Slide 1: Essent Group Ltd. Investor Presentation 2Q20
ESSENT GROUP LTD. INVESTOR PRESENTATION 2Q20 NYSE: ESNT SEPTEMBER 2020
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 @@ IPO IPO BUYManage Buy, , MANAGE&& (2013 2) 2 (2013) DISTRIBUTE Distribute (2020 3) 3 (2020) Essent Group Ltd. is a Bermuda-based holding company that went public in 2013, and is traded on INSURANCE IN FORCE the New York Stock Exchange (NY
Slide 4: 2Q20 Update
2Q20 UPDATE 2Q20 Financial Summary Commentary 2Q 2020 2019 %Δ Q2 results reflect the impact of COVID-19 on the broader U.S. economy and increased defaults for Essent. Key Metrics New Insurance Written $B $28.2 $18.0 57% Strong capital levels and liquidity, along with reinsurance, Insurance In Fo
Slide 5: Mortgage Insurance Industry: COVID-19's Impact
MORTGAGE INSURANCE INDUSTRY: COVID-19’S IMPACT COVID-19 has significantly impacted the U.S economy as a whole, resulting in increased unemployment and mortgage defaults. Housing, however, has remained strong as record low interest rates have boosted refinance activities and Mortgage Industry imp
Slide 6: Industry Fundamentals Are Supportive of Growth
INDUSTRY FUNDAMENTALS ARE SUPPORTIVE OF GROWTH Growing Domestic First-Time Homebuyer Population New Entrants to Domestic First-Time Homebuyer Population (m) 4.8 4.8 4.7 4.6 4.5 Millennial generation of roughly 80m will drive 4.3 4.2 4.3 4.3 4.2 4.4 4.4 4.4 4.5 4.6 3.9 3.8 3.9 4.0 4.1 housing’s lon
Slide 7: Market Remains an Attractive Opportunity
MARKET REMAINS AN ATTRACTIVE OPPORTUNITY Key Highlights Market Size & Growth Essent continues to maintain a strong market position while CAGR: 2013 – 2020 Insurance In Force ($B) Note: Chart not to scale continuing to grow its share of industry insurance in force Total Industry: 8% Essent’s NIW
Slide 8: Essent's Business Model: Buy, Manage & Distribute
ESSENT’S BUSINESS MODEL: BUY, MANAGE & DISTRIBUTE EssentEDGE® Monitoring Risk-based pricing Leverage underwriting engine standards to adjust Evaluates loan-level new business flows credit and borrower attributes in Shape portfolio risk calculating an MI rate profile Shapes new business R
Slide 9: Focus on Robust Capital & Strong Liquidity
FOCUS ON ROBUST CAPITAL & STRONG LIQUIDITY… Robust Capital and Strong Liquidity Enable Us to Play Both Defense and Offense Build Strong Balance Sheet Provide a buffer in a world of uncertainty 1 Send strong signal to various stakeholders Position to absorb losses in severe downside scenarios E
Slide 10: While Building a High Credit Quality Portfolio
…WHILE BUILDING A HIGH CREDIT QUALITY PORTFOLIO AS OF JUNE 30, 2020, ESSENT HAS $174.6 BILLION OF INSURANCE IN FORCE IIF By Vintage IIF By FICO Score IIF By LTV 2020 23.6% Essent Q2 2020 IIF <=2015 90.01- >=95.01% 9.4% 95.00% 14.4% 2019 700+ <680 45.3% 29.3% 85.2% 6.5% 2016 9.0% 680-699 8.3% <=90.00
Slide 11: And Maintaining a Sufficient PMIERs Cushion
… AND MAINTAINING A SUFFICIENT PMIERS CUSHION At June 30, 2020, Essent Guaranty, Inc. has a PMIERs required asset amount of $1.5 billion and an excess asset PMIERs w/ and w/o 0.3x Multiplier amount of $1.1 billion, yielding a PMIERs sufficiency ratio of 177%, with the 0.3x factor applied to the PM
Slide 12: Essent Is Operating from a Position of Strength
ESSENT IS OPERATING FROM A POSITION OF STRENGTH PMIERs Sufficiency Ratio1 At June 30, 2020, Essent has the industry leading PMIERs sufficiency ratio of 177%, with a PMIERs excess of $1.1 billion. Essent has total HoldCo liquidity of $777 million, including $702 million of cash & investments and
Slide 13: Quarterly Financial Trends
QUARTERLY FINANCIAL TRENDS Insurance In Force & New Insurance Written Net Income Total New Insurance Written ($B) Net Income ($M) $174.6 $147.0 $149.5 Total Insurance in Force ($B) $144.6 $164.0 $165.6 $136.4 $161.0 $153.3 $128.5 $127.7 $143.2 $116.0 $137.7 $131.2 $28.2 $18.0 $18.7 $15.8 $15.4 $13.9
Slide 14: Annual Financial Trends
ANNUAL FINANCIAL TRENDS Insurance In Force & New Insurance Written Net Income Total Insurance in Force ($B) Net Income ($M) $555.7 Total New Insurance Written ($B) $174.6 $164.0 $467.4 $137.7 $379.7 $110.5 $83.3 $222.6 $65.2 $63.6 $157.3 $164.9 $50.8 $47.5 $43.9 $41.7 $32.0 $34.9 $88.5 $24.8 $26.2 $
Slide 15: Key Takeaways
KEY TAKEAWAYS Essent is a leading specialty insurance company operating in a large and growing market with high barrier of entry Essent has transformed its business model from “Buy and Hold” to “Buy, Manage & Distribute” Strong capital and liquidity, along with 3rd party reinsurance, enable Essent t
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