

$

168,404

 

 

$

366,048

 

 

$

333,629

 

Decrease (increase) in unearned premiums

86

 

 

(11,446

)

 

233

 

 

(24,113

)

Net premiums earned

188,490

 

 

156,958

 

 

366,281

 

 

309,516

 

Net investment income

20,581

 

 

15,134

 

 

40,461

 

 

28,848

 

Realized investment gains, net

583

 

 

439

 

 

1,243

 

 

636

 

Other income

2,238

 

 

1,237

 

 

4,433

 

 

2,231

 

Total revenues

211,892

 

 

173,768

 

 

412,418

 

 

341,231

 

 

 

 

 

 

 

 

 

Losses and expenses:

 

 

 

 

 

 

 

Provision for losses and LAE

4,960

 

 

1,813

 

 

12,067

 

 

7,122

 

Other underwriting and operating expenses

41,520

 

 

36,428

 

 

82,550

 

 

74,552

 

Interest expense

2,679

 

 

2,618

 

 

5,349

 

 

5,068

 

Total losses and expenses

49,159

 

 

40,859

 

 

99,966

 

 

86,742

 

 

 

 

 

 

 

 

 

Income before income taxes

162,733

 

 

132,909

 

 

312,452

 

 

254,489

 

Income tax expense

26,328

 

 

21,154

 

 

48,327

 

 

31,665

 

Net income

$

136,405

 

 

$

111,755

 

 

$

264,125

 

 

$

222,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

1.39

 

 

$

1.15

 

 

$

2.70

 

 

$

2.29

 

Diluted

1.39

 

 

1.14

 

 

2.69

 

 

2.28

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

97,798

 

 

97,426

 

 

97,697

 

 

97,362

 

Diluted

98,170

 

 

97,866

 

 

98,137

 

 

97,908

 

 

 

 

 

 

 

 

 

Net income

$

136,405

 

 

$

111,755

 

 

$

264,125

 

 

$

222,824

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Change in unrealized appreciation (depreciation) of investments

35,987

 

 

(7,246

)

 

74,353

 

 

(35,996

)

Total other comprehensive income (loss)

35,987

 

 

(7,246

)

 

74,353

 

 

(35,996

)

Comprehensive income

$

172,392

 

 

$

104,509

 

 

$

338,478

 

 

$

186,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss ratio

2.6

%

 

1.2

%

 

3.3

%

 

2.3

%

Expense ratio

22.0

 

 

23.2

 

 

22.5

 

 

24.1

 

Combined ratio

24.7

%

 

24.4

%

 

25.8

%

 

26.4

%

 

 

 

Exhibit B

 

 

 

 

Essent Group Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

 

 

 

 

 

June 30,

 

December 31,

($ in thousands)

2019

 

2018

Assets

 

 

 

Investments

 

 

 

Fixed maturities available for sale, at fair value

$

2,848,746

 

 

$

2,605,666

 

Short-term investments available for sale, at fair value

251,468

 

 

154,400

 

Total investments available for sale

3,100,214

 

 

2,760,066

 

Other invested assets

69,853

 

 

30,952

 

Total investments

3,170,067

 

 

2,791,018

 

Cash

25,255

 

 

64,946

 

Accrued investment income

18,387

 

 

17,627

 

Accounts receivable

40,395

 

 

36,881

 

Deferred policy acquisition costs

15,830

 

 

16,049

 

Property and equipment

17,324

 

 

7,629

 

Prepaid federal income tax

230,385

 

 

202,385

 

Other assets

22,256

 

 

13,436

 

 

 

 

 

Total assets

$

3,539,899

 

 

$

3,149,971

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Liabilities

 

 

 

Reserve for losses and LAE

$

55,138

 

 

$

49,464

 

Unearned premium reserve

295,234

 

 

295,467

 

Net deferred tax liability

216,660

 

 

172,642

 

Credit facility borrowings, net of deferred costs

223,950

 

 

223,664

 

Securities purchased payable

5,041

 

 

2,041

 

Other accrued liabilities

39,584

 

 

40,976

 

Total liabilities

835,607

 

 

784,254

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

Common shares

1,476

 

 

1,472

 

Additional paid-in capital

1,110,893

 

 

1,110,800

 

Accumulated other comprehensive income (loss)

45,360

 

 

(28,993

)

Retained earnings

1,546,563

 

 

1,282,438

 

Total stockholders' equity

2,704,292

 

 

2,365,717

 

 

 

 

 

Total liabilities and stockholders' equity

$

3,539,899

 

 

$

3,149,971

 

 

 

 

 

Return on average equity (1)

20.9

%

 

21.7

%

 

 

 

 

(1) The 2019 return on average equity is calculated by dividing annualized year-to-date 2019 net income by average equity. The 2018 return on average equity is calculated by dividing full year 2018 net income by average equity.

