Slide 1: Investor Presentation 4Q23
ESSENT GROUP LTD. INVESTOR PRESENTATION 4Q23 NYSE: ESNT February 9, 2024 ESSENT GROUP LTD. | NYSE: ESNT © 2023 Essent Group Ltd. All rights reserved. | essentgroup.com | 1
Slide 2: Disclaimer
Disclaimer This presentation 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," “shou
Slide 3: Essent Is A Leading Mortgage Insurer
Essent Is A Leading Mortgage Insurer 3Q23 4Q23 Company Overview Consolidated Financial Results • Essent Group Ltd. is a Bermuda-based holding company that went Net Income ($M) $178.0 $175.4 public in 2013, and is traded on the New York Stock Exchange (NYSE: ESNT). Combined Ratio 31.7% 34.9% • Two pr
Slide 4: Delivering Shareholder Value
Delivering Shareholder Value BOOK VALUE PER SHARE GROWTH Annualized growth rate of 19.1% since December 31, 2013 $47.87 $41.44 $38.73 $34.36 $30.34 $24.11 $19.71 $14.43 $12.08 $10.33 $8.35 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Strong Cash Flows Programmatic Ste
Slide 5: Key Milestones in Essent's Evolution
Key Milestones in Essent’s Evolution Launch IPO Launch of First CRT EssentEDGE® EssentEDGE® Essent Title of Essent Essent Re Next Generation Guaranty Essent Essent initiates Essent Essent acquires Essent Re its first credit- launches A cloud-based AI title insurance completes Essent completes first
Slide 6: Industry Fundamentals
Industry Fundamentals STABLE DEMAND OF FIRST-TIME HOMEBUYER POPULATION MONTHS’ SUPPLY OF HOUSING INVENTORY Total housing inventory remains low at approximately 3 months, driven by existing Favorable demographic trends should continue to provide fundamental support to home inventory pressures from va
Slide 7: Buy, Manage & Distribute Operating Model
Buy, Manage & Distribute Operating Model EssentEDGE® Enables Rapid Execution Strong Operating Results of Targeted Pricing Strategies ➢ Last Twelve Months Operating Cash Flow of ➢ Lender utilization continues to increase $763 million ➢ The latest generation of EssentEDGE® is a ➢ Continue to focus on
Slide 8: Credit Risk Transfer
Credit Risk Transfer Since March 2018, Essent has transferred credit risk to: ▪ Capital market investors via nine(1) Radnor Re Insurance-Linked Note (ILN) issuances ▪ Reinsurers via four (1) Excess of Loss (XOL) reinsurance transactions ▪ Reinsurers via three Quota Share (QS) reinsurance programs As
Slide 9: Essent Re
Essent Re ➢ Essent Reinsurance Ltd. (“Essent Re”) is a Bermuda-based reinsurance company, rated A (Excellent) by A.M. Best and A- by S&P. At December 31, 2023, Essent Re’s GAAP equity was $1.8 billion. ➢ Essent Re primarily focuses on three business lines: ➢ Affiliate quota share (QS) to reinsure Es
Slide 10: Investment Portfolio
Investment Portfolio As Of December 31, 2023, Essent Has $5.5 Billion Of Total Investments Portfolio by Asset Class Portfolio by Rating1 Non-U.S. Below Baa3 Other Invested Assets Government 1.7% 5.0% 1.2% Money market Baa funds 12.7% 8.0% U.S. RMBS & Government CMBS and Agency 9.3% Debt A 33.0% 19.9
Slide 11: Quarterly Financial Highlights
Quarterly Financial Highlights AS OF END OF PERIOD ($ in millions, except per share amounts) 4Q22 1Q23 2Q23 3Q23 4Q23 KEY METRICS U.S. Mortgage IIF $227,062.1 $231,537.4 $235,649.9 $238,661.6 $239,078.3 Total Revenue $230.0 $256.2 $260.1 $296.1 $297.3 Net Income $147.4 $170.8 $172.2 $178.0 $175.4 To
Slide 12: Annual Financial Highlights
Annual Financial Highlights AS OF END OF PERIOD ($ in millions, except per share amounts) 2019 2020 2021 2022 2023 KEY METRICS U.S. Mortgage IIF $164,005.9 $198,882.4 $207,190.5 $227,062.1 $239,078.3 Total Revenue $867.6 $955.2 $1,028.5 $1,000.8 $1,109.8 Net Income $555.7 $413.0 $681.8 $831.4 $696.4
Slide 13: U.S. Mortgage Insurance In Force & New Insurance Written
