Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36157 | |
Entity Registrant Name | ESSENT GROUP LTD. | |
Entity Incorporation, State or Country Code | D0 | |
Entity Address, Address Line One | Clarendon House | |
Entity Address, Address Line Two | 2 Church Street | |
Entity Address, City or Town | Hamilton | |
Entity Address, Postal Zip Code | HM11 | |
Entity Address, Country | BM | |
City Area Code | 441 | |
Local Phone Number | 297-9901 | |
Title of 12(b) Security | Common Shares, $0.015 par value | |
Trading Symbol | ESNT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 107,707,483 | |
Entity Central Index Key | 0001448893 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investments | ||
Total investments available for sale | $ 4,584,844 | $ 4,962,887 |
Other invested assets | 263,126 | 170,472 |
Total investments | 4,847,970 | 5,133,359 |
Cash | 79,467 | 81,491 |
Accrued investment income | 29,598 | 26,546 |
Accounts receivable | 59,069 | 46,157 |
Deferred policy acquisition costs | 10,408 | 12,178 |
Property and equipment (at cost, less accumulated depreciation of $66,562 in 2022 and $64,340 in 2021) | 19,778 | 11,921 |
Prepaid federal income tax | 405,910 | 360,810 |
Other assets | 104,704 | 49,712 |
Total assets | 5,556,904 | 5,722,174 |
Liabilities | ||
Reserve for losses and LAE | 212,494 | 407,445 |
Unearned premium reserve | 169,413 | 185,385 |
Net deferred tax liability | 340,627 | 373,654 |
Credit facility borrowings (at carrying value, less unamortized deferred costs of $4,400 in 2022 and $5,177 in 2021) | 420,600 | 419,823 |
Other accrued liabilities | 119,562 | 99,753 |
Total liabilities | 1,262,696 | 1,486,060 |
Commitments and contingencies (see Note 7) | ||
Stockholders’ Equity | ||
Common shares, $0.015 par value: Authorized - 233,333; issued and outstanding - 107,696 shares in 2022 and 109,377 shares in 2021 | 1,615 | 1,641 |
Additional paid-in capital | 1,345,598 | 1,428,952 |
Accumulated other comprehensive (loss) income | (423,577) | 50,707 |
Retained earnings | 3,370,572 | 2,754,814 |
Total stockholders’ equity | 4,294,208 | 4,236,114 |
Total liabilities and stockholders’ equity | 5,556,904 | 5,722,174 |
Fixed maturities | ||
Investments | ||
Total investments available for sale | 4,253,705 | 4,649,800 |
Short-term investments | ||
Investments | ||
Total investments available for sale | $ 331,139 | $ 313,087 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investment available for sale | ||
Amortized cost | $ 5,075,982 | $ 4,897,607 |
Property and equipment | ||
Accumulated depreciation | 66,562 | 64,340 |
Credit facility borrowings | ||
Unamortized deferred costs | $ 4,400 | $ 5,177 |
Stockholders’ equity | ||
Common shares, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common shares, authorized (in shares) | 233,333 | 233,333 |
Common shares, issued (in shares) | 107,697 | 109,377 |
Common shares, outstanding (in shares) | 107,697 | 109,377 |
Fixed maturities | ||
Investment available for sale | ||
Amortized cost | $ 4,744,377 | $ 4,584,521 |
Short-term investments | ||
Investment available for sale | ||
Amortized cost | $ 331,605 | $ 313,086 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Net premiums written | $ 209,230 | $ 202,348 | $ 619,303 | $ 608,996 |
Decrease (increase) in unearned premiums | (1,296) | 16,370 | 15,972 | 46,226 |
Net premiums earned | 207,934 | 218,718 | 635,275 | 655,222 |
Net investment income | 32,594 | 21,573 | 86,613 | 65,104 |
Realized investment (losses) gains, net | 175 | 221 | (7,648) | 609 |
Income from other invested assets | 9,617 | 40,741 | 36,275 | 41,389 |
Other income | 11,447 | 2,283 | 20,272 | 9,270 |
Total revenues | 261,767 | 283,536 | 770,787 | 771,594 |
Losses and expenses: | ||||
(Benefit) provision for losses and LAE | 4,252 | (7,483) | (178,805) | 34,490 |
Other underwriting and operating expenses | 42,144 | 42,272 | 124,838 | 125,625 |
Interest expense | 4,450 | 2,063 | 9,563 | 6,187 |
Total losses and expenses | 50,846 | 36,852 | (44,404) | 166,302 |
Income before income taxes | 210,921 | 246,684 | 815,191 | 605,292 |
Income tax expense | 32,870 | 41,331 | 131,204 | 104,496 |
Net income | $ 178,051 | $ 205,353 | $ 683,987 | $ 500,796 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.67 | $ 1.85 | $ 6.37 | $ 4.48 |
Diluted (in dollars per share) | $ 1.66 | $ 1.84 | $ 6.35 | $ 4.47 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 106,870 | 111,001 | 107,314 | 111,708 |
Diluted (in shares) | 107,337 | 111,387 | 107,732 | 112,070 |
Net income | $ 178,051 | $ 205,353 | $ 683,987 | $ 500,796 |
Other comprehensive income (loss): | ||||
Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of ($22,000) and ($8,599) in the three months ended September 30, 2022 and 2021 and ($82,132) and ($10,944) in the nine months ended September 30, 2022 and 2021 | (137,010) | (36,917) | (474,284) | (59,760) |
Total other comprehensive income (loss) | (137,010) | (36,917) | (474,284) | (59,760) |
Comprehensive income | $ 41,041 | $ 168,436 | $ 209,703 | $ 441,036 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in unrealized appreciation (depreciation) of investments, tax expense (benefit) | $ (22,000) | $ (8,599) | $ (82,132) | $ (10,944) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Balance, beginning of period at Dec. 31, 2020 | $ 1,686 | $ 1,571,163 | $ 138,274 | $ 2,151,510 | $ 0 | |
Changes in Stockholders' Equity | ||||||
Issuance of management incentive shares | 9 | (9) | ||||
Cancellation of treasury stock | (31) | (94,783) | 94,814 | |||
Dividends and dividend equivalents declared | 559 | (57,505) | ||||
Stock-based compensation expense | 16,075 | |||||
Other comprehensive loss | $ (59,760) | (59,760) | ||||
Net income | 500,796 | 500,796 | ||||
Treasury stock acquired | (94,814) | |||||
Balance, end of period at Sep. 30, 2021 | 4,167,984 | 1,664 | 1,493,005 | 78,514 | 2,594,801 | 0 |
Balance, beginning of period at Jun. 30, 2021 | 1,687 | 1,558,142 | 115,431 | 2,409,568 | 0 | |
Changes in Stockholders' Equity | ||||||
Issuance of management incentive shares | 0 | 0 | ||||
Cancellation of treasury stock | (23) | (70,838) | 70,861 | |||
Dividends and dividend equivalents declared | 190 | (20,120) | ||||
Stock-based compensation expense | 5,511 | |||||
Other comprehensive loss | (36,917) | (36,917) | ||||
Net income | 205,353 | 205,353 | ||||
Treasury stock acquired | (70,861) | |||||
Balance, end of period at Sep. 30, 2021 | 4,167,984 | 1,664 | 1,493,005 | 78,514 | 2,594,801 | 0 |
Balance, beginning of period at Dec. 31, 2021 | 4,236,114 | 1,641 | 1,428,952 | 50,707 | 2,754,814 | 0 |
Changes in Stockholders' Equity | ||||||
Issuance of management incentive shares | 9 | (9) | ||||
Cancellation of treasury stock | (35) | (97,735) | 97,770 | |||
Dividends and dividend equivalents declared | 683 | (68,229) | ||||
Stock-based compensation expense | 13,707 | |||||
Other comprehensive loss | (474,284) | (474,284) | ||||
Net income | 683,987 | 683,987 | ||||
Treasury stock acquired | (97,770) | |||||
Balance, end of period at Sep. 30, 2022 | 4,294,208 | 1,615 | 1,345,598 | (423,577) | 3,370,572 | 0 |
Balance, beginning of period at Jun. 30, 2022 | 1,615 | 1,340,650 | (286,567) | 3,216,297 | 0 | |
Changes in Stockholders' Equity | ||||||
Issuance of management incentive shares | 0 | 0 | ||||
Cancellation of treasury stock | 0 | (18) | 18 | |||
Dividends and dividend equivalents declared | 264 | (23,776) | ||||
Stock-based compensation expense | 4,702 | |||||
Other comprehensive loss | (137,010) | (137,010) | ||||
Net income | 178,051 | 178,051 | ||||
Treasury stock acquired | (18) | |||||
Balance, end of period at Sep. 30, 2022 | $ 4,294,208 | $ 1,615 | $ 1,345,598 | $ (423,577) | $ 3,370,572 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net income | $ 683,987 | $ 500,796 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Realized investment losses (gains), net | 7,648 | (609) |
Income from other invested assets | (36,275) | (41,389) |
Distribution of income from other invested assets | 11,149 | 1,568 |
Depreciation and amortization | 2,230 | 2,578 |
Stock-based compensation expense | 13,707 | 16,075 |
Amortization of premium on investment securities | 14,654 | 25,300 |
Deferred income tax provision | 49,106 | 62,670 |
Change in: | ||
Accrued investment income | (3,052) | (4,694) |
Accounts receivable | (11,811) | 1,780 |
Deferred policy acquisition costs | 1,770 | 3,698 |
Prepaid federal income tax | (45,100) | (45,650) |
Other assets | (50,722) | (3,319) |
Reserve for losses and LAE | (194,951) | 38,015 |
Unearned premium reserve | (15,972) | (46,226) |
Other accrued liabilities | (9,912) | 7,574 |
Net cash provided by operating activities | 416,456 | 518,167 |
Investing Activities | ||
Net change in short-term investments | (18,052) | 417,078 |
Purchase of investments available for sale | (1,022,095) | (1,503,051) |
Proceeds from maturities and paydowns of investments available for sale | 183,232 | 214,424 |
Proceeds from sales of investments available for sale | 673,945 | 509,998 |
Purchase of other invested assets | (69,019) | (56,166) |
Return of investment from other invested assets | 1,490 | 16,000 |
Purchase of property and equipment | (2,511) | (1,695) |
Net cash used in investing activities | (253,010) | (403,412) |
Financing Activities | ||
Credit facility borrowings | 0 | 25,000 |
Credit facility repayments | 0 | (25,000) |
Treasury stock acquired | (97,770) | (94,814) |
Payment of issuance costs for credit facility | (154) | 0 |
Dividends paid | (67,546) | (56,946) |
Net cash used in financing activities | (165,470) | (151,760) |
Net (decrease) increase in cash | (2,024) | (37,005) |
Cash at beginning of year | 81,491 | 102,830 |
Cash at end of period | 79,467 | 65,825 |
Supplemental Disclosure of Cash Flow Information | ||
Income tax payments | (73,226) | (35,000) |
Interest payments | (8,044) | (5,321) |
Noncash Transactions | ||