 

 

 

 

 

 

 

 

 

Exhibit C

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Historical Quarterly Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

Selected Income Statement Data

 

June 30

 

March 31

 

December 31

 

September 30

 

June 30

 

March 31

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

 

$

188,404

 

 

$

177,644

 

 

$

176,437

 

 

$

175,221

 

 

$

168,404

 

 

$

165,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned (1)

 

188,490

 

 

177,791

 

 

173,301

 

 

166,675

 

 

156,958

 

 

152,558

 

Other revenues (2)

 

23,402

 

 

22,735

 

 

19,823

 

 

18,323

 

 

16,810

 

 

14,905

 

Total revenues

 

211,892

 

 

200,526

 

 

193,124

 

 

184,998

 

 

173,768

 

 

167,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses and LAE (3)

 

4,960

 

 

7,107

 

 

(999

)

 

5,452

 

 

1,813

 

 

5,309

 

Other underwriting and operating expenses

 

41,520

 

 

41,030

 

 

39,449

 

 

36,899

 

 

36,428

 

 

38,124

 

Interest expense

 

2,679

 

 

2,670

 

 

2,611

 

 

2,500

 

 

2,618

 

 

2,450

 

Total losses and expenses

 

49,159

 

 

50,807

 

 

41,061

 

 

44,851

 

 

40,859

 

 

45,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

162,733

 

 

149,719

 

 

152,063

 

 

140,147

 

 

132,909

 

 

121,580

 

Income tax expense (4)

 

26,328

 

 

21,999

 

 

23,535

 

 

24,136

 

 

21,154

 

 

10,511

 

Net income

 

$

136,405

 

 

$

127,720

 

 

$

128,528

 

 

$

116,011

 

 

$

111,755

 

 

$

111,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.39

 

 

$

1.31

 

 

$

1.32

 

 

$

1.19

 

 

$

1.15

 

 

$

1.14

 

Diluted

 

1.39

 

 

1.30

 

 

1.31

 

 

1.18

 

 

1.14

 

 

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

97,798

 

 

97,595

 

 

97,450

 

 

97,438

 

 

97,426

 

 

97,298

 

Diluted

 

98,170

 

 

98,104

 

 

98,066

 

 

98,013

 

 

97,866

 

 

97,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

Loss ratio (5)

 

2.6

%

 

4.0

%

 

(0.6

)%

 

3.3

%

 

1.2

%

 

3.5

%

Expense ratio (6)

 

22.0

 

 

23.1

 

 

22.8

 

 

22.1

 

 

23.2

 

 

25.0

 

Combined ratio

 

24.7

%

 

27.1

%

 

22.2

%

 

25.4

%

 

24.4

%

 

28.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (annualized)

 

20.9

%

 

20.9

%

 

22.4

%

 

21.5

%

 

21.8

%

 

22.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Net premiums earned are net of premiums ceded to third-party reinsurers. Premiums ceded totaled $8,428, $6,038, $3,731, $3,158, $3,585 and $294 in the three months ended June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively.

(2) Certain of our third-party reinsurance agreements contain an embedded derivative as the premium ceded under those agreements will vary based on changes in interest rates. Other revenues for the three months ended June 30, 2019 and March 31, 2019 include a $1,160 and $1,424 favorable increase, respectively, in the fair value of these embedded derivatives.

(3) Provision for losses and LAE for the three months ended December 31, 2018 includes a $9,941 reduction associated with previously identified hurricane-related defaults based on the performance to date and our expectations of the amount of ultimate losses on the remaining delinquencies.

(4) Income tax expense for the three months ended March 31, 2019 and 2018 was reduced by $1,956 and $9,549, respectively, of excess tax benefits associated with the vesting of common shares and common share units during each period. Income tax expense for the three months ended September 30, 2018 includes $1,450 of expense associated with accrual to return adjustments associated with the completion of the 2017 U.S. federal income tax return.

(5) Loss ratio is calculated by dividing the provision for losses and LAE by net premiums earned.

(6) Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.

 

 

 

 

 

 

 

 

 

 

Exhibit C, continued

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Historical Quarterly Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

2018

Other Data, continued:

 

June 30

 

March 31

 

December 31

 

September 30

 

June 30

 

March 31

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Mortgage Insurance Portfolio

 

 

 

 

 

 

 

 

 

 

Flow:

 

 

 

 

 

 

 

 

 

 

 

 

New insurance written

 

$

17,973,505

 

 

$

10,945,307

 

 

$

11,408,542

 

 

$

13,913,191

 

 

$

12,850,642

 

 

$

9,336,150

 

New risk written

 

4,485,217

 

 

2,713,389

 

 

2,838,530

 

 

3,430,942

 

 

3,201,610

 

 

2,295,314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bulk:

 

 

 

 

 

 

 

 

 

 

 

 

New insurance written

 

$

29,524

 

 

$

55,002

 

 

$

 

 

$

 

 

$

 

 

$

 

New risk written

 

2,129

 

 

6,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

Average gross premium rate (7)

 

0.51

%

 

0.50

%

 

0.50

%

 

0.51

%

 

0.52

%

 

0.52

%

Average net premium rate (8)

 

0.49

%

 

0.48

%

 

0.49

%

 

0.50

%

 

0.51

%

 

0.52

%

New insurance written

 

$

18,003,029

 

 

$

11,000,309

 

 

$

11,408,542

 

 

$

13,913,191

 

 

$

12,850,642

 

 

$

9,336,150

 

New risk written

 

$

4,487,346

 

 

$

2,719,931

 

 

$

2,838,530

 

 

$

3,430,942

 

 

$

3,201,610

 

 

$

2,295,314

 

Insurance in force (end of period)

 

$

153,317,157

 

 

$

143,181,641

 

 

$

137,720,786

 

 

$

131,249,957

 

 

$

122,501,246

 

 

$

115,250,949

 