U.S. Mortgage Insurance In Force (IIF) & New Insurance Written (NIW) IIF BY VINTAGE YEAR ($B) ($ in billions) DEC. 31, 2021 DEC. 31, 2022 DEC. 31, 2023 IIF % of Total IIF % of Total IIF % of Total WA Coupon 2023 - - - - $45.7 19.1% 6.7% 2022 - - $60.6 26.7% $56.9 23.8% 5.1% 2021 $79.8 38.5% $71.5 31
Slide 14: A High Credit Quality IIF Portfolio
A High Credit Quality IIF Portfolio IIF BY FICO SCORE ($B) ($ in billions) DEC. 31, 2021 DEC. 31, 2022 DEC. 31, 2023 IIF % of Total IIF % of Total IIF % of Total >=760 $85.5 41.3% $93.4 41.1% $97.1 40.6% 740-759 $35.1 17.0% $38.8 17.2% $41.5 17.4% 720-739 $31.2 15.0% $35.0 15.4% $37.4 15.7% 700-719
Slide 15: In Force Portfolio Premium Yield
In Force Portfolio Premium Yield U.S. Mortgage Insurance Portfolio PERIOD ENDING (in basis points) 4Q22 1Q23 2Q23 3Q23 4Q23 Base Premium Earned 40 bps 40 bps 40 bps 40 bps 40 bps Singles Cancellation Premium 0 bps 0 bps 0 bps 0 bps 0 bps Gross Premium Rate 40 bps 40 bps 40 bps 40 bps 40 bps Ceded Pr
Slide 16: Cost of Reinsurance Transactions
Cost of Reinsurance Transactions PERIOD ENDING ($ in millions) 4Q22 1Q23 2Q23 3Q23 4Q23 U.S. Mortgage Insurance Portfolio ILN/XOL Ceded Premium $23.85) $22.28) $27.71) $16.59) $16.56) QSR Ceded Premium $10.44) $11.31) $11.83) $13.70) $14.51) Total Ceded Premium $34.29) $33.59) $39.54) $30.29) $31.07
Slide 17: Default Rollforward
Default Rollforward U.S. Mortgage Insurance Portfolio PERIOD ENDING (number of loans) 4Q22 1Q23 2Q23 3Q23 4Q23 Beginning Default Inventory 12,435 13,433 12,773 12,480 13,391 Plus: New Defaults (1) 7,505 7,015 6,575 7,953 9,007 Less: Cures (6,425) (7,574) (6,761) (6,902) (7,418) Less: Claims Paid (73
Slide 18: Components Of Provision For Losses & LAE
Components Of Provision For Losses & LAE U.S. Mortgage Insurance Portfolio PERIOD ENDING ($ in millions) 4Q22 1Q23 2Q23 3Q23 4Q23 Provision for Losses & LAE occurring in: Current Period $36.14) $32.69) $31.37 $35.61 $38.92 Prior Year Development ($32.01) ($32.86) ($30.10) ($25.55) ($19.91) Provision
Slide 19: Cumulative Incurred Loss Ratio By Vintage Year
Cumulative Incurred Loss Ratio By Vintage Year U.S. Mortgage Insurance Portfolio PRE-2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 Pre-2015 2.4% 2.9% 3.1% 3.0% 2.7% 2.6% 3.3% 3.3% 2.6% 2.5% 2015 2.1% 3.3% 4.0% 3.0% 2.7% 4.6% 4.3% 2.7% 2.5% 2016 2.3% 4.6% 3.4% 2.9% 6.4% 5.3% 2.8% 2.2% 2017 7.5% 4
Slide 20: U.S. Mortgage Insurance Subsidiaries
U.S. Mortgage Insurance Subsidiaries As of: ($ in millions) 4Q22 1Q23 2Q23 3Q23 4Q23 Scheduled Contingency Statutory Financial Information Reserve Releases(3) ($ in millions) Risk-to-capital ratio 10.2:1 10.3:1 10.5:1 10.3:1 10.2:1 2024 $109 Common stock and paid-in surplus(1) $744 $744 $744 $744 $7
Slide 21: Quarterly Financial Trends
Quarterly Financial Trends U.S. MORTGAGE IIF & NIW NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $274.2 $231.5 $235.6 $238.7 $239.1 $222.5 $227.1 $215.9 $231.8 $206.8 $178.1 $170.8 $172.2 $178.0 $175.4 $147.4 $12.8 $20.1 $17.1 $13.0 $12.9 $13.5 $12.5 $8.8
Slide 22: Annual Financial Trends
Annual Financial Trends U.S. MORTGAGE IIF & NIW NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $239.1 $227.1 $831.4 $207.2 $198.9 $681.8 $696.4 $164.0 $555.7 $137.7 $467.4 $110.5 $107.9 $413.0 $379.7 $84.2 $63.6 $63.1 $43.9 $47.5 $47.7 2017 2018 2019 2020 2
Slide 23: CRT Summary: As Of 12/31/23
CRT Summary: As Of 12/31/23 1. Insurance Linked Note Transactions (ILN) are with Radnor Re 2. Excess of Loss Agreements (XOL) and Quota Share (QSR) 5. Reduction in PMIERs Minimum Required Assets estimated by (RMIR) entities transactions are with panels of U.S. & global reinsurers the Company ➢ The R
Slide 24: ESSENT GROUP LTD. | NYSE: ESNT © 2023 Essent Group Ltd. All rights reserved.
ESSENT GROUP LTD. | NYSE: ESNT © 2023 Essent Group Ltd. All rights reserved. | essentgroup.com | 24