Lease liabilities arising from obtaining right-of-use assets | $ 10,096 | $ 0 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Essent Group Ltd. (“Essent Group”) is a Bermuda-based holding company, which, through its wholly-owned subsidiaries, offers private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Mortgage insurance facilitates the sale of low down payment (generally less than 20%) mortgage loans into the secondary mortgage market, primarily to two government-sponsored enterprises (“GSEs”), Fannie Mae and Freddie Mac. The primary mortgage insurance operations are conducted through Essent Guaranty, Inc. (“Essent Guaranty”), a wholly-owned subsidiary approved as a qualified mortgage insurer by the GSEs and is licensed to write mortgage insurance in all 50 states and the District of Columbia. Essent Guaranty reinsures new insurance written ("NIW") to Essent Reinsurance Ltd. (“Essent Re”), an affiliated Bermuda domiciled Class 3A Insurer licensed pursuant to Section 4 of the Bermuda Insurance Act 1978 that provides insurance and reinsurance coverage of mortgage credit risk. In April 2021, Essent Guaranty and Essent Re agreed to increase the quota share reinsurance coverage of Essent Guaranty’s NIW provided by Essent Re from 25% to 35% effective January 1, 2021. The quota share reinsurance coverage provided by Essent Re for Essent Guaranty’s NIW prior to January 1, 2021 will continue to be 25%, the quota share percentage in effect at the time NIW was first ceded. Essent Re also provides insurance and reinsurance to Freddie Mac and Fannie Mae. In 2016, Essent Re formed Essent Agency (Bermuda) Ltd., a wholly-owned subsidiary, which provides underwriting consulting services to third-party reinsurers. In accordance with certain state law requirements then in effect, Essent Guaranty also reinsures that portion of the risk that is in excess of 25% of the mortgage balance with respect to loans insured prior to April 1, 2019, after consideration of other reinsurance, to Essent Guaranty of PA, Inc. (“Essent PA”), an affiliate. In addition to offering mortgage insurance, we provide contract underwriting services on a limited basis through CUW Solutions, LLC ("CUW Solutions"), a Delaware limited liability company, that provides, among other things, mortgage contract underwriting services to lenders and mortgage insurance underwriting services to affiliates. We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) pursuant to such rules and regulations. In the opinion of management, the statements include all adjustments (which include normal recurring adjustments) required for a fair statement of financial position, results of operations and cash flows for the interim periods presented. These statements should be read in conjunction with the consolidated financial statements and notes thereto, including Note 1 and Note 2 to the consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2021, which discloses the principles of consolidation and a summary of significant accounting policies. The results of operations for the interim periods are not necessarily indicative of the results for the full year. We evaluated the need to recognize or disclose events that occurred subsequent to September 30, 2022 prior to the issuance of these condensed consolidated financial statements. Certain amounts in prior years have been reclassified to conform to the current year presentation. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Not Yet Adopted In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments in this update provide temporary optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. It provides optional expedients and exceptions for applying generally accepted accounting principles to contract, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. The adoption of, and future elections under, this ASU are not expected to have a material impact on our consolidated financial statements as the ASU will ease, if warranted, the requirements for accounting for the future effects of the rate reform. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts and other transactions. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . This update clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. The update clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. The update also requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The adoption of this ASU is not expected to have a material effect on the Company's consolidated operating results or financial position. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments available for sale consist of the following: September 30, 2022 (In thousands) Amortized Unrealized Unrealized Fair U.S. Treasury securities $ 566,466 $ 2 $ (30,832) $ 535,636 U.S. agency securities — — — — U.S. agency mortgage-backed securities 879,028 — (126,792) 752,236 Municipal debt securities (1) 627,772 95 (68,083) 559,784 Non-U.S. government securities 70,126 — (9,292) 60,834 Corporate debt securities (2) 1,501,150 7 (155,888) 1,345,269 Residential and commercial mortgage securities 586,771 123 (63,286) 523,608 Asset-backed securities 645,522 15 (37,207) 608,330 Money market funds 199,147 — — 199,147 Total investments available for sale $ 5,075,982 $ 242 $ (491,380) $ 4,584,844 December 31, 2021 (In thousands) Amortized Unrealized Unrealized Fair U.S. Treasury securities $ 447,926 $ 3,833 $ (2,966) $ 448,793 U.S. agency securities 5,501 3 — 5,504 U.S. agency mortgage-backed securities 1,005,611 13,365 (10,113) 1,008,863 Municipal debt securities (1) 598,764 30,122 (1,287) 627,599 Non-U.S. government securities 77,366 3,232 (855) 79,743 Corporate debt securities (2) 1,428,645 36,067 (9,465) 1,455,247 Residential and commercial mortgage securities 541,638 10,452 (6,667) 545,423 Asset-backed securities 582,144 1,673 (2,114) 581,703 Money market funds 210,012 — — 210,012 Total investments available for sale $ 4,897,607 $ 98,747 $ (33,467) $ 4,962,887 September 30, December 31, (1) The following table summarizes municipal debt securities as of: 2022 2021 Special revenue bonds 78.5 % 77.1 % General obligation bonds 21.5 20.5 Certificate of participation bonds — 1.9 Tax allocation bonds — 0.5 Total 100.0 % 100.0 % September 30, December 31, (2) The following table summarizes corporate debt securities as of: 2022 2021 Financial 39.4 % 33.7 % Consumer, non-cyclical 17.5 19.8 Communications 8.8 11.4 Industrial 6.8 7.0 Consumer, cyclical 7.2 7.0 Energy 6.6 6.0 Technology 5.6 6.8 Utilities 6.1 4.6 Basic materials 2.0 3.7 Total 100.0 % 100.0 % The amortized cost and fair value of investments available for sale at September 30, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. (In thousands) Amortized Fair U.S. Treasury securities: Due in 1 year $ 169,120 $ 167,667 Due after 1 but within 5 years 353,483 330,053 Due after 5 but within 10 years 38,835 34,103 Due after 10 years 5,028 3,813 Subtotal 566,466 535,636 U.S. agency securities: Due in 1 year — — Due after 1 but within 5 years — — Subtotal — — Municipal debt securities: Due in 1 year 6,992 6,943 Due after 1 but within 5 years 141,922 137,108 Due after 5 but within 10 years 164,538 151,508 Due after 10 years 314,320 264,225 Subtotal 627,772 559,784 Non-U.S. government securities: Due in 1 year 10,452 10,396 Due after 1 but within 5 years 27,362 25,697 Due after 5 but within 10 years 8,893 7,979 Due after 10 years 23,419 16,762 Subtotal 70,126 60,834 Corporate debt securities: Due in 1 year 235,975 233,177 Due after 1 but within 5 years 696,023 657,186 Due after 5 but within 10 years 419,294 345,569 Due after 10 years 149,858 109,337 Subtotal 1,501,150 1,345,269 U.S. agency mortgage-backed securities 879,028 752,236 Residential and commercial mortgage securities 586,771 523,608 Asset-backed securities 645,522 608,330 Money market funds 199,147 199,147 Total investments available for sale $ 5,075,982 $ 4,584,844 The components of realized investment (losses) gains, net on the condensed consolidated statements of comprehensive income were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Realized gross gains $ 1,650 $ 654 $ 14,397 $ 1,422 Realized gross losses (1,370) (433) (14,634) (813) Impairment loss (105) — (7,411) — The fair value of investments available for sale in an unrealized loss position and the related unrealized losses for which no allowance for credit loss has been recorded were as follows: Less than 12 months 12 months or more Total September 30, 2022 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 361,655 $ (15,490) $ 161,968 $ (15,342) $ 523,623 $ (30,832) U.S. agency mortgage-backed securities 508,415 (74,350) 243,821 (52,442) 752,236 (126,792) Municipal debt securities 527,796 (64,097) 14,588 (3,986) 542,384 (68,083) Non-U.S. government securities 51,784 (5,922) 9,050 (3,370) 60,834 (9,292) Corporate debt securities 1,166,786 (127,688) 143,745 (28,200) 1,310,531 (155,888) Residential and commercial mortgage securities 376,356 (38,046) 143,118 (25,240) 519,474 (63,286) Asset-backed securities 481,105 (27,029) 122,339 (10,178) 603,444 (37,207) Total $ 3,473,897 $ (352,622) $ 838,629 $ (138,758) $ 4,312,526 $ (491,380) Less than 12 months 12 months or more Total December 31, 2021 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 207,122 $ (2,170) $ 28,012 $ (796) $ 235,134 $ (2,966) U.S. agency mortgage-backed securities 582,108 (9,414) 26,131 (699) 608,239 (10,113) Municipal debt securities 91,719 (1,281) 312 (6) 92,031 (1,287) Non-U.S. government securities 22,986 (855) — — 22,986 (855) Corporate debt securities 522,120 (7,200) 46,875 (2,265) 568,995 (9,465) Residential and commercial mortgage securities 268,617 (5,200) 38,256 (1,467) 306,873 (6,667) Asset-backed securities 339,137 (1,954) 13,101 (160) 352,238 (2,114) Total $ 2,033,809 $ (28,074) $ 152,687 $ (5,393) $ 2,186,496 $ (33,467) At September 30, 2022 and December 31, 2021, we held 2,720 and 1,180 individual investment securities, respectively, that were in an unrealized loss position. We assess our intent to sell these securities and whether we will be required to sell these securities before the recovery of their amortized cost basis when determining whether to record an impairment on the securities in an unrealized loss position. In assessing whether the decline in the fair value at September 30, 2022 of any of these securities resulted from a credit loss or other factors, we made inquiries of our investment managers to determine that each issuer was current on its scheduled interest and principal payments. We reviewed the credit rating of these securities noting that approximately 98% of the securities at September 30, 2022 had investment-grade ratings. We concluded that gross unrealized losses noted above were primarily associated with the changes in interest rates subsequent to purchase rather than due to credit. During the three and nine months ended September 30, 2022, we recorded impairments of $0.1 million and $7.4 million, respectively, due to our intent to sell securities in an unrealized loss position. There were no impairments recorded during the three or nine months ended September 30, 2021. The Company's other invested assets at September 30, 2022 and December 31, 2021 totaled $263.1 million and $170.5 million, respectively. Other invested assets are principally comprised of limited partnership interests which are generally accounted for under the equity method or fair value using net asset value (or its equivalent) as a practical expedient. Our proportionate share of earnings or losses or changes in fair value are reported in income from other invested assets on the condensed consolidated statements of comprehensive income. For entities accounted for under the equity method that follow industry-specific guidance for investment companies, our proportionate share of earnings or losses includes changes in the fair value of the underlying assets of these entities. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. Through June 30, 2021, unrealized gains and losses reported by these entities were included in other comprehensive income (“OCI”). Subsequent to June 30, 2021, management concluded that unrealized gains and losses on these investments should be reflected in earnings rather than OCI. Income from other invested assets for the three and nine months ended September 30, 2022, includes $9.9 million and $22.5 million of net unrealized gains, respectively. Other invested assets that are accounted for at fair value using the net asset value (or its equivalent) as a practical expedient totaled $172.6 million as of September 30, 2022. The majority of these investments were in limited partnerships invested in real estate or technology. At September 30, 2022, maximum future funding commitments were $29.3 million. For limited partnership investments that have a contractual expiration date, we expect the liquidation of the underlying assets to occur over the next two The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $9.1 million at September 30, 2022 and $9.7 million at December 31, 2021. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. The fair value of the investments on deposit in these trusts was $1.0 billion at September 30, 2022 and $982.6 million at December 31, 2021. Essent Guaranty is required to maintain assets on deposit in connection with its fully collateralized reinsurance agreements (see Note 4). The fair value of the assets on deposit was $8.6 million at September 30, 2022 and $8.5 million at December 31, 2021. Essent Guaranty is also required to maintain assets on deposit for the benefit of the sponsor of a fixed income investment commitment. The fair value of the assets on deposit was $9.0 million at September 30, 2022 and $9.0 million at December 31, 2021. Net investment income consists of: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Fixed maturities $ 33,948 $ 23,001 $ 91,245 $ 69,037 Short-term investments 872 30 1,132 158 Gross investment income 34,820 23,031 92,377 69,195 Investment expenses (2,226) (1,458) (5,764) (4,091) Net investment income $ 32,594 $ 21,573 $ 86,613 $ 65,104 |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance In the ordinary course of business, our insurance subsidiaries may use reinsurance to provide protection against adverse loss experience and to expand our capital sources. Reinsurance recoverables are recorded as assets and included in other assets on our condensed consolidated balance sheets, predicated on a reinsurer's ability to meet their obligations under the reinsurance agreements. If the reinsurers are unable to satisfy their obligations under the agreements, our insurance subsidiaries would be liable for such defaulted amounts. The effect of reinsurance on net premiums written and earned is as follows: Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Net premiums written: Direct $ 239,773 $ 229,228 $ 692,687 $ 693,434 Ceded (1) (30,543) (26,880) (73,384) (84,438) Net premiums written $ 209,230 $ 202,348 $ 619,303 $ 608,996 Net premiums earned: Direct $ 238,477 $ 245,598 $ 708,659 $ 739,660 Ceded (1) (30,543) (26,880) (73,384) (84,438) Net premiums earned $ 207,934 $ 218,718 $ 635,275 $ 655,222 (1) Net of profit commission. Quota Share Reinsurance Effective September 1, 2019, Essent Guaranty entered into a quota share reinsurance agreement with a panel of third-party reinsurers ("QSR 2019"). Each of the third-party reinsurers has an insurer financial strength rating of A or better by S&P Global Ratings, A.M. Best or both. Under QSR 2019, Essent Guaranty will cede premiums earned related to 40% of risk on eligible single premium policies and 20% of risk on all other eligible policies written September 1, 2019 through December 31, 2020, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a 20% ceding commission, and a profit commission of up to 60% that varies directly and inversely with ceded claims. QSR 2019 is scheduled to terminate on December 31, 2030. Essent Guaranty has certain termination rights under QSR 2019, including the option to terminate QSR 2019 with no termination fee on December 31, 2021, and the option, subject to a termination fee, to terminate QSR 2019 on December 31, 2022, or annually thereafter. As Essent Guaranty did not exercise its option to terminate QSR 2019 effective December 31, 2021, the maximum profit commission that Essent Guaranty could earn will increase to 63% in 2022 and thereafter. Effective January 1, 2022, Essent Guaranty entered into a quota share reinsurance agreement with a panel of third-party reinsurers ("QSR 2022"). Each of the third-party reinsurers has an insurer minimum financial strength rating of A- or better by S&P Global Ratings, A.M. Best or both. Under QSR 2022, Essent Guaranty will cede premiums earned related to 20% of risk on all eligible policies written January 1, 2022 through December 31, 2022, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a 20% ceding commission, and a profit commission of up to 62% that varies directly and inversely with ceded claims. QSR 2022 is scheduled to terminate on December 31, 2032. Essent Guaranty has certain termination rights under QSR 2022, including the option to terminate QSR 2022, subject to a termination fee, on December 31, 2024, or quarterly thereafter. Total RIF ceded under QSR 2019 and QSR 2022 was $6.5 billion as of September 30, 2022. Excess of Loss Reinsurance Essent Guaranty has entered into fully collateralized reinsurance agreements ("Radnor Re Transactions") with unaffiliated special purpose insurers domiciled in Bermuda. For the reinsurance coverage periods, Essent Guaranty and its affiliates retain the first layer of the respective aggregate losses, and a Radnor Re special purpose insurer will then provide second layer coverage up to the outstanding reinsurance coverage amount. Essent Guaranty and its affiliates retain losses in excess of the outstanding reinsurance coverage amount. The reinsurance premium due to each Radnor Re special purpose insurer is calculated by multiplying the outstanding reinsurance coverage amount at the beginning of a period by a coupon rate, which is the sum of one-month LIBOR or SOFR plus a risk margin, and then subtracting actual investment income collected on the assets in the related reinsurance trust during that period. The aggregate excess of loss reinsurance coverage decreases over a ten-year period as the underlying covered mortgages amortize. Essent Guaranty has rights to terminate the Radnor Re Transactions. The Radnor Re entities collateralized the coverage by issuing mortgage insurance-linked notes ("ILNs") in an aggregate amount equal to the initial coverage to unaffiliated investors. The notes have ten-year legal maturities and are non- recourse to any assets of Essent Guaranty or its affiliates. The proceeds of the notes were deposited into reinsurance trusts for the benefit of Essent Guaranty and will be the source of reinsurance claim payments to Essent Guaranty and principal repayments on the ILNs. Effective June 1, 2022, Essent Guaranty entered into a reinsurance agreement with a panel of reinsurers that provides excess of loss coverage on new insurance written from October 1, 2021 through December 31, 2022. For the reinsurance coverage period, Essent Guaranty and its affiliates retain the first layer of the respective aggregate losses, and the reinsurance panel will then provide second layer coverage up to the outstanding reinsurance coverage amount. Essent Guaranty and its affiliates retain losses in excess of the outstanding reinsurance coverage amount. Essent Guaranty has also entered into reinsurance agreements with panels of reinsurers that provide aggregate excess of loss coverage immediately above or pari-passu to the coverage provided by the Radnor Re Transactions. The aggregate excess of loss reinsurance coverage decreases over a ten-year period as the underlying covered mortgages amortize. Essent Guaranty has rights to terminate these reinsurance agreements. The following table summarizes Essent Guaranty's excess of loss reinsurance agreements as of September 30, 2022: Vintage Year Reinsurer Effective Date Optional Termination Date 2015 & 2016 Radnor Re 2019-2 Ltd. June 20, 2019 June 25, 2024 2017 Radnor Re 2018-1 Ltd. March 22, 2018 March 25, 2023 (1) 2017 Panel of Reinsurers November 1, 2018 October 1, 2023 (2) 2018 Radnor Re 2019-1 Ltd. February 28, 2019 February 25, 2026 2018 Panel of Reinsurers February 28, 2019 February 25, 2026 2019 Radnor Re 2020-1 Ltd. January 30, 2020 January 25, 2027 2019 Panel of Reinsurers January 30, 2020 January 25, 2027 2020 & 2021 Radnor Re 2021-1 Ltd. June 23, 2021 June 26, 2028 2021 Radnor Re 2021-2 Ltd. November 10, 2021 November 25, 2027 2021 & 2022 Panel of Reinsurers June 1, 2022 January 1, 2030 2021 & 2022 Radnor Re 2022-1 Ltd. September 21, 2022 September 25, 2028 (1) If the reinsurance agreement is not terminated at the optional termination date, the risk margin component of the reinsurance premium increases by 50%. (2) If the reinsurance agreement is not terminated at the optional termination date, the reinsurance premium increases by 50%. The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions as of September 30, 2022: (In thousands) Remaining Vintage Year Remaining Remaining ILN Other Reinsurance Total Remaining 2015 & 2016 $ 6,415,924 $ 1,740,167 $ 61,478 $ — $ 61,478 $ 206,925 2017 6,129,801 1,610,026 242,123 127,770 (6) 369,893 216,632 2018 6,961,516 1,791,216 325,537 76,144 (7) 401,681 248,875 2019 (3) 8,578,642 2,203,474 448,805 49,870 (8) 498,675 214,874 2020 & 2021 (4) 43,021,732 10,731,139 486,933 — 486,933 278,919 2021 (5) 42,367,258 11,236,549 423,462 — 423,462 279,415 2021 & 2022 (9) 63,515,812 17,043,854 — 119,307 119,307 426,096 2021 & 2022 (10) 34,325,434 9,205,630 237,868 — 237,868 303,761 Total $ 211,316,119 $ 55,562,055 $ 2,226,206 $ 373,091 $ 2,599,297 $ 1,940,960 (11) (3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019. (4) Reinsurance coverage on new insurance written from August 1, 2020 through March 31, 2021. (5) Reinsurance coverage on new insurance written from April 1, 2021 through September 30, 2021. (6) Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd. (7) Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd. (8) Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd. (9) Reinsurance coverage on new insurance written from October 1, 2021 through December 31, 2022. (10) Reinsurance coverage on new insurance written from October 1, 2021 through July 31, 2022. (11) The total remaining first layer retention differs from the sum of the individual