Gross risk in force (end of period) (9)

 

$

38,531,090

 

 

$

35,925,830

 

 

$

34,482,448

 

 

$

32,786,194

 

 

$

30,579,106

 

 

$

28,691,561

 

Risk in force (end of period)

 

$

37,034,687

 

 

$

34,744,417

 

 

$

33,892,869

 

 

$

32,361,782

 

 

$

30,154,694

 

 

$

28,267,149

 

Policies in force

 

666,705

 

 

629,808

 

 

608,135

 

 

581,570

 

 

546,576

 

 

517,215

 

Weighted average coverage (10)

 

25.1

%

 

25.1

%

 

25.0

%

 

25.0

%

 

25.0

%

 

24.9

%

Annual persistency

 

84.8

%

 

85.1

%

 

84.9

%

 

84.0

%

 

83.0

%

 

83.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans in default (count)

 

4,405

 

 

4,096

 

 

4,024

 

 

3,538

 

 

3,519

 

 

4,442

 

Percentage of loans in default

 

0.66

%

 

0.65

%

 

0.66

%

 

0.61

%

 

0.64

%

 

0.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Risk in Force

 

 

 

 

 

 

 

 

 

 

GSE and other risk share (11)

 

$

802,530

 

 

$

771,175

 

 

$

655,384

 

 

$

612,750

 

 

$

592,493

 

 

$

557,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Facility

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings outstanding

 

$

225,000

 

 

$

225,000

 

 

$

225,000

 

 

$

225,000

 

 

$

225,000

 

 

$

265,000

 

Undrawn committed capacity

 

$

275,000

 

 

$

275,000

 

 

$

275,000

 

 

$

275,000

 

 

$

275,000

 

 

$

110,000

 

Weighted average interest rate

 

4.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7) Average gross premium rate is calculated by dividing annualized premiums earned for the U.S. mortgage insurance portfolio, before reductions for premiums ceded under third-party reinsurance, by average insurance in force for the period.

(8) Average net premium rate is calculated by dividing annualized net premiums earned for the U.S. mortgage insurance portfolio by average insurance in force for the period.

(9) Gross risk in force includes risk ceded under third-party reinsurance.

(10) Weighted average coverage is calculated by dividing end of period gross risk in force by end of period insurance in force.

(11) GSE and other risk share includes GSE risk share and other reinsurance transactions. Essent Re provides insurance or reinsurance relating to the risk in force on loans in reference pools acquired by Freddie Mac and Fannie Mae.

 

 

 

 

 

 

 

 

 

Exhibit D

 

 

 

 

 

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

New Insurance Written: Flow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW by Credit Score

 

Three Months Ended

 

Six Months Ended

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

>=760

$

7,313,814

 

40.7

%

 

$

5,460,040

 

42.5

%

 

$

11,784,317

 

40.8

%

 

$

9,292,258

 

41.9

%

740-759

3,073,807

 

17.1

 

 

2,217,294

 

17.3

 

 

4,985,948

 

17.2

 

 

3,767,432

 

17.0

 

720-739

2,572,580

 

14.3

 

 

1,881,334

 

14.6

 

 

4,138,193

 

14.3

 

 

3,220,479

 

14.5

 

700-719

2,140,363

 

11.9

 

 

1,544,303

 

12.0

 

 

3,492,908

 

12.1

 

 

2,689,203

 

12.1

 

680-699

1,534,959

 

8.5

 

 

940,587

 

7.3

 

 

2,442,928

 

8.4

 

 

1,750,205

 

7.9

 

<=679

1,337,982

 

7.5

 

 

807,084

 

6.3

 

 

2,074,518

 

7.2

 

 

1,467,215

 

6.6

 

Total

$

17,973,505

 

100.0

%

 

$

12,850,642

 

100.0

%

 

$

28,918,812

 

100.0

%

 

$

22,186,792

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average credit score

744

 

 

 

746

 

 

 

744

 

 

 

745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW by LTV

 

Three Months Ended

 

Six Months Ended

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

85.00% and below

$

2,220,430

 

12.3

%

 

$

1,491,036

 

11.6

%

 

$

3,663,263

 

12.7

%

 

$

2,703,372

 

12.2

%

85.01% to 90.00%

4,851,313

 

27.0

 

 

3,589,257

 

27.9

 

 

7,801,661

 

27.0

 

 

6,297,769

 

28.4

 

90.01% to 95.00%

7,525,709

 

41.9

 

 

5,584,368

 

43.5

 

 

12,185,046

 

42.1

 

 

9,662,576

 

43.5

 

95.01% and above

3,376,053

 

18.8

 

 

2,185,981

 

17.0

 

 

5,268,842

 

18.2

 

 

3,523,075

 

15.9

 

Total

$

17,973,505

 

100.0

%

 

$

12,850,642

 

100.0

%

 

$

28,918,812

 

100.0

%

 

$

22,186,792

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average LTV

92

%

 

 

92

%

 

 

92

%

 

 

92

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW by Product

 

Three Months Ended

 

Six Months Ended

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

Single Premium policies

 

11.1

%

 

 

14.5

%

 

 

11.6

%

 

 

17.0

%

Monthly Premium policies

 

88.9

 

 

 

85.5

 

 

 

88.4

 

 

 

83.0

 

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW by Purchase vs. Refinance

 

Three Months Ended

 

