Essent Group Ltd. · NYSE:ESNT
Essent — Q4 2024 Earnings Presentation
25 slides from Essent's earnings presentation, Feb 14, 2025
Slide 1: Investor Presentation 4Q24
ESSENT GROUP LTD. INVESTOR PRESENTATION 4Q24 NYSE: ESNT February 14, 2025 ESSENT GROUP LTD. | NYSE: ESNT © 2025 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 3Q24 4Q24 Company Overview Consolidated Financial Results • Essent Group Ltd. is a Bermuda-based holding company that went Net Income ($M) $176.2 $167.9 public in 2013 and is traded on the New York Stock Exchange (NYSE: ESNT). Combined Ratio 38.7% 45.3% • Three p
Slide 4: Delivering Shareholder Value
Delivering Shareholder Value BOOK VALUE PER SHARE GROWTH Annualized growth rate of 18.4% since December 31, 2013 $53.36 $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 Dec-24 Strong Cash Flows Pr
Slide 5: Key Milestones in Essent's Evolution
Key Milestones in Essent’s Evolution Launch IPO Launch of First CRT EssentEDGE® EssentEDGE® Essent Title Inaugural Debt of Essent Essent Re Next Generation Offering Guaranty Essent Essent initiates Essent Essent acquires Essent Re its first credit- launches A cloud-based title insurance Essent close
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 4 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 $852 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 ten(1) Radnor Re Insurance-Linked Note (ILN) issuances ▪ Reinsurers via six (1) Excess of Loss (XOL) reinsurance transactions ▪ Reinsurers via four (2) Quota Share (QS) reinsurance programs A
Slide 9: Essent Re
Essent Re ➢ Essent Reinsurance Ltd. (“Essent Re”) is a Bermuda-based reinsurance company, rated A (Excellent) by AM Best and A- by S&P. At December 31, 2024, Essent Re’s GAAP equity was $1.8 billion. ➢ Essent Re primarily focuses on three business lines: ➢ Affiliate quota share to reinsure Essent Gu
Slide 10: Investment Portfolio
Investment Portfolio As of December 31, 2024, Essent Has $6.2 Billion Of Total Investments Portfolio by Asset Class Portfolio by Rating1 Non-U.S. Below Baa3 2 Government 1.5% Other Invested Assets 4.9% 1.3% Money Baa market U.S. 10.9% funds Government 10.6% and Agency Debt RMBS & 27.1% CMBS Aaa 7.7%
Slide 11: Quarterly Financial Highlights
Quarterly Financial Highlights AS OF END OF PERIOD ($ in millions, except per share amounts) 4Q23 1Q24 2Q24 3Q24 4Q24 KEY METRICS U.S. Mortgage IIF $239,078 $238,477 $240,669 $242,976 $243,645 Total Revenue $297 $298 $313 $317 $315 Net Income $175 $182 $204 $176 $168 Total Investments $5,541 $5,649
Slide 12: Annual Financial Highlights
Annual Financial Highlights AS OF END OF PERIOD ($ in millions, except per share amounts) 2020 2021 2022 2023 2024 KEY METRICS U.S. Mortgage IIF $198,882 $207,191 $227,062 $239,078 $243,645 Total Revenue $955 $1,029 $1,001 $1,110 $1,243 Net Income $413 $682 $831 $696 $729 Total Investments $4,654 $5
Slide 13: U.S. Mortgage Insurance In Force (IIF) & New Insurance Written (NIW)
U.S. Mortgage Insurance In Force (IIF) & New Insurance Written (NIW) IIF BY VINTAGE YEAR ($B) ($ in billions) DEC. 31, 2022 DEC. 31, 2023 Dec. 31, 2024 IIF % of Total IIF % of Total IIF % of Total WA Coupon 2024 - - - - $43.4 17.8% 6.7% 2023 - - $45.7 19.1% $41.1 16.9% 6.6% 2022 $60.6 26.7% $56.9 23
Slide 14: High Credit Quality IIF Portfolio
High Credit Quality IIF Portfolio IIF BY FICO SCORE ($B) ($ in billions) DEC. 31, 2022 DEC. 31, 2023 DEC. 31, 2024 IIF % of Total IIF % of Total IIF % of Total >=760 $93.4 41.1% $97.1 40.6% $99.2 40.7% 740-759 $38.8 17.2% $41.5 17.4% $42.6 17.5% 720-739 $35.0 15.4% $37.4 15.7% $38.0 15.6% 700-719 $2