reinsurance transactions as a result of overlapping coverage between certain transactions. Based on the level of delinquencies reported to us, the ILN transactions entered into prior to March 31, 2020 became subject to a "trigger event" as of June 25, 2020. The amortization of principal of the notes issued by the unaffiliated special purpose insurers in connection with those ILN transactions is suspended and the aggregate excess of loss reinsurance coverage will not amortize during the continuation of a trigger event. As of November 26, 2021, Radnor Re 2019-2 was no longer subject to a trigger event. Radnor Re 2020-1 was no longer subject to a trigger event as of July 25, 2022. The amount of monthly reinsurance premium ceded to the Radnor Re entities will fluctuate due to changes in one-month LIBOR or SOFR and changes in money market rates that affect investment income collected on the assets in the reinsurance trusts. As the reinsurance premium will vary based on changes in these rates, we concluded that the Radnor Re Transactions contain embedded derivatives that will be accounted for separately like freestanding derivatives. In connection with the Radnor Re Transactions, we concluded that the risk transfer requirements for reinsurance accounting were met as each Radnor Re entity is assuming significant insurance risk and a reasonable possibility of a significant loss. In addition, we assessed whether each Radnor Re entity was a variable interest entity ("VIE") and the appropriate accounting for the Radnor Re entities if they were VIEs. A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. A VIE is consolidated by its primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of the decision-making ability and ability to influence activities that significantly affect the economic performance of the VIE. We concluded that the Radnor Re entities are VIEs. However, given that Essent Guaranty (1) does not have the unilateral power to direct the activities that most significantly affect their economic performance and (2) does not have the obligation to absorb losses or the right to receive benefits that could be potentially significant to these entities, the Radnor Re entities are not consolidated in these financial statements. The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivative, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our condensed consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trust, each as of September 30, 2022: Maximum Exposure to Loss (In thousands) Total VIE Assets On - Balance Sheet Off - Balance Sheet Total Radnor Re 2018-1 Ltd. $ 242,123 $ 369 $ 25 $ 394 Radnor Re 2019-1 Ltd. 325,537 (1,884) 59 (1,825) Radnor Re 2019-2 Ltd. 61,478 (1,474) 1 (1,473) Radnor Re 2020-1 Ltd. 448,805 (1,098) 78 (1,020) Radnor Re 2021-1 Ltd. 486,933 (1,882) 136 (1,746) Radnor Re 2021-2 Ltd. 423,462 1,033 220 1,253 Radnor Re 2022-1 Ltd. 237,868 504 49 $ 553 Total $ 2,226,206 $ (4,432) $ 568 $ (3,864) The assets of Radnor Re are the source of reinsurance claim payments to Essent Guaranty and provide capital relief under the PMIERs financial strength requirements (see Note 14). A decline in the assets available to pay claims would reduce the capital relief available to Essent Guaranty. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“LAE”) for the nine months ended September 30: (In thousands) 2022 2021 Reserve for losses and LAE at beginning of period $ 407,445 $ 374,941 Less: Reinsurance recoverables 25,940 19,061 Net reserve for losses and LAE at beginning of period 381,505 355,880 Add provision for losses and LAE, net of reinsurance, occurring in: Current period 63,236 83,973 Prior years (242,041) (49,483) Net incurred losses and LAE during the current period (178,805) 34,490 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current period 111 231 Prior years 3,339 4,153 Net loss and LAE payments during the current period 3,450 4,384 Net reserve for losses and LAE at end of period 199,250 385,986 Plus: Reinsurance recoverables 13,244 26,970 Reserve for losses and LAE at end of period $ 212,494 $ 412,956 For the nine months ended September 30, 2022, $3.3 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $242.0 million favorable prior year development, including $164.1 million related to defaults notices received in April 2020 through September 2020 ("Early COVID Defaults"), during the nine months ended September 30, 2022. Net reserves remaining as of September 30, 2022 for prior years are $136.1 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the nine months ended September 30, 2021, $4.2 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $49.5 million favorable prior year development during the nine months ended September 30, 2021. Net reserves remaining as of September 30, 2021 for prior years were $302.2 million as a result of re-estimation of unpaid losses and loss adjustment expenses. In both periods, the favorable prior years' loss development was the result of a re-estimation of amounts ultimately to be paid on prior year defaults in the default inventory, including the impact of previously identified defaults that cured. Original estimates are increased or decreased as additional information becomes known regarding individual claims. Due to business restrictions, stay-at-home orders and travel restrictions implemented in March 2020 as a result of COVID-19, unemployment in the United States increased significantly in the second quarter of 2020, declining during the second half of 2020 and throughout 2021. As unemployment is one of the most common reasons for borrowers to default on their mortgage, the increase in unemployment resulted in an increase in the number of delinquencies on the mortgages that we insure and has the potential to increase claim frequencies on defaults. In response to the COVID-19 pandemic, the United States government enacted a number of policies to provide fiscal stimulus to the economy and relief to those affected by this global disaster. Specifically, mortgage forbearance programs and foreclosure moratoriums were instituted by Federal legislation along with actions taken by the Federal Housing Finance Agency (“FHFA”), Fannie Mae and Freddie Mac (collectively the “GSEs”). The mortgage forbearance plans provide for eligible homeowners who were adversely impacted by COVID-19 to temporarily reduce or suspend their mortgage payments for up to 18 months for loans in an active COVID-19-related forbearance program as of February 28, 2021. For borrowers that have the ability to begin to pay their mortgage at the end of the forbearance period, we expect that mortgage servicers will work with them to modify their loans at which time the mortgage will be removed from delinquency status. We believe that the forbearance process could have a favorable effect on the frequency of claims that we ultimately pay. Based on the fiscal stimulus, forbearance programs and the foreclosure moratoriums put in place and the credit characteristics of the defaulted loans, we expected the ultimate number of Early COVID Defaults that result in claims would be less than our historical default-to-claim experience. Accordingly, we recorded a reserve equal to approximately 7% of the initial risk in force for the Early COVID Defaults. The reserve for the Early COVID Defaults had not been adjusted as of December 31, 2021. As of March 31, 2022, the defaulted loans reported to us in the second and third quarters of 2020 had reached the end of their forbearance periods. During the first quarter of 2022, the Early COVID Defaults cured at elevated levels, and the cumulative cure rate for the Early COVID Defaults at March 31, 2022 exceeded our initial estimated cure rate implied by our 7% estimate of ultimate loss for these defaults. Based on cure activity through March 31, 2022 and our expectations for future cure activity, we lowered our estimate of ultimate loss for the Early COVID Defaults from 7% to 4% of the initial risk in force. During the three months ended June 30, 2022, Early COVID Defaults cured at levels that exceeded our estimate as of March 31, 2022, and we further lowered our estimate of loss for these defaults as of June 30, 2022 to 2% of the initial risk in force. These revisions to our estimate of ultimate loss for the Early COVID Defaults resulted in a benefit recorded to the provision for losses of $164.1 million for the nine months ended September 30, 2022. As of September 30, 2022, approximately 98% of the Early COVID Defaults had cured. Due to the level of Early COVID Defaults remaining in the default inventory, as of September 30, 2022, we resumed reserving for the Early COVID Defaults using our normal reserve methodology. The transition of defaults to foreclosure or claim has not returned to pre-pandemic levels. As a result, the level of defaults in the default inventory that have missed twelve or more payments is above pre-pandemic levels. The economy in the United States is currently experiencing elevated levels of consumer price inflation. The Federal Reserve has increased the target federal funds rate several times during 2022 in an effort to reduce consumer price inflation. These rate increases have resulted in higher mortgage interest rates which may lower home sale activity and affect the options available to delinquent borrowers. It is reasonably possible that our estimate of losses could change in the near term as a result of changes in the economic environment, the impact of elevated levels of consumer price inflation on home sale activity, housing inventory and home prices. In September 2022, Hurricane Ian made landfall in Florida and caused property damage in certain counties. We expect to experience increased defaults in these areas beginning in the fourth quarter of 2022. We are currently unable to estimate how many claims we ultimately may have to pay associated with any defaults in the hurricane impacted areas. There are many factors contributing to the uncertainty surrounding these insured loans. Under our master policy, loan servicers are not required to notify us of a default until the borrower has missed two consecutive minimum payments. Also, the level of damage being reported in these areas varies significantly from region to region. Further, under our master policy, our exposure may be limited on hurricane-related claims. For example, we are permitted to exclude a claim entirely where damage to the property underlying a mortgage was the proximate cause of the default and adjust a claim where the property underlying a mortgage in default is subject to unrestored physical damage. These events have not materially affected our reserves as of September 30, 2022. The |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Credit Facility Essent Group and its subsidiaries, Essent Irish Intermediate Holdings Limited