Six Months Ended

 

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

Purchase

 

84.5

%

 

 

93.1

%

 

 

85.7

%

 

 

89.8

%

Refinance

 

15.5

 

 

 

6.9

 

 

 

14.3

 

 

 

10.2

 

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

 

Exhibit E

 

 

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Insurance in Force and Risk in Force

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio by Credit Score

IIF by FICO score

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

>=760

$

64,977,185

 

42.4

%

 

$

61,191,185

 

42.7

%

 

$

53,145,884

 

43.4

%

740-759

25,747,495

 

16.8

 

 

23,919,745

 

16.7

 

 

20,127,254

 

16.4

 

720-739

22,203,764

 

14.5

 

 

20,728,151

 

14.5

 

 

17,605,819

 

14.4

 

700-719

17,723,067

 

11.5

 

 

16,454,730

 

11.5

 

 

13,836,837

 

11.3

 

680-699

12,697,092

 

8.3

 

 

11,774,884

 

8.2

 

 

10,145,188

 

8.3

 

<=679

9,968,554

 

6.5

 

 

9,112,946

 

6.4

 

 

7,640,264

 

6.2

 

Total

$

153,317,157

 

100.0

%

 

$

143,181,641

 

100.0

%

 

$

122,501,246

 

100.0

%

 

 

 

 

 

 

 

 

 

Weighted average credit score

746

 

 

 

746

 

 

 

746

 

 

 

 

 

 

 

 

 

 

 

Gross RIF by FICO score

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

>=760

$

16,258,608

 

42.2

%

 

$

15,303,364

 

42.6

%

 

$

13,245,851

 

43.3

%

740-759

6,478,145

 

16.8

 

 

6,012,004

 

16.7

 

 

5,052,409

 

16.5

 

720-739

5,643,012

 

14.6

 

 

5,257,051

 

14.6

 

 

4,438,671

 

14.5

 

700-719

4,473,871

 

11.6

 

 

4,144,221

 

11.6

 

 

3,450,490

 

11.3

 

680-699

3,217,062

 

8.4

 

 

2,974,758

 

8.3

 

 

2,540,531

 

8.3

 

<=679

2,460,392

 

6.4

 

 

2,234,432

 

6.2

 

 

1,851,154

 

6.1

 

Total

$

38,531,090

 

100.0

%

 

$

35,925,830

 

100.0

%

 

$

30,579,106

 

100.0

%

 

 

 

 

 

 

 

 

 

Portfolio by LTV

IIF by LTV

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

85.00% and below

$

16,525,093

 

10.8

%

 

$

15,581,861

 

10.9

%

 

$

13,868,422

 

11.3

%

85.01% to 90.00%

44,234,770

 

28.9

 

 

42,045,657

 

29.3

 

 

37,558,668

 

30.6

 

90.01% to 95.00%

72,549,888

 

47.3

 

 

68,414,122

 

47.8

 

 

59,491,807

 

48.6

 

95.01% and above

20,007,406

 

13.0

 

 

17,140,001

 

12.0

 

 

11,582,349

 

9.5

 

Total

$

153,317,157

 

100.0

%

 

$

143,181,641

 

100.0

%

 

$

122,501,246

 

100.0

%

 

 

 

 

 

 

 

 

 

Weighted average LTV

92

%

 

 

92

%

 

 

92

%

 

 

 

 

 

 

 

Gross RIF by LTV

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

85.00% and below

$

1,907,272

 

5.0

%

 

$

1,797,794

 

5.0

%

 

$

1,584,294

 

5.2

%

85.01% to 90.00%

10,625,848

 

27.6

 

 

10,083,981

 

28.1

 

 

8,950,145

 

29.3

 

90.01% to 95.00%

20,784,261

 

53.9

 

 

19,605,747

 

54.6

 

 

17,068,140

 

55.8

 

95.01% and above

5,213,709

 

13.5

 

 

4,438,308

 

12.3

 

 

2,976,527

 

9.7

 

Total

$

38,531,090

 

100.0

%

 

$

35,925,830

 

100.0

%

 

$

30,579,106

 

100.0

%

 

 

 

 

 

 

 

 

 

Portfolio by Loan Amortization Period

IIF by Loan Amortization Period

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in thousands)

 

 

 

 

 

 

 

 

FRM 30 years and higher

$

143,827,908

 

93.8

%

 

$

133,725,528

 

93.4

%

 

$

112,753,292

 

92.0

%

FRM 20-25 years

2,901,947

 

1.9

 

 

2,912,323

 

2.1

 

 

3,040,764

 

2.5

 

FRM 15 years

3,391,072

 

2.2

 

 

3,335,714

 

2.3

 

 

3,638,461

 

3.0

 

ARM 5 years and higher

3,196,230

 

2.1

 

 

3,208,076

 

2.2

 

 

3,068,729

 

2.5

 

Total

$

153,317,157

 

100.0

%

 

$

143,181,641

 

100.0

%

 

$

122,501,246

 

100.0

%

 

 

 

 

 

 

Exhibit F

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Other Risk in Force

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

 

 

 

 

 

 

 

GSE and other risk share (1)

 

$

802,530

 

 

$

771,175

 

 

$

592,493

 

 

 

 

 

 

 

 

Weighted average credit score

 

748

 

 

747

 

 

748

 

Weighted average LTV

 

85

%

 

85

%

 

85

%

 

 

 

 

 

 

 

(1) GSE and other risk share includes GSE risk share and other reinsurance transactions. Essent Reinsurance Ltd. ("Essent Re") provides insurance or reinsurance relating to the risk in force on loans in reference pools acquired by Freddie Mac and Fannie Mae.

