Slide 1: Investor Presentation 3Q21
ESSENT GROUP LTD. INVESTOR PRESENTATION 3Q21 NYSE: ESNT November 5, 2021 ESSENT GROUP LTD. | NYSE: ESNT © 2021 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 Specialty Insurer
Essent Is A Leading Specialty Insurer Company Highlights 3Q21 2Q21 • Essent Group Ltd. is a Bermuda-based holding company that went IIF ($B) $208.2 $203.6 public in 2013, and is traded on the New York Stock Exchange (NYSE: ESNT) • Serves the U.S. housing finance industry by offering mortgage NIW ($B
Slide 4: Delivering Shareholder Value
Delivering Shareholder Value BOOK VALUE PER SHARE GROWTH Annualized growth rate of 21.4% from December 31, 2013 $37.58 $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 Sep-21 Programmatic Strong Cash Flows Steadily Increasing Initiated Sh
Slide 5: Industry Fundamentals Are Supportive Of Growth
Industry Fundamentals Are Supportive Of Growth 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 4.4 4.4 4.4 4.5 4.6 4.8 4.8 4.7 4.6 4.5 and first-time buyer
Slide 6: Market Remains An Attractive Opportunity
Market Remains An Attractive Opportunity KEY HIGHLIGHTS ANNUAL NIW MARKET SHARE ▪ Essent maintains a strong market position while 13.0 16.3 16.3 16.6 18.0 ~15 continuing to grow its share of industry insurance in force 7.9 Essent 8.0 9.4 11.8 10.0 ~15 NMI ▪ Essent has averaged an annual NIW market s
Slide 7: Buy, Manage & Distribute Operating Model
Buy, Manage & Distribute Operating Model Next Generation Of ESSENTEDGE® • Sophisticated risk-based pricing engine • Increased lender adoption and integration with third party loan origination and pricing systems • The next generation of EssentEDGE® is powered by machine learning. It evaluates borrow
Slide 8: Focus On Profitability, Capital & Liquidity…
Focus On Profitability, Capital & Liquidity… EssentEDGE® Enables Rapid Execution of Targeted Pricing Strategies • Lender utilization continues to increase in 2021 • The next generation of EssentEDGE® is a cloud-based AI platform with machine 1 learning techniques that utilizes 400+ attributes to gen
Slide 9: …While Building A High Credit Quality Portfolio
…While Building A High Credit Quality Portfolio As Of September 30, 2021, Essent Has $208.2 Billion Of Insurance In Force IIF BY VINTAGE IIF BY FICO SCORE IIF BY LTV <=2016 <680 7.0% 2017 6.2% 680- >=95.01% 4.8% 13.7% 2018 699 2021 5.3% 8.0% ESSENT Q3 IIF 31.5% 90.01- 2019 95.00% 11.3% 43.7% <=90.00
Slide 10: Key Milestones in Essent's Evolution
Key Milestones in Essent’s Evolution Essent is primed for future growth with the convergence of housing finance, real estate, insurance and technology sectors 2010 2013 2014 2018 2019 2021 VERTICAL INTEGRATION Launch IPO Launch of First CRT EssentEDGE® EssentEDGE® of Essent Essent Re Next Scaled pla
Slide 11: Financial Highlights
Financial Highlights AS OF END OF PERIOD ($ in millions, except per share amounts) 3Q21 2Q21 1Q21 4Q20 3Q20 KEY METRICS Insurance In Force $208,216.5 $203,559.9 $197,091.2 $198,882.4 $190,811.3 Total Assets $5,589.5 $5,521.8 $5,331.8 $5,202.7 $5,107.1 Total Investments $5,031.3 $4,891.6 $4,801.9 $4,
Slide 12: Insurance In Force (IIF)
Insurance In Force (IIF) ($ in billions) SEP. 30, 2021 DEC. 31, 2020 DEC. 31, 2019 IIF BY VINTAGE YEAR ($B) 2021 $65.6 31.5% - - - - $198.9 $208.2 2020 $83.6 40.1% $102.1 51.3% - - $200 2019 $23.6 11.3% $38.7 19.5% $59.5 36.3% 2018 $11.1 5.3% $18.7 9.4% $35.3 21.5% 2021 2017 $9.9 4.8% $16.3 8.2% $29