and Essent US Holdings, Inc. (collectively, the "Borrowers"), are parties to a secured credit facility (the “Credit Facility”) with committed capacity of $825 million. The Credit Facility provides for a $400 million revolving credit facility and $425 million of term loans. The Credit Facility also provides for up to $175 million aggregate principal amount of uncommitted incremental term loan and/or revolving credit facilities that may be exercised at the Borrowers' option so long as the Borrowers receive commitments from the lenders. Borrowings under the Credit Facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries. Borrowings accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. A commitment fee is due quarterly on the average daily amount of the undrawn revolving commitment. The applicable margin and the commitment fee are based on the senior unsecured debt rating or long-term issuer rating of Essent Group to the extent available, or the insurer financial strength rating of Essent Guaranty. The annual commitment fee rate at September 30, 2022 was 0.25%. The obligations under the Credit Facility are secured by certain assets of the Borrowers, excluding the stock and assets of its insurance and reinsurance subsidiaries. The Credit Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and Essent Guaranty's compliance with the PMIERs (see Note 14). The borrowings under the Credit Facility contractually mature on December 10, 2026. As of September 30, 2022, the Company was in compliance with the covenants and $425 million had been borrowed under the Credit Facility with a weighted average interest rate of 4.39%. As of December 31, 2021, $425 million had been borrowed with a weighted average interest rate of 1.79%. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Obligations under Guarantees Under the terms of CUW Solutions' contract underwriting agreements with lenders and subject to contractual limitations on liability, we agree to indemnify certain lenders against losses incurred in the event that we make an error in determining whether loans processed meet specified underwriting criteria, to the extent that such error materially restricts or impairs the salability of such loan, results in a material reduction in the value of such loan or results in the lender repurchasing the loan. The indemnification may be in the form of monetary or other remedies. We paid less than $0.1 million related to remedies for each of the nine months ended September 30, 2022 and 2021. As of September 30, 2022, management believes any potential claims for indemnification related to contract underwriting services through September 30, 2022 are not material to our consolidated financial position or results of operations. In addition to the indemnifications discussed above, in the normal course of business, we enter into agreements or other relationships with third parties pursuant to which we may be obligated under specified circumstances to indemnify the counterparties with respect to certain matters. Our contractual indemnification obligations typically arise in the context of agreements entered into by us to, among other things, purchase or sell services, finance our business and business transactions, lease real property and license intellectual property. The agreements we enter into in the normal course of business generally require us to pay certain amounts to the other party associated with claims or losses if they result from our breach of the agreement, including the inaccuracy of representations or warranties. The agreements we enter into may also contain other indemnification provisions that obligate us to pay amounts upon the occurrence of certain events, such as the negligence or willful misconduct of our employees, infringement of third-party intellectual property rights or claims that performance of the agreement constitutes a violation of law. Generally, payment by us under an indemnification provision is conditioned upon the other party making a claim, and typically we can challenge the other party’s claims. Further, our indemnification obligations may be limited in time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us under an indemnification agreement or obligation. As of September 30, 2022, contingencies triggering material indemnification obligations or payments have not occurred historically and are not expected to occur. The nature of the indemnification provisions in the various types of agreements and relationships described above are believed to be low risk and pervasive, and we consider them to have a remote risk of loss or payment. We have not recorded any provisions on the condensed consolidated balance sheets related to indemnifications. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Capital Stock | Capital Stock Our authorized share capital consists of 233.3 million shares of a single class of common shares. The common shares have no pre-emptive rights or other rights to subscribe for additional shares, and no rights of redemption, conversion or exchange. Under certain circumstances and subject to the provisions of Bermuda law and our bye-laws, we may be required to make an offer to repurchase shares held by members. The common shares rank pari-passu with one another in all respects as to rights of payment and distribution. In general, holders of common shares will have one vote for each common share held by them and will be entitled to vote, on a non-cumulative basis, at all meetings of shareholders. In the event that a shareholder is considered a 9.5% Shareholder under our bye-laws, such shareholder's votes will be reduced by whatever amount is necessary so that after any such reduction the votes of such shareholder will not result in any other person being treated as a 9.5% Shareholder with respect to the vote on such matter. Under these provisions certain shareholders may have their voting rights limited to less than one vote per share, while other shareholders may have voting rights in excess of one vote per share. Dividends The following table presents the amounts declared and paid per common share each quarter: Quarter Ended 2021 March 31 $ 0.16 June 30 0.17 September 30 0.18 December 31 0.19 Total dividends per common share declared and paid $ 0.70 Quarter Ended 2022 March 31 $ 0.20 June 30 0.21 September 30 0.22 Total dividends per common share declared and paid $ 0.63 In November 2022, the Board of Directors declared a quarterly cash dividend of $0.23 per common share payable on December 12, 2022, to shareholders of record on December 1, 2022. Share Repurchase Plan |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In connection with the IPO in 2013, Essent Group's Board of Directors adopted, and Essent Group's shareholders approved, the Essent Group Ltd. 2013 Long-Term Incentive Plan (the "2013 Plan"), which was effective upon completion of the initial public offering. The types of awards available under the 2013 Plan include nonvested shares, nonvested share units, non- qualified share options, incentive stock options, share appreciation rights, and other share-based or cash-based awards. Nonvested shares and nonvested share units granted under the 2013 Plan have rights to dividends, which entitle holders to the same dividend value per share as holders of common shares in the form of dividend equivalent units ("DEUs"). DEUs are subject to the same vesting and other terms and conditions as the corresponding nonvested shares and nonvested share units. DEUs vest when the underlying shares or share units vest and are forfeited if the underlying share or share units forfeit prior to vesting. The following table summarizes nonvested common share, nonvested common share unit and DEU activity for the nine months ended September 30, 2022: Time and Performance- Time-Based Share Units DEUs (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Dividend Equivalent Units Weighted Outstanding at beginning of year 500 $ 31.29 140 $ 45.31 461 $ 47.94 28 $ 41.75 Granted 308 14.83 87 46.15 161 42.65 18 41.10 Vested (139) 45.32 (69) 44.86 (178) 47.87 (13) 41.28 Forfeited — N/A — N/A (79) 48.71 (2) 42.70 Outstanding at September 30, 2022 669 $ 21.04 158 $ 45.97 365 $ 45.43 31 $ 41.53 In February 2022, certain members of senior management were granted nonvested common shares under the Essent Group Ltd. 2013 Long-Term Incentive Plan ("2013 Plan") that are subject to time-based and performance-based vesting. The time-based share awards granted in February 2022 vest in three Relative Total Shareholder Return ≤25th percentile 50th percentile ≥75th percentile Three-Year Book 13% "Target" 100 % 150 % 200 % 11% 75 % 125 % 175 % 9% 50 % 100 % 150 % 7% 25 % 75 % 125 % 5% 0 % 50 % 100 % In the event that the compounded annual book value per share growth or the relative total shareholder return falls between the performance levels shown above, the nonvested common shares earned will be determined on a straight-line basis between the respective levels shown. In May 2022, additional shares were granted to a member of senior management that are subject to the same time-based and performance-based vesting as the February 2022 grants. In connection with our incentive program covering bonus awards for performance year 2021, in February 2022, time-based share units were issued to certain employees that vest in three Quoted market prices are used for the valuation of common shares granted that do not contain a market condition under ASC 718. The performance-based share awards granted in February 2022 and February 2021 contain a market condition and were valued based on analysis provided by a third-party valuation firm using a risk neutral simulation taking into effect the vesting conditions of the grant. In February 2021, the performance-based share awards granted in 2019 and 2020 to certain members of senior management were amended to provide that such awards will no longer be subject to the achievement of the compounded annual book value per share growth metrics and will be subject to only service-based vesting. As a result, the unvested shares subject to the amended 2019 awards vested on March 1, 2022 and the amended 2020 awards will vest on March 1, 2023, subject to the continued service requirements and other terms and conditions set forth in the applicable award agreements, without taking into consideration any performance metrics. Total incremental compensation expense related to amending these awards is $4.0 million. As of September 30, 2022, there was $0.5 million of unrecognized compensation expense related to amending these awards and we expect to recognize the expense over a weighted average period of 0.4 years. The total fair value on the vesting date of nonvested shares, share units or DEUs that vested was $17.3 million and $18.4 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, there was $21.2 million of total unrecognized compensation expense related to nonvested shares or share units outstanding at September 30, 2022 and we expect to recognize the expense over a weighted average period of 2.1 years. Employees have the option to tender shares to Essent Group to pay the minimum employee statutory withholding taxes associated with shares upon vesting. Common shares tendered by employees to pay employee withholding taxes totaled 129,965 in the nine months ended September 30, 2022. The tendered shares were recorded at cost and included in treasury stock. All treasury stock has been cancelled as of September 30, 2022. Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Compensation expense $ 4,702 $ 5,511 $ 13,707 $ 16,075 Income tax benefit 930 1,111 2,715 3,156 |