 

 

 

 

 

 

 

 

 

 

 

Exhibit G

 

 

 

 

 

 

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Portfolio Vintage Data

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance in Force

 

 

Year

Original
Insurance
Written
($ in thousands)

Remaining
Insurance
in Force
($ in thousands)

% Remaining of
Original
Insurance

Number of
Policies in
Force

% Purchase

>90% LTV

>95% LTV

FICO < 700

FICO >= 760

% FRM

Incurred
Loss Ratio
(Inception
to Date) (1)

Number of
Loans in
Default

 

 

 

 

 

 

 

 

 

 

 

 

 

2010

$

245,898

 

$

6,255

 

2.5

%

46

 

71.1

%

60.6

%

0.0

%

1.5

%

63.4

%

100.0

%

2.6

%

 

2011

3,229,720

 

186,982

 

5.8

 

1,091

 

70.5

 

61.5

 

0.3

 

6.2

 

52.7

 

97.8

 

3.8

 

24

 

2012

11,241,161

 

1,405,500

 

12.5

 

7,534

 

73.1

 

70.9

 

0.7

 

5.4

 

56.9

 

99.0

 

2.3

 

92

 

2013

21,152,638

 

4,237,378

 

20.0

 

22,517

 

79.7

 

64.3

 

2.2

 

7.8

 

51.4

 

98.8

 

2.3

 

246

 

2014

24,799,434

 

7,141,438

 

28.8

 

38,770

 

89.2

 

66.4

 

4.7

 

15.7

 

41.1

 

96.9

 

3.1

 

508

 

2015

26,193,656

 

11,777,504

 

45.0

 

56,811

 

84.7

 

58.9

 

2.7

 

14.7

 

43.8

 

98.0

 

2.8

 

632

 

2016

34,949,319

 

22,423,350

 

64.2

 

100,102

 

83.0

 

57.9

 

6.9

 

13.6

 

45.5

 

98.5

 

3.1

 

860

 

2017

43,858,322

 

34,821,992

 

79.4

 

154,934

 

86.9

 

59.4

 

14.1

 

15.8

 

41.7

 

97.1

 

4.2

 

1,250

 

2018

47,508,525

 

42,790,095

 

90.1

 

177,166

 

92.0

 

61.0

 

17.6

 

14.9

 

41.0

 

97.9

 

4.8

 

751

 

2019 (through June 30)

29,003,338

 

28,526,663

 

98.4

 

107,734

 

85.6

 

60.5

 

18.4

 

15.7

 

40.5

 

98.5

 

1.6

 

42

 

Total

$

242,182,011

 

$

153,317,157

 

63.3

 

666,705

 

87.1

 

60.4

 

13.0

 

14.8

 

42.4

 

97.9

 

3.1

 

4,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Incurred loss ratio is calculated by dividing the sum of case reserves and cumulative amount paid for claims by cumulative net premiums earned.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit H

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Reinsurance Vintage Data

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

 

Original
Reinsurance in Force

 

Remaining
Reinsurance in Force

 

 

 

 

 

 

 

 

Year

Remaining
Insurance
in Force

Remaining
Risk
in Force

 

ILN

 

Other
Reinsurance

 

Total

 

ILN

Other
Reinsurance

Total

 

Losses
Ceded
to Date

 

Original
First Layer
Retention

Remaining
First Layer
Retention

 

Quarter-to-Date
Premiums
Ceded

Year-to-Date
Premiums
Ceded

2015 & 2016

$

30,826,843

 

$

8,331,331

 

 

$

333,844

 

(1)

$

 

 

$

333,844

 

 

$

333,844

 

$

 

$

333,844

 

 

$

 

 

$

208,111

 

$

208,111

 

 

$

340

 

$

340

 

2017

33,789,568

 

8,468,723

 

 

424,412

 

(2)

165,167

 

(3)

589,579

 

 

405,558

 

165,167

 

570,725

 

 

 

 

224,689

 

224,017

 

 

3,692

 

7,423

 

2018

41,985,709

 

10,531,739

 

 

473,184

 

(4)

118,650

 

(5)

591,834

 

 

473,184

 

118,650

 

591,834

 

 

 

 

253,643

 

253,643

 

 

4,396

 

6,703

 

Total

$

106,602,120

 

$

27,331,793

 

 

$

1,231,440

 

 

$

283,817

 

 

$

1,515,257

 

 

$

1,212,586

 

$

283,817

 

$

1,496,403

 

 

$

 

 

$

686,443

 

$

685,771

 

 

$

8,428

 

$

14,466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Reinsurance provided by Radnor Re 2019-2 Ltd., through its issuance of mortgage insurance-linked notes ("ILNs"), effective June 2019.

(2) Reinsurance provided by Radnor Re 2018-1 Ltd., through its issuance of ILNs, effective March 2018.

(3) Reinsurance provided by a panel of reinsurers effective November 2018. Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd.

(4) Reinsurance provided by Radnor Re 2019-1 Ltd., through its issuance of ILNs, effective February 2019.

