Slide 1: Investor Presentation 1Q22
ESSENT GROUP LTD. INVESTOR PRESENTATION 1Q22 NYSE: ESNT May 6, 2022 ESSENT GROUP LTD. | NYSE: ESNT © 2022 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 Company Overview 1Q22 4Q21 • Essent Group Ltd. is a Bermuda-based holding company that IIF ($B) $206.8 $207.2 went public in 2013, and is traded on the New York Stock NIW ($B) $12.8 $16.4 Exchange (NYSE: ESNT) • Two primary operating companies: Essent Guaranty, I
Slide 4: Delivering Shareholder Value
Delivering Shareholder Value BOOK VALUE PER SHARE GROWTH Annualized growth rate of 20.5% since December 31, 2013 $38.73 $38.98 $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 Mar-22 Programmatic Strong Cash Flows Steadily Increasi
Slide 5: Key Milestones in Essent's Evolution
Key Milestones in Essent’s Evolution 2010 2013 2014 2018 2019 2021 Launch IPO Launch of First CRT EssentEDGE® EssentEDGE® of Essent Essent Re Next Generation Guaranty Essent completes Essent Re Essent initiates its Essent launches A cloud-based AI Essent obtains IPO; emerges as a completes first fir
Slide 6: Buy, Manage & Distribute Operating Model
Buy, Manage & Distribute Operating Model EssentEDGE® Enables Rapid Execution Strong Operating Results of Targeted Pricing Strategies ➢ Last Twelve Months Underwriting Margin of ➢ Lender utilization continues to increase 93% with $702 million in Operating Cash Flow ➢ The next generation of EssentEDGE
Slide 7: Reducing Volatility via Credit Risk Transfer
Reducing Volatility via Credit Risk Transfer Since March 2018, Essent has transferred credit risk to: ▪ Capital market investors via seven Radnor Re Insurance-Linked Note (ILN) issuances ▪ Reinsurers via three Excess of Loss (XOL) reinsurance transactions ▪ Reinsurers via two Quota Share (QS) reinsu
Slide 8: Essent Re
Essent Re ➢ Essent Reinsurance Ltd. (“Essent Re”) is a Bermuda-based reinsurance company, rated A (Excellent) by A.M. Best and BBB+ by S&P, with $1.3 billion in GAAP equity as of March 31, 2022 ➢ Essent Re primarily focuses on three business lines: ➢ Affiliate quota share (QS) to reinsure Essent Gua
Slide 9: EssentVentures
EssentVentures ➢ Our EssentVentures unit continues to make investments to generate informational and financial returns, taking advantage of opportunities around the convergence of consumer finance, real estate and insurance ➢ Since 2018, we have invested in 10 venture capital firms providing us acce
Slide 10: Supportive Industry Fundamentals
Supportive Industry Fundamentals GROWING DOMESTIC FIRST-TIME HOMEBUYER POPULATION • Millennial generation of roughly 80M will New Entrants to Domestic First-Time Homebuyer Population (M) drive housing’s longer-term prospects 4.3 4.2 4.3 4.3 4.2 4.4 4.4 4.4 4.5 4.6 4.8 4.8 4.7 4.6 4.5 and first-time
Slide 11: A High Credit Quality Portfolio
A High Credit Quality Portfolio As Of March 31, 2022, Essent Has $206.8 Billion Of Insurance In Force IIF BY VINTAGE IIF BY FICO SCORE IIF BY LTV 2022 <=2017 <680 6.2% 8.9% 5.8% 2018 680- >=95.01% 4.1% 699 14.1% 2019 8.1% 8.7% ESSENT IIF 90.01- 2021 95.00% 37.5% 44.7% <=90.00% 41.2% 2020 700+ 34.6%
Slide 12: Insurance In Force (IIF)
Insurance In Force (IIF) IIF BY VINTAGE YEAR ($B) ($ in billions) MAR. 31, 2022 DEC. 31, 2021 DEC. 31, 2020 2022 $12.7 6.2% - - - - 2021 $77.6 37.5% $79.8 38.5% - - 2020 $71.6 34.6% $76.6 36.9% $102.1 51.3% 2019 $18.0 8.7% $20.3 9.8% $38.7 19.5% 2018 $8.4 4.1% $9.5 4.6% $18.7 9.4% 2017 $7.5 3.6% $8.