Dividend Restrictions
Dividend Restrictions | 9 Months Ended |
Sep. 30, 2022 | |
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments [Abstract] | |
Dividends Restrictions | Dividends Restrictions Our U.S. insurance subsidiaries are subject to certain capital and dividend rules and regulations as prescribed by jurisdictions in which they are authorized to operate. Under the insurance laws of the Commonwealth of Pennsylvania, Essent Guaranty and Essent PA may pay ordinary dividends during any 12-month period in an amount equal to the greater of (i) 10% of the preceding year-end statutory policyholders' surplus or (ii) the preceding year's statutory net income. The Pennsylvania statute also specifies that dividends and other distributions can be paid out of positive unassigned surplus without prior approval. At September 30, 2022, Essent Guaranty had unassigned surplus of approximately $318.1 million and Essent PA had unassigned surplus of approximately $18.5 million. In the three and nine months ended September 30, 2022, Essent Guaranty paid dividends of $60.0 million and $260.0 million, respectively, to its parent, Essent US Holdings, Inc. Essent Guaranty paid dividends of $47.2 million and $147.2 million to its parent, Essent US Holdings, Inc. in the three and nine months ended September 30, 2021. Essent PA did not pay a dividend in the three and nine months ended September 30, 2022 or 2021. As of September 30, 2022, Essent Guaranty and Essent PA could pay additional ordinary dividends in 2022 of $237.7 million and $5.6 million, respectively. Essent Re is subject to certain dividend restrictions as prescribed by the Bermuda Monetary Authority and under certain agreements with counterparties. In connection with the quota share reinsurance agreement with Essent Guaranty, Essent Re has agreed to maintain a minimum total equity of $100 million. As of September 30, 2022, Essent Re had total equity of $1.4 billion. At September 30, 2022, our insurance subsidiaries were in compliance with these rules, regulations and agreements. |
Earnings per Share (EPS)
Earnings per Share (EPS) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share (EPS) | Earnings per Share (EPS) The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share: Three Months Ended Nine Months Ended (In thousands, except per share amounts) 2022 2021 2022 2021 Net income $ 178,051 $ 205,353 $ 683,987 $ 500,796 Basic weighted average shares outstanding 106,870 111,001 107,314 111,708 Dilutive effect of nonvested shares 467 386 418 362 Diluted weighted average shares outstanding 107,337 111,387 107,732 112,070 Basic earnings per share $ 1.67 $ 1.85 $ 6.37 $ 4.48 Diluted earnings per share $ 1.66 $ 1.84 $ 6.35 $ 4.47 There were 10,417 and 181,476 antidilutive shares for the three months ended September 30, 2022 and 2021, respectively, and 90,413 and 230,595 antidilutive shares for the nine months ended September 30, 2022 and 2021, respectively. The nonvested performance-based share awards are considered contingently issuable for purposes of the EPS calculation. Based on the compounded annual book value per share growth and relative total shareholder return as of September 30, 2022, the 2022 performance-based share awards would be issuable at 146% of target under the terms of the arrangements if September 30, 2022 was the end of the contingency period, which is 73% of the shares issued and the 2021 performance-based share awards would be issuable at 100% of target under the terms of the arrangements if September 30, 2022 was the end of the contingency period, which is 50% of the shares issued. Based on the compounded annual book value per share growth and relative total shareholder return as of September 30, 2021, the 2021 performance-based share awards would be issuable at 100% of target under the terms of the arrangements if September 30, 2021 was the end of the contingency period, which is 50% of the shares issued. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents the rollforward of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 2021 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (332,126) $ 45,559 $ (286,567) $ 143,136 $ (27,705) $ 115,431 Other comprehensive income (loss): Unrealized holding gains (losses) on investments: Unrealized holding gains (losses) arising during the period (158,835) 21,899 (136,936) (45,295) 8,548 (36,747) Less: Reclassification adjustment for losses included in net income (1) (175) 101 (74) (221) 51 (170) Net unrealized losses on investments (159,010) 22,000 (137,010) (45,516) 8,599 (36,917) Other comprehensive loss (159,010) 22,000 (137,010) (45,516) 8,599 (36,917) Balance at end of period $ (491,136) $ 67,559 $ (423,577) $ 97,620 $ (19,106) $ 78,514 Nine Months Ended September 30, 2022 2021 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of year $ 65,280 $ (14,573) $ 50,707 $ 168,324 $ (30,050) $ 138,274 Other comprehensive income (loss): Unrealized holding gains (losses) on investments: Unrealized holding losses arising during the period (564,064) 81,051 (483,013) (70,095) 10,923 (59,172) Less: Reclassification adjustment for losses (gains) included in net income (1) 7,648 1,081 8,729 (609) 21 (588) Net unrealized (losses) gains on investments (556,416) 82,132 (474,284) (70,704) 10,944 (59,760) Other comprehensive (loss) income (556,416) 82,132 (474,284) (70,704) 10,944 (59,760) Balance at end of period $ (491,136) $ 67,559 $ (423,577) $ 97,620 $ (19,106) $ 78,514 (1) Included in net realized investment gains (losses) on our condensed consolidated statements of comprehensive income. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We carry certain of our financial instruments at fair value. We define fair value as the current amount that would be exchanged to sell an asset or transfer a liability, other than in a forced liquidation. Fair Value Hierarchy ASC No. 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The level within the fair value hierarchy to measure the financial instrument shall be determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: • Level 1 — Quoted prices for identical instruments in active markets accessible at the measurement date. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and valuations in which all significant inputs are observable in active markets. Inputs are observable for substantially the full term of the financial instrument. • Level 3 — Valuations derived from one or more significant inputs that are unobservable. Determination of Fair Value When available, we generally use quoted market prices to determine fair value and classify the financial instrument in Level 1. In cases where quoted market prices for similar financial instruments are available, we utilize these inputs for valuation techniques and classify the financial instrument in Level 2. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flows, present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows and we classify the financial instrument in Level 3. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. We used the following methods and assumptions in estimating fair values of financial instruments: • Investments available for sale — Investments available for sale are valued using quoted market prices in active markets, when available, and those investments are classified as Level 1 of the fair value hierarchy. Level 1 investments available for sale include investments such as U.S. Treasury securities and money market funds. Investments available for sale are classified as Level 2 of the fair value hierarchy if quoted market prices are not available and fair values are estimated using quoted prices of similar securities or recently executed transactions for the securities. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities, corporate debt securities, residential and commercial mortgage securities and asset-backed securities are classified as Level 2 investments. We use independent pricing sources to determine the fair value of securities available for sale in Level 1 and Level 2 of the fair value hierarchy. We use one primary pricing service to provide individual security pricing based on observable market data and receive one quote per security. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing service and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities and corporate debt securities are valued by our primary vendor using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves and credit risk. Residential and commercial mortgage securities and asset-backed securities are valued by our primary vendor using proprietary models based on observable inputs, such as interest rate spreads, prepayment speeds and credit risk. As part of our evaluation of investment prices provided by our primary pricing service, we obtained and reviewed their pricing methodologies which include a description of how each security type is evaluated and priced. We review the reasonableness of prices received from our primary pricing service by comparison to prices obtained from additional pricing sources. We have not made any adjustments to the prices obtained from our primary pricing service. Assets and Liabilities Measured at Fair Value All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis. September 30, 2022 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 535,636 $ — $ — $ 535,636 U.S. agency securities — — — — U.S. agency mortgage-backed securities — 752,236 — 752,236 Municipal debt securities — 559,784 — 559,784 Non-U.S. government securities — 60,834 — 60,834 Corporate debt securities — 1,345,269 — 1,345,269 Residential and commercial mortgage securities — 523,608 — 523,608 Asset-backed securities — 608,330 — 608,330 Money market funds 199,147 — — 199,147 Total assets at fair value (1) (2) $ 734,783 $ 3,850,061 $ — $ 4,584,844 December 31, 2021 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 448,793 $ — $ — $ 448,793 U.S. agency securities — 5,504 — 5,504 U.S. agency mortgage-backed securities — 1,008,863 — 1,008,863 Municipal debt securities — 627,599 — 627,599 Non-U.S. government securities — 79,743 — 79,743 Corporate debt securities — 1,455,247 — 1,455,247 Residential and commercial mortgage securities — 545,423 — 545,423 Asset-backed securities — 581,703 — 581,703 Money market funds 210,012 — — 210,012 Total assets at fair value (1) (2) $ 658,805 $ 4,304,082 $ — $ 4,962,887 (1) Does not include the fair value of embedded derivatives, which we have accounted for separately as freestanding derivatives and included in other assets or other accrued liabilities in our condensed consolidated balance sheet. See Note 4 for more information. (2) Does not include certain other invested assets that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, as applicable accounting standards do not provide for classification within the fair value hierarchy. |