(5) Reinsurance provided by a panel of reinsurers effective February 2019. Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd.

 

 

 

 

 

Exhibit I

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Portfolio Geographic Data

 

 

 

 

 

 

 

 

 

 

 

 

IIF by State

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

CA

9.6

%

 

9.3

%

 

9.2

%

TX

8.0

 

 

7.9

 

 

8.0

 

FL

7.5

 

 

7.4

 

 

7.2

 

WA

4.6

 

 

4.7

 

 

4.8

 

IL

3.8

 

 

3.8

 

 

3.9

 

NJ

3.7

 

 

3.7

 

 

3.7

 

CO

3.6

 

 

3.4

 

 

3.3

 

NC

3.4

 

 

3.5

 

 

3.5

 

OH

3.4

 

 

3.3

 

 

3.2

 

GA

3.4

 

 

3.4

 

 

3.4

 

All Others

49.0

 

 

49.6

 

 

49.8

 

Total

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross RIF by State

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

CA

9.4

%

 

9.0

%

 

8.9

%

TX

8.3

 

 

8.1

 

 

8.2

 

FL

7.6

 

 

7.6

 

 

7.3

 

WA

4.6

 

 

4.7

 

 

4.9

 

IL

3.7

 

 

3.7

 

 

3.8

 

NJ

3.6

 

 

3.7

 

 

3.6

 

CO

3.5

 

 

3.3

 

 

3.2

 

GA

3.4

 

 

3.5

 

 

3.5

 

NC

3.4

 

 

3.5

 

 

3.5

 

OH

3.4

 

 

3.4

 

 

3.3

 

All Others

49.1

 

 

49.5

 

 

49.8

 

Total

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

Exhibit J

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Defaults, Reserve for Losses and LAE, and Claims

 

 

 

 

 

 

 

 

 

 

Rollforward of Insured Loans in Default

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

2019

 

2018

 

2019

 

2018

Beginning default inventory

 

4,096

 

 

4,442

 

 

4,024

 

 

4,783

 

Plus: new defaults

 

2,849

 

 

1,701

 

 

5,767

 

 

3,695

 

Less: cures

 

(2,433

)

 

(2,572

)

 

(5,182

)

 

(4,842

)

Less: claims paid

 

(106

)

 

(52

)

 

(194

)

 

(115

)

Less: rescissions and denials, net

 

(1

)

 

(10

)

 

(2

)

Ending default inventory

 

4,405

 

 

3,519

 

 

4,405

 

 

3,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rollforward of Reserve for Losses and LAE

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

($ in thousands)

2019

 

2018

 

2019

 

2018

Reserve for losses and LAE at beginning of period

$

53,484

 

$

49,966

 

$

49,464

 

$

46,850

 

Add provision for losses and LAE occurring in:

 

 

 

 

Current year

 

11,354

 

 

6,576

 

 

23,182

 

 

16,528

 

Prior years

 

(6,394

)

 

(4,763

)

 

(11,115

)

 

(9,406

)

Incurred losses and LAE during the period

 

4,960

 

 

1,813

 

 

12,067

 

 

7,122

 

Deduct payments for losses and LAE occurring in:

 

 

 

 

Current year

 

230

 

 

211

 

 

245

 

 

211

 

Prior years

 

3,076

 

 

1,552

 

 

6,148

 

 

3,745

 

Loss and LAE payments during the period

 

3,306

 

 

1,763

 

 

6,393

 

 

3,956

 

Reserve for losses and LAE at end of period

$

55,138

 

$

50,016

 

$

55,138

 

$

50,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Claims

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

2019

 

2018

 

2019

 

2018

Number of claims paid

 

106

 

 

52

 

 

194

 

 

115

 

Total amount paid for claims (in thousands)

$

3,208

 

$

1,676

 

$

6,107

 

$

3,819

 

Average amount paid per claim (in thousands)

$

30

 

$

32

 

$

31

 

$

33

 

Severity

 

69

%

 

64

%

 

74

%

 

70

%

 

Exhibit J, continued

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Defaults, Reserve for Losses and LAE, and Claims

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

Number of

Policies in

Default

Percentage of

Policies in

Default

Amount of

Reserves

Percentage of

Reserves

Defaulted RIF

Reserves as a

Percentage of

Defaulted RIF

($ in thousands)

 

 

 

 

 

 

Missed Payments:

 

 

 

 

 

 

Three payments or less

2,511

 

57

%

$

12,646

25

%

$

133,536

9

%

Four to eleven payments

1,443

 

33

 

 

22,292

44

 

 

78,047

29

 

Twelve or more payments

369

 

8

 

 

11,583

23

 

 

22,093

52

 

Pending claims

82

 

2

 

 

4,055

8

 

 

4,657

87

 

Total case reserves

4,405

 

100

%

 

50,576

100

%

$

238,333

21

 

IBNR

 

 

 

3,792

 

 

 

LAE

 

 

 

770

 

 

 

Total reserves for losses and LAE

 

 

$

55,138

 

 

 

 

 

 

 

 

 

 

Average reserve per default:

 

 

 

 

 

 

Case

 

 

$

11.5

 

 

 

Total

 

 

$

12.5

 

 

 

 

 

 

 

 

 

 

Default Rate

0.66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

Number of

Policies in

Default

Percentage of

Policies in

Default

Amount of

Reserves

Percentage of

Reserves

Defaulted RIF

Reserves as a

Percentage of

Defaulted RIF

($ in thousands)