Slide 13: Financial Highlights
Financial Highlights AS OF END OF PERIOD ($ in millions, except per share amounts) 1Q22 4Q21 3Q21 2Q21 1Q21 KEY METRICS Insurance In Force $206,843.0 $207,190.5 $208,216.5 $203,559.9 $197,091.2 Total Assets $5,586.1 $5,722.2 $5,589.5 $5,521.8 $5,331.8 Total Investments $4,875.4 $5,133.4 $5,031.3 $4,
Slide 14: Total Economics of Reinsurance Transactions
Total Economics of Reinsurance Transactions PERIOD ENDING ($ in millions) 1Q22 4Q21 3Q21 2Q21 1Q21 U.S. Mortgage Insurance Portfolio ILN/XOL Ceded Premium ($19.83) ($19.09) ($18.09) ($14.88) ($14.91) QSR Ceded Premium ($0.69) ($7.39) ($8.79) ($11.78) ($15.99) Total Ceded Premium ($20.52) ($26.48) ($
Slide 15: In Force Portfolio Premium Yield
In Force Portfolio Premium Yield U.S. Mortgage Insurance Portfolio PERIOD ENDING (in basis points) 1Q22 4Q21 3Q21 2Q21 1Q21 Base Premium Earned 41 bps 42 bps 42 bps 43 bps 44 bps Singles Cancellation Premium 2 bps 3 bps 3 bps 3 bps 4 bps Gross Premium Rate 43 bps 45 bps 45 bps 46 bps 48 bps Ceded Pr
Slide 16: Default Rollforward
Default Rollforward U.S. Mortgage Insurance Portfolio PERIOD ENDING (number of loans) 1Q22 4Q21 3Q21 2Q21 1Q21 Beginning Default Inventory 16,963 19,721 23,504 29,080 31,469 Plus: New Defaults 6,188 5,809 5,132 4,934 7,422 Less: Cures (8,167) (8,514) (8,862) (10,453) (9,737) Less: Claims Paid (55) (
Slide 17: Components Of Provision For Losses & LAE
Components Of Provision For Losses & LAE U.S. Mortgage Insurance Portfolio PERIOD ENDING ($ in millions) 1Q22 4Q21 3Q21 2Q21 1Q21 Provision for Losses & LAE occurring in: Current Period $24.35) $13.23) $11.37) $24.53) $47.76) Prior Year Development ($130.11) ($16.62) ($18.85) ($14.96) ($15.68) Provi
Slide 18: Cumulative Incurred Loss Ratio By Vintage Year
Cumulative Incurred Loss Ratio By Vintage Year PRE-2015 2015 2016 2017 2018 2019 2020 2021 3/31/2022 Pre-2015 2.4% 2.9% 3.1% 3.0% 2.7% 2.6% 3.3% 3.3% 2.9% 2015 2.1% 3.3% 4.0% 3.0% 2.7% 4.6% 4.3% 3.5% 2016 2.3% 4.6% 3.4% 2.9% 6.4% 5.3% 3.9% 2017 7.5% 4.6% 4.2% 9.7% 8.3% 5.8% 2018 3.3% 6.0% 16.4% 13.7
Slide 19: U.S. Mortgage Insurance Subsidiaries
U.S. Mortgage Insurance Subsidiaries As of: ($ in millions) 1Q22 4Q21 3Q21 2Q21 1Q21 Scheduled Contingency Statutory Financial Information Reserve Releases(3) ($ in millions) Risk-to-capital ratio 9.9:1 10.4:1 10.5:1 10.6:1 10.6:1 Apr-Dec 2022 $18.1 Common stock and paid-in surplus(1) $744 $744 $744
Slide 20: Quarterly Financial Trends
Quarterly Financial Trends INSURANCE IN FORCE & NEW INSURANCE WRITTEN NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $203.6 $208.2 $207.2 $206.8 $198.9 $197.1 $274.2 $190.8 $174.6 $205.4 $181.0 $159.8 $135.6 $124.5 $123.6 $36.7 $28.2 $29.6 $25.0 $23.6 $19.3
Slide 21: Annual Financial Trends
Annual Financial Trends INSURANCE IN FORCE & NEW INSURANCE WRITTEN NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $207.2 $206.8 $198.9 $681.8 $164.0 $555.7 $137.7 $467.4 $110.5 $107.9 $413.0 $379.7 $83.3 $84.2 $274.2 $63.6 $222.6 $43.9 $47.5 $34.9 $12.8 201
Slide 22: ESSENT GROUP LTD. | NYSE: ESNT © 2022 Essent Group Ltd. All rights reserved.
ESSENT GROUP LTD. | NYSE: ESNT © 2022 Essent Group Ltd. All rights reserved. | essentgroup.com | 22