Statutory Accounting
Statutory Accounting | 9 Months Ended |
Sep. 30, 2022 | |
Insurance [Abstract] | |
Statutory Accounting | Statutory Accounting Our U.S. insurance subsidiaries prepare statutory-basis financial statements in accordance with the accounting practices prescribed or permitted by their respective state’s department of insurance, which is a comprehensive basis of accounting other than GAAP. We did not use any prescribed or permitted statutory accounting practices (individually or in the aggregate) that resulted in reported statutory surplus or capital that was significantly different from the statutory surplus or capital that would have been reported had National Association of Insurance Commissioners’ statutory accounting practices been followed. The following table presents Essent Guaranty’s and Essent PA’s statutory net income, statutory surplus and contingency reserve liability as of and for the nine months ended September 30: (In thousands) 2022 2021 Essent Guaranty Statutory net income $ 479,389 $ 364,654 Statutory surplus 1,023,440 1,082,334 Contingency reserve liability 1,990,536 1,721,424 Essent PA Statutory net income $ 1,179 $ 2,623 Statutory surplus 57,489 55,779 Contingency reserve liability 57,189 57,205 Net income determined in accordance with statutory accounting practices differs from GAAP. In 2022 and 2021, the more significant differences between net income determined under statutory accounting practices and GAAP for Essent Guaranty and Essent PA relate to policy acquisition costs and income taxes. Under statutory accounting practices, policy acquisition costs are expensed as incurred while such costs are capitalized and amortized to expense over the life of the policy under GAAP. We are eligible for a tax deduction, subject to certain limitations for amounts required by state law or regulation to be set aside in statutory contingency reserves when we purchase non-interest-bearing United States Mortgage Guaranty Tax and Loss Bonds (“T&L Bonds”) issued by the Treasury Department. Under statutory accounting practices, this deduction reduces the tax provision recorded by Essent Guaranty and Essent PA and, as a result, increases statutory net income and surplus as compared to net income and equity determined in accordance with GAAP. At September 30, 2022 and 2021, the statutory capital of our U.S. insurance subsidiaries, which is defined as the total of statutory surplus and contingency reserves, was in excess of the statutory capital necessary to satisfy their regulatory requirements. Effective December 31, 2015, Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, implemented new coordinated Private Mortgage Insurer Eligibility Requirements, which we refer to as the "PMIERs." The PMIERs represent the standards by which private mortgage insurers are eligible to provide mortgage insurance on loans owned or guaranteed by Fannie Mae and Freddie Mac. The PMIERs include financial strength requirements incorporating a risk-based framework that require approved insurers to have a sufficient level of liquid assets from which to pay claims. The PMIERs also include enhanced operational performance expectations and define remedial actions that apply should an approved insurer fail to comply with these requirements. In 2018, the GSEs released revised PMIERs framework ("PMIERs 2.0") which became effective on March 31, 2019. As of September 30, 2022, Essent Guaranty, our GSE-approved mortgage insurance company, was in compliance with PMIERs 2.0. Statement of Statutory Accounting Principles No. 58, Mortgage Guaranty Insurance, requires mortgage insurers to establish a special contingency reserve for statutory accounting purposes included in total liabilities equal to 50% of earned premium for that year. During the nine months ended September 30, 2022, Essent Guaranty increased its contingency reserve by $209.6 million and Essent PA increased its contingency reserve by $0.7 million. This reserve is required to be maintained for a period of 120 months to protect against the effects of adverse economic cycles. After 120 months, the reserve is released to unassigned funds. In the event an insurer’s loss ratio in any calendar year exceeds 35%, however, the insurer may, after regulatory approval, release from its contingency reserves an amount equal to the excess portion of such losses. During the nine months ended September 30, 2022 and 2021, Essent Guaranty released contingency reserves of $11.8 million and $2.0 million, respectively, and Essent PA released contingency reserves of $0.9 million and $0.1 million, respectively, to unassigned funds upon completion of the 120 month holding period. Under The Insurance Act 1978, as amended, and related regulations of Bermuda (the "Insurance Act"), Essent Re is required to annually prepare statutory financial statements and a statutory financial return in accordance with the financial reporting provisions of the Insurance Act, which is a basis other than GAAP. The Insurance Act also requires that Essent Re maintain minimum share capital of $1 million and must ensure that the value of its general business assets exceeds the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margins and enhanced capital requirement pertaining to its general business. At December 31, 2021, all such requirements were met. |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Accounting Standards Not Yet Adopted | Accounting Standards Not Yet Adopted In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments in this update provide temporary optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. It provides optional expedients and exceptions for applying generally accepted accounting principles to contract, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. The adoption of, and future elections under, this ASU are not expected to have a material impact on our consolidated financial statements as the ASU will ease, if warranted, the requirements for accounting for the future effects of the rate reform. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts and other transactions. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . This update clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. The update clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. The update also requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The adoption of this ASU is not expected to have a material effect on the Company's consolidated operating results or financial position. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments Available for Sale | Investments available for sale consist of the following: September 30, 2022 (In thousands) Amortized Unrealized Unrealized Fair U.S. Treasury securities $ 566,466 $ 2 $ (30,832) $ 535,636 U.S. agency securities — — — — U.S. agency mortgage-backed securities 879,028 — (126,792) 752,236 Municipal debt securities (1) 627,772 95 (68,083) 559,784 Non-U.S. government securities 70,126 — (9,292) 60,834 Corporate debt securities (2) 1,501,150 7 (155,888) 1,345,269 Residential and commercial mortgage securities 586,771 123 (63,286) 523,608 Asset-backed securities 645,522 15 (37,207) 608,330 Money market funds 199,147 — — 199,147 Total investments available for sale $ 5,075,982 $ 242 $ (491,380) $ 4,584,844 December 31, 2021 (In thousands) Amortized Unrealized Unrealized Fair U.S. Treasury securities $ 447,926 $ 3,833 $ (2,966) $ 448,793 U.S. agency securities 5,501 3 — 5,504 U.S. agency mortgage-backed securities 1,005,611 13,365 (10,113) 1,008,863 Municipal debt securities (1) 598,764 30,122 (1,287) 627,599 Non-U.S. government securities 77,366 3,232 (855) 79,743 Corporate debt securities (2) 1,428,645 36,067 (9,465) 1,455,247 Residential and commercial mortgage securities 541,638 10,452 (6,667) 545,423 Asset-backed securities 582,144 1,673 (2,114) 581,703 Money market funds 210,012 — — 210,012 Total investments available for sale $ 4,897,607 $ 98,747 $ (33,467) $ 4,962,887 September 30, December 31, (1) The following table summarizes municipal debt securities as of: 2022 2021 Special revenue bonds 78.5 % 77.1 % General obligation bonds 21.5 20.5 Certificate of participation bonds — 1.9 Tax allocation bonds — 0.5 Total 100.0 % 100.0 % September 30, December 31, (2) The following table summarizes corporate debt securities as of: 2022 2021 Financial 39.4 % 33.7 % Consumer, non-cyclical 17.5 19.8 Communications 8.8 11.4 Industrial 6.8 7.0 Consumer, cyclical 7.2 7.0 Energy 6.6 6.0 Technology 5.6 6.8 Utilities 6.1 4.6 Basic materials 2.0 3.7 Total 100.0 % 100.0 % |
Schedule of Amortized Cost and Fair Value of Investments Available for Sale by Contractual Maturity | The amortized cost and fair value of investments available for sale at September 30, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. (In thousands) Amortized Fair U.S. Treasury securities: Due in 1 year $ 169,120 $ 167,667 Due after 1 but within 5 years 353,483 330,053 Due after 5 but within 10 years 38,835 34,103 Due after 10 years 5,028 3,813 Subtotal 566,466 535,636 U.S. agency securities: Due in 1 year — — Due after 1 but within 5 years — — Subtotal — — Municipal debt securities: Due in 1 year 6,992 6,943 Due after 1 but within 5 years 141,922 137,108 Due after 5 but within 10 years 164,538 151,508 Due after 10 years 314,320 264,225 Subtotal 627,772 559,784 Non-U.S. government securities: Due in 1 year 10,452 10,396 Due after 1 but within 5 years 27,362 25,697 Due after 5 but within 10 years 8,893 7,979 Due after 10 years 23,419 16,762 Subtotal 70,126 60,834 Corporate debt securities: Due in 1 year 235,975 233,177 Due after 1 but within 5 years 696,023 657,186 Due after 5 but within 10 years 419,294 345,569 Due after 10 years 149,858 109,337 Subtotal 1,501,150 1,345,269 U.S. agency mortgage-backed securities 879,028 752,236 Residential and commercial mortgage securities 586,771 523,608 Asset-backed securities 645,522 608,330 Money market funds 199,147 199,147 Total investments available for sale $ 5,075,982 $ 4,584,844 |