 

 

 

 

 

 

Missed Payments:

 

 

 

 

 

 

Three payments or less

2,254

 

56

%

$

12,005

27

%

$

119,666

10

%

Four to eleven payments

1,350

 

33

 

 

20,031

44

 

 

72,222

28

 

Twelve or more payments

357

 

9

 

 

10,523

23

 

 

20,419

52

 

Pending claims

63

 

2

 

 

2,749

6

 

 

3,182

86

 

Total case reserves

4,024

 

100

%

 

45,308

100

%

$

215,489

21

 

IBNR

 

 

 

3,398

 

 

 

LAE

 

 

 

758

 

 

 

Total reserves for losses and LAE

 

 

$

49,464

 

 

 

 

 

 

 

 

 

 

Average reserve per default:

 

 

 

 

 

 

Case

 

 

$

11.3

 

 

 

Total

 

 

$

12.3

 

 

 

 

 

 

 

 

 

 

Default Rate

0.66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2018

 

Number of

Policies in

Default

Percentage of

Policies in

Default

Amount of

Reserves

Percentage of

Reserves

Defaulted RIF

Reserves as a

Percentage of

Defaulted RIF

($ in thousands)

 

 

 

 

 

 

Missed Payments:

 

 

 

 

 

 

Three payments or less

1,543

 

44

%

$

9,077

20

%

$

84,685

11

%

Four to eleven payments

1,675

 

47

 

 

26,688

58

 

 

96,627

28

 

Twelve or more payments

268

 

8

 

 

8,368

18

 

 

14,476

58

 

Pending claims

33

 

1

 

 

1,640

4

 

 

1,946

84

 

Total case reserves

3,519

 

100

%

 

45,773

100

%

$

197,734

23

 

IBNR

 

 

 

3,433

 

 

 

LAE

 

 

 

810

 

 

 

Total reserves for losses and LAE

 

 

$

50,016

 

 

 

 

 

 

 

 

 

 

Average reserve per default:

 

 

 

 

 

 

Case

 

 

$

13.0

 

 

 

Total

 

 

$

14.2

 

 

 

 

 

 

 

 

 

 

Default Rate

0.64

%

 

 

 

 

 

 
 

Exhibit K

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Investments Available for Sale

 

 

 

 

 

 

 

 

 

 

Investments Available for Sale by Asset Class

Asset Class

June 30, 2019

 

December 31, 2018

($ in thousands)

Fair Value

 

Percent

 

Fair Value

 

Percent

U.S. Treasury securities

$

305,152

 

9.8

%

$

289,892

10.5

%

U.S. agency securities

 

33,473

 

1.1

 

 

32,997

1.2

 

U.S. agency mortgage-backed securities

 

724,382

 

23.4

 

 

637,178

23.1

 

Municipal debt securities

 

402,715

 

13.0

 

 

483,879

17.5

 

Non-U.S. government securities

 

47,670

 

1.5

 

 

45,001

1.6

 

Corporate debt securities

 

774,506

 

25.0

 

 

725,201

26.3

 

Residential and commercial mortgage securities

 

250,793

 

8.1

 

 

121,838

4.4

 

Asset-backed securities

 

352,053

 

11.3

 

 

284,997

10.3

 

Money market funds

 

209,470

 

6.8

 

 

139,083

5.1

 

Total investments available for sale

$

3,100,214

 

100.0

%

$

2,760,066

100.0

%

 

 

 

 

 

Investments Available for Sale by Credit Rating

Rating (1)

June 30, 2019

December 31, 2018

($ in thousands)

Fair Value

Percent

Fair Value

Percent

Aaa

$

1,638,005

 

52.8

%

$

1,362,781

49.4

%

Aa1

 

127,936

 

4.1

 

 

124,435

4.5

 

Aa2

 

159,631

 

5.2

 

 

196,218

7.1

 

Aa3

 

164,922

 

5.3

 

 

143,315

5.2

 

A1

 

216,738

 

7.0

 

 

222,073

8.0

 

A2

 

174,426

 

5.6

 

 

199,238

7.2

 

A3

 

174,948

 

5.7

 

 

146,300

5.3

 

Baa1

 

170,537

 

5.5

 

 

162,695

5.9

 

Baa2

 

161,799

 

5.2

 

 

140,168

5.1

 

Baa3

 

44,854

 

1.5

 

 

26,805

1.0

 

Below Baa3

 

66,418

 

2.1

 

 

36,038

1.3

 

Total investments available for sale

$

3,100,214

 

100.0

%

$

2,760,066

100.0

%

 

 

 

 

 

(1) Based on ratings issued by Moody's, if available. S&P or Fitch rating utilized if Moody's not available.