Slide 15: In Force Portfolio Premium Yield
In Force Portfolio Premium Yield U.S. Mortgage Insurance Portfolio PERIOD ENDING (in basis points) 4Q23 1Q24 2Q24 3Q24 4Q24 Base Premium Earned 40 bps 41 bps 41 bps 41 bps 41 bps Singles Cancellation Premium 0 bps 0 bps 0 bps 0 bps 0 bps Gross Premium Rate 40 bps 41 bps 41 bps 41 bps 41 bps Ceded Pr
Slide 16: Cost of Reinsurance Transactions
Cost of Reinsurance Transactions PERIOD ENDING ($ in millions) 4Q23 1Q24 2Q24 3Q24 4Q24 U.S. Mortgage Insurance Portfolio ILN/XOL Ceded Premium $16.6) $16.3) $15.8) $17.3) $20.4) QSR Ceded Premium $14.5) $14.1) $11.6) $17.5) $19.1) Total Ceded Premium $31.1) $30.4) $27.4) $34.8) $39.5) Increase (Red
Slide 17: Default Rollforward
Default Rollforward U.S. Mortgage Insurance Portfolio PERIOD ENDING (number of loans) 4Q23 1Q24 2Q24 3Q24 4Q24 Beginning Default Inventory 13,391 14,819 13,992 13,954 15,906 Plus: New Defaults (1) 9,007 8,260 8,119 9,984 11,136 Less: Cures (7,418) (8,951) (7,956) (7,819) (8,408) Less: Claims Paid (1
Slide 18: Components Of Provision For Losses & LAE
Components Of Provision For Losses & LAE U.S. Mortgage Insurance Portfolio PERIOD ENDING ($ in millions) 4Q23 1Q24 2Q24 3Q24 4Q24 Provision for Losses & LAE occurring in: Current Period $38.9 $39.4 $30.7 $51.6 $50.2 Prior Year Development ($19.9) ($30.1) ($31.9) ($21.8) ($13.0) Provision For Losses
Slide 19: Cumulative Incurred Loss Ratio By Vintage Year
Cumulative Incurred Loss Ratio By Vintage Year U.S. Mortgage Insurance Portfolio PRE-2015 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Pre-2015 2.4% 2.9% 3.1% 3.0% 2.7% 2.6% 3.3% 3.3% 2.6% 2.5% 2.4% 2015 2.1% 3.3% 4.0% 3.0% 2.7% 4.6% 4.3% 2.7% 2.5% 2.1% 2016 2.3% 4.6% 3.4% 2.9% 6.4% 5.3% 2.8% 2
Slide 20: U.S. Mortgage Insurance Subsidiaries
U.S. Mortgage Insurance Subsidiaries As of: ($ in millions) 4Q23 1Q24 2Q24 3Q24 4Q24 Scheduled Contingency Statutory Financial Information(1) Reserve Releases(3) Risk-to-capital ratio 10.2:1 10.0:1 9.9:1 9.7:1 9.8:1 ($ in millions) 2025 $147 Common stock and paid-in surplus(2) $744 $744 $744 $744 $7
Slide 21: Quarterly Financial Trends
Quarterly Financial Trends U.S. MORTGAGE IIF & NIW CONSOLIDATED NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $235.6 $238.7 $239.1 $238.5 $240.7 $243.0 $243.6 $231.5 $203.6 $178.0 $175.4 $181.7 $176.2 $170.8 $172.2 $167.9 $12.9 $13.5 $12.5 $8.8 $8.3 $12.5
Slide 22: Annual Financial Trends
Annual Financial Trends U.S. MORTGAGE IIF & NIW CONSOLIDATED NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $239.1 $243.6 $227.1 $831.4 $207.2 $198.9 $729.4 $681.8 $696.4 $164.0 $555.7 $137.7 $467.4 $107.9 $413.0 $84.2 $63.6 $63.1 $47.5 $47.7 $45.6 2018 201
Slide 23: CRT Summary: As Of 12/31/24
CRT Summary: As Of 12/31/24 1. Insurance Linked Note Transactions (ILN) are with Radnor Re 2. Excess of Loss Agreements (XOL) and Quota Share (QSR) 4. Reduction in PMIERs Minimum Required Assets estimated (RMIR) entities transactions are with panels of U.S. & global reinsurers by the Company ➢ The R
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures We believe that loss, expense and combined ratios are important measures of our financial performance. As a result of the acquisition of Essent Title operations (“Title”) in July 2023, the consolidated loss, expense and combined ratios lack comparability
Slide 25: ESSENT GROUP LTD. | NYSE: ESNT © 2025 Essent Group Ltd. All rights reserved.
ESSENT GROUP LTD. | NYSE: ESNT © 2025 Essent Group Ltd. All rights reserved. | essentgroup.com | 25