Slide 13: In Force Portfolio Premium Yield
In Force Portfolio Premium Yield U.S. Mortgage Insurance Portfolio PERIOD ENDING (in basis points) 3Q21 2Q21 1Q21 4Q20 3Q20 Base Premium Earned 42 bps 43 bps 44 bps 44 bps 45 bps Singles Cancellation Premium 3 bps 3 bps 4 bps 5 bps 6 bps Gross Premium Rate 45 bps 46 bps 48 bps 49 bps 51 bps Ceded Pr
Slide 14: Default Rollforward
Default Rollforward U.S. Mortgage Insurance Portfolio PERIOD ENDING (number of loans) 3Q21 2Q21 1Q21 4Q20 3Q20 Beginning Default Inventory 23,504 29,080 31,469 35,464 38,068 Plus: New Defaults 5,132 4,934 7,422 8,745 12,614 Less: Cures (8,862) (10,453) (9,737) (12,679) (15,135) Less: Claims Paid (41
Slide 15: Components Of Provision For Losses & LAE
Components Of Provision For Losses & LAE U.S. Mortgage Insurance Portfolio PERIOD ENDING ($ in millions) 3Q21 2Q21 1Q21 4Q20 3Q20 Provision for Losses & LAE occurring in: Current Period $11.37 $24.53 $47.76 $63.60 $55.66 Prior Year ($18.85) ($14.96) ($15.68) ($1.88) ($1.07) Provision For Losses & LA
Slide 16: Cumulative Incurred Loss Ratio By Vintage Year
Cumulative Incurred Loss Ratio By Vintage Year PRE-2015 2015 2016 2017 2018 2019 2020 9/30/21 Pre-2015 2.4% 2.9% 3.1% 3.0% 2.7% 2.6% 3.3% 3.3% 2015 2.1% 3.3% 4.0% 3.0% 2.7% 4.6% 4.5% 2016 2.3% 4.6% 3.4% 2.9% 6.4% 5.5% 2017 7.5% 4.6% 4.2% 9.7% 8.9% 2018 3.3% 6.0% 16.4% 14.5% 2019 4.2% 31.2% 24.0% 202
Slide 17: Excess Of Loss Reinsurance Coverage by Vintage
Excess Of Loss Reinsurance Coverage by Vintage As Of September 30, 2021 ($ in millions) Excess Of Loss Coverage as % RIF Ceded to of Excess Of Loss Vintage Gross RIF QS(1) RIF Net of QS(1) RIF Net of QS(1) Reference Pool 2014 and prior $929 $- $929 - $- 2015 971 - 971 97.3% 945 2016 1,918 - 1,918 97
Slide 18: Maintaining A Sufficient PMIERs Cushion
Maintaining A Sufficient PMIERs Cushion • At September 30, 2021, Essent Guaranty, Inc. (“Essent PMIERS WITH AND WITHOUT 0.3x MULTIPLIER Guaranty”) has a PMIERs required asset amount of $2.0 billion and an excess asset amount of $1.2 billion, yielding $3,500 162% SUFFICIENCY 152% a PMIERs sufficiency
Slide 19: Quarterly Financial Trends
Quarterly Financial Trends INSURANCE IN FORCE & NEW INSURANCE WRITTEN NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $203.6 $208.2 $198.9 $197.1 $190.8 $174.6 $205.4 $164.0 $165.6 $159.8 $147.0 $149.5 $135.6 $124.5 $123.6 $36.7 $28.2 $29.6 $25.0 $23.6 $15.8
Slide 20: Annual Financial Trends
Annual Financial Trends INSURANCE IN FORCE & NEW INSURANCE WRITTEN NET INCOME Total Insurance In Force ($B) Net Income ($M) Total New Insurance Written ($B) $208.2 $198.9 $555.7 $500.8 $164.0 $467.4 $413.0 $137.7 $379.7 $110.5 $107.9 $83.3 $222.6 $65.2 $63.6 $67.8 $157.3 $43.9 $47.5 $34.9 $26.2 2015
Slide 21: Key Takeaways
Key Takeaways Essent is a leading specialty Essent’s financial strength insurance company operating and flexibility positions us to in a large and growing market seize attractive opportunities with high barrier of entry as the market evolves Strong capital and liquidity, Essent has transformed its a
Slide 22: ESSENT GROUP LTD. | NYSE: ESNT © 2021 Essent Group Ltd. All rights reserved.
ESSENT GROUP LTD. | NYSE: ESNT © 2021 Essent Group Ltd. All rights reserved. | essentgroup.com | 22