 

 

 

 

 

Investments Available for Sale by Duration and Book Yield

Effective Duration

 

June 30, 2019

 

December 31, 2018

($ in thousands)

 

Fair Value

 

Percent

 

Fair Value

 

Percent

< 1 Year

$

812,953

 

26.2

%

$

529,545

19.2

%

1 to < 2 Years

 

401,313

 

12.9

 

 

285,060

10.3

 

2 to < 3 Years

 

277,580

 

9.0

 

 

251,763

9.1

 

3 to < 4 Years

 

395,083

 

12.7

 

 

278,804

10.1

 

4 to < 5 Years

 

303,485

 

9.8

 

 

429,005

15.6

 

5 or more Years

 

909,800

 

29.4

 

 

985,889

35.7

 

Total investments available for sale

$

3,100,214

 

100.0

%

$

2,760,066

100.0

%

 

 

 

 

 

Pre-tax investment income yield:

 

 

 

 

Three months ended June 30, 2019

 

2.84

%

 

 

 

Six months ended June 30, 2019

 

2.85

%

 

 

 

 

 

 

 

 

Net cash and investments at holding company, Essent Group Ltd.:

 

 

 

($ in thousands)

 

 

 

 

As of June 30, 2019

$

71,972

 

 

 

 

As of December 31, 2018

$

78,405

 

 

 

 

 
 

Exhibit L

 

 

 

Essent Group Ltd. and Subsidiaries

Supplemental Information

Insurance Company Capital

 

 

 

 

 

 

June 30, 2019

December 31, 2018

($ in thousands)

 

 

U.S. Mortgage Insurance Subsidiaries:

 

 

Combined statutory capital (1)

$

2,091,907

$

1,886,929

 

 

 

Combined net risk in force (2)

$

28,459,376

$

26,233,783

 

 

 

Risk-to-capital ratios: (3)

 

 

Essent Guaranty, Inc.

 

14.1:1

 

14.4:1

Essent Guaranty of PA, Inc.

 

3.8:1

 

4.2:1

Combined (4)

 

13.6:1

 

13.9:1

 

 

 

Essent Reinsurance Ltd.:

 

Stockholder's equity (GAAP basis)

$

899,117

$

798,612

 

 

 

Net risk in force (2)

$

9,323,473

$

8,265,763

 

 

 

 

 

 

(1) Combined statutory capital equals the sum of statutory capital of Essent Guaranty, Inc. plus Essent Guaranty of PA, Inc., after eliminating the impact of intercompany transactions. Statutory capital is computed based on accounting practices prescribed or permitted by the Pennsylvania Insurance Department and the National Association of Insurance Commissioners Accounting Practices and Procedures Manual.

(2) Net risk in force represents total risk in force, net of reinsurance ceded and net of exposures on policies for which loss reserves have been established.

(3) The risk-to-capital ratio is calculated as the ratio of net risk in force to statutory capital.

(4) The combined risk-to-capital ratio equals the sum of the net risk in force of Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. divided by the combined statutory capital.

Exhibit M

Essent Group Ltd. and Subsidiaries
Supplemental Information
Reconciliation of Non-GAAP Financial Measure - Adjusted Book Value per Share

We believe that long-term growth in Adjusted Book Value per Share is an important measure of our financial performance and is a measure used to determine vesting on certain restricted stock granted to senior management under the Company’s long-term incentive plan. Adjusted Book Value per Share is a financial measure that is not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP) and is referred to as a non-GAAP measure. Adjusted Book Value per Share may be defined or calculated differently by other companies. Adjusted Book Value per Share is one measure used to monitor our results and should not be viewed as a substitute for those measures determined in accordance with GAAP.

Adjusted Book Value per Share is calculated by dividing Adjusted Book Value by Common Shares and Share Units Outstanding. Adjusted Book Value is defined as consolidated stockholders’ equity of the Company, excluding accumulated other comprehensive income (loss) plus the proceeds, if any, from the assumed exercise of all "in-the-money" options, warrants and similar instruments. Common Shares and Share Units Outstanding is defined as total common shares outstanding plus all equity instruments (including restricted share units) issued to management and the Board of Directors and any "in-the-money" options, warrants and similar instruments. Accumulated other comprehensive income (loss) includes unrealized gains and losses that arise from changes in the market value of the Company’s investments. The Company does not view these unrealized gains and losses to be indicative of our fundamental operating performance. As of June 30, 2019, December 31, 2018 and June 30, 2018, the Company does not have any options, warrants and similar instruments outstanding.

The following table sets forth the reconciliation of Adjusted Book Value to the most comparable GAAP amount as of June 30, 2019, December 31, 2018 and June 30, 2018 in accordance with Regulation G:

 

 

 

 

(In thousands, except per share amounts)

June 30, 2019

December 31, 2018

June 30, 2018

 

 

 

 

Numerator:

 

 

 

Total Stockholders' Equity (Book Value)

$

2,704,292

$

2,365,717

 

$

2,103,571

 

 

 

 

 

Subtract: Accumulated Other Comprehensive Income (Loss)

 

45,360

 

(28,993

)

 

(39,248

)

 

 

 

 

Adjusted Book Value

$

2,658,932

$

2,394,710

 

$

2,142,819

 

 

 

 

 

Denominator:

 

 

 

Total Common Shares Outstanding

 

98,396

 

98,139

 

 

98,128

 

 

 

 

 

Add: Restricted Share Units Outstanding

 

365

 

449

 

 

452

 

 

 

 

 

Total Common Shares and Share Units Outstanding

 

98,761

 

98,588

 

 

98,580

 

 

 

 

 

Adjusted Book Value per Share

$

26.92

$

24.29

 

$

21.74

 

 

 

Media Contact
610.230.0556
media@essentgroup.com

Investor Relations Contact
Christopher G. Curran
Senior Vice President – Investor Relations
855-809-ESNT
ir@essentgroup.com

Source: Essent Group Ltd.