Schedule of Realized Gross Gains and Losses on Sale of Investments Available for Sale | The components of realized investment (losses) gains, net on the condensed consolidated statements of comprehensive income were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Realized gross gains $ 1,650 $ 654 $ 14,397 $ 1,422 Realized gross losses (1,370) (433) (14,634) (813) Impairment loss (105) — (7,411) — |
Schedule of Fair Value of Investments in an Unrealized Loss Position and Related Unrealized Losses | The fair value of investments available for sale in an unrealized loss position and the related unrealized losses for which no allowance for credit loss has been recorded were as follows: Less than 12 months 12 months or more Total September 30, 2022 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 361,655 $ (15,490) $ 161,968 $ (15,342) $ 523,623 $ (30,832) U.S. agency mortgage-backed securities 508,415 (74,350) 243,821 (52,442) 752,236 (126,792) Municipal debt securities 527,796 (64,097) 14,588 (3,986) 542,384 (68,083) Non-U.S. government securities 51,784 (5,922) 9,050 (3,370) 60,834 (9,292) Corporate debt securities 1,166,786 (127,688) 143,745 (28,200) 1,310,531 (155,888) Residential and commercial mortgage securities 376,356 (38,046) 143,118 (25,240) 519,474 (63,286) Asset-backed securities 481,105 (27,029) 122,339 (10,178) 603,444 (37,207) Total $ 3,473,897 $ (352,622) $ 838,629 $ (138,758) $ 4,312,526 $ (491,380) Less than 12 months 12 months or more Total December 31, 2021 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 207,122 $ (2,170) $ 28,012 $ (796) $ 235,134 $ (2,966) U.S. agency mortgage-backed securities 582,108 (9,414) 26,131 (699) 608,239 (10,113) Municipal debt securities 91,719 (1,281) 312 (6) 92,031 (1,287) Non-U.S. government securities 22,986 (855) — — 22,986 (855) Corporate debt securities 522,120 (7,200) 46,875 (2,265) 568,995 (9,465) Residential and commercial mortgage securities 268,617 (5,200) 38,256 (1,467) 306,873 (6,667) Asset-backed securities 339,137 (1,954) 13,101 (160) 352,238 (2,114) Total $ 2,033,809 $ (28,074) $ 152,687 $ (5,393) $ 2,186,496 $ (33,467) |
Schedule of Net Investment Income | Net investment income consists of: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Fixed maturities $ 33,948 $ 23,001 $ 91,245 $ 69,037 Short-term investments 872 30 1,132 158 Gross investment income 34,820 23,031 92,377 69,195 Investment expenses (2,226) (1,458) (5,764) (4,091) Net investment income $ 32,594 $ 21,573 $ 86,613 $ 65,104 |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
Schedule of Effect of Reinsurance | The effect of reinsurance on net premiums written and earned is as follows: Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Net premiums written: Direct $ 239,773 $ 229,228 $ 692,687 $ 693,434 Ceded (1) (30,543) (26,880) (73,384) (84,438) Net premiums written $ 209,230 $ 202,348 $ 619,303 $ 608,996 Net premiums earned: Direct $ 238,477 $ 245,598 $ 708,659 $ 739,660 Ceded (1) (30,543) (26,880) (73,384) (84,438) Net premiums earned $ 207,934 $ 218,718 $ 635,275 $ 655,222 (1) Net of profit commission. |
Schedule of Coverages and Retentions | The following table summarizes Essent Guaranty's excess of loss reinsurance agreements as of September 30, 2022: Vintage Year Reinsurer Effective Date Optional Termination Date 2015 & 2016 Radnor Re 2019-2 Ltd. June 20, 2019 June 25, 2024 2017 Radnor Re 2018-1 Ltd. March 22, 2018 March 25, 2023 (1) 2017 Panel of Reinsurers November 1, 2018 October 1, 2023 (2) 2018 Radnor Re 2019-1 Ltd. February 28, 2019 February 25, 2026 2018 Panel of Reinsurers February 28, 2019 February 25, 2026 2019 Radnor Re 2020-1 Ltd. January 30, 2020 January 25, 2027 2019 Panel of Reinsurers January 30, 2020 January 25, 2027 2020 & 2021 Radnor Re 2021-1 Ltd. June 23, 2021 June 26, 2028 2021 Radnor Re 2021-2 Ltd. November 10, 2021 November 25, 2027 2021 & 2022 Panel of Reinsurers June 1, 2022 January 1, 2030 2021 & 2022 Radnor Re 2022-1 Ltd. September 21, 2022 September 25, 2028 (1) If the reinsurance agreement is not terminated at the optional termination date, the risk margin component of the reinsurance premium increases by 50%. (2) If the reinsurance agreement is not terminated at the optional termination date, the reinsurance premium increases by 50%. The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions as of September 30, 2022: (In thousands) Remaining Vintage Year Remaining Remaining ILN Other Reinsurance Total Remaining 2015 & 2016 $ 6,415,924 $ 1,740,167 $ 61,478 $ — $ 61,478 $ 206,925 2017 6,129,801 1,610,026 242,123 127,770 (6) 369,893 216,632 2018 6,961,516 1,791,216 325,537 76,144 (7) 401,681 248,875 2019 (3) 8,578,642 2,203,474 448,805 49,870 (8) 498,675 214,874 2020 & 2021 (4) 43,021,732 10,731,139 486,933 — 486,933 278,919 2021 (5) 42,367,258 11,236,549 423,462 — 423,462 279,415 2021 & 2022 (9) 63,515,812 17,043,854 — 119,307 119,307 426,096 2021 & 2022 (10) 34,325,434 9,205,630 237,868 — 237,868 303,761 Total $ 211,316,119 $ 55,562,055 $ 2,226,206 $ 373,091 $ 2,599,297 $ 1,940,960 (11) (3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019. (4) Reinsurance coverage on new insurance written from August 1, 2020 through March 31, 2021. (5) Reinsurance coverage on new insurance written from April 1, 2021 through September 30, 2021. (6) Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd. (7) Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd. (8) Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd. (9) Reinsurance coverage on new insurance written from October 1, 2021 through December 31, 2022. (10) Reinsurance coverage on new insurance written from October 1, 2021 through July 31, 2022. |
Schedule of VIE Assets and Maximum Exposure | The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivative, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our condensed consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trust, each as of September 30, 2022: Maximum Exposure to Loss (In thousands) Total VIE Assets On - Balance Sheet Off - Balance Sheet Total Radnor Re 2018-1 Ltd. $ 242,123 $ 369 $ 25 $ 394 Radnor Re 2019-1 Ltd. 325,537 (1,884) 59 (1,825) Radnor Re 2019-2 Ltd. 61,478 (1,474) 1 (1,473) Radnor Re 2020-1 Ltd. 448,805 (1,098) 78 (1,020) Radnor Re 2021-1 Ltd. 486,933 (1,882) 136 (1,746) Radnor Re 2021-2 Ltd. 423,462 1,033 220 1,253 Radnor Re 2022-1 Ltd. 237,868 504 49 $ 553 Total $ 2,226,206 $ (4,432) $ 568 $ (3,864) |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
Schedule of Reconciliation of Beginning and Ending Reserve Balances for Losses and Loss Adjustment Expenses (LAE) | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“LAE”) for the nine months ended September 30: (In thousands) 2022 2021 Reserve for losses and LAE at beginning of period $ 407,445 $ 374,941 Less: Reinsurance recoverables 25,940 19,061 Net reserve for losses and LAE at beginning of period 381,505 355,880 Add provision for losses and LAE, net of reinsurance, occurring in: Current period 63,236 83,973 Prior years (242,041) (49,483) Net incurred losses and LAE during the current period (178,805) 34,490 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current period 111 231 Prior years 3,339 4,153 Net loss and LAE payments during the current period 3,450 4,384 Net reserve for losses and LAE at end of period 199,250 385,986 Plus: Reinsurance recoverables 13,244 26,970 Reserve for losses and LAE at end of period $ 212,494 $ 412,956 |
Capital Stock (Tables)
Capital Stock (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Dividends Declared and Paid Per Common Share | The following table presents the amounts declared and paid per common share each quarter: Quarter Ended 2021 March 31 $ 0.16 June 30 0.17 September 30 0.18 December 31 0.19 Total dividends per common share declared and paid $ 0.70 Quarter Ended 2022 March 31 $ 0.20 June 30 0.21 September 30 0.22 Total dividends per common share declared and paid $ 0.63 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Nonvested Common Share and Nonvested Common Share Unit Activity | The following table summarizes nonvested common share, nonvested common share unit and DEU activity for the nine months ended September 30, 2022: Time and Performance- Time-Based Share Units DEUs (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Dividend Equivalent Units Weighted Outstanding at beginning of year 500 $ 31.29 140 $ 45.31 461 $ 47.94 28 $ 41.75 Granted 308 14.83 87 46.15 161 42.65 18 41.10 Vested (139) 45.32 (69) 44.86 (178) 47.87 (13) 41.28 Forfeited — N/A — N/A (79) 48.71 (2) 42.70 Outstanding at September 30, 2022 669 $ 21.04 158 $ 45.97 365 $ 45.43 31 $ 41.53 |
Schedule of Portion of Nonvested Shares Earned Based Upon Achievement of Compounded Annual Book Value Per Share Growth | The portion of these nonvested performance-based share awards that will be earned is as follows: Relative Total Shareholder Return ≤25th percentile 50th percentile ≥75th percentile Three-Year Book 13% "Target" 100 % 150 % 200 % 11% 75 % 125 % 175 % 9% 50 % 100 % 150 % 7% 25 % 75 % 125 % 5% 0 % 50 % 100 % |
Schedule of Compensation Expense, Net of Forfeitures, and Related Tax Effects Recognized in Connection with Nonvested Shares | Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Compensation expense $ 4,702 $ 5,511 $ 13,707 $ 16,075 Income tax benefit 930 1,111 2,715 3,156 |
Earnings per Share (EPS) (Table
Earnings per Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Net Income and Weighted Average Common Shares Outstanding Used in Computations of Basic and Diluted Earnings Per Common Share | The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share: Three Months Ended Nine Months Ended (In thousands, except per share amounts) 2022 2021 2022 2021 Net income $ 178,051 $ 205,353 $ 683,987 $ 500,796 Basic weighted average shares outstanding 106,870 111,001 107,314 111,708 Dilutive effect of nonvested shares 467 386 418 362 Diluted weighted average shares outstanding 107,337 111,387 107,732 112,070 Basic earnings per share $ 1.67 $ 1.85 $ 6.37 $ 4.48 Diluted earnings per share $ 1.66 $ 1.84 $ 6.35 $ 4.47 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Rollforward of Accumulated Other Comprehensive Income (Loss) | The following table presents the rollforward of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, 2022 2021 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (332,126) $ 45,559 $ (286,567) $ 143,136 $ (27,705) $ 115,431 Other comprehensive income (loss): Unrealized holding gains (losses) on investments: Unrealized holding gains (losses) arising during the period (158,835) 21,899 (136,936) (45,295) 8,548 (36,747) Less: Reclassification adjustment for losses included in net income (1) (175) 101 (74) (221) 51 (170) Net unrealized losses on investments (159,010) 22,000 (137,010) (45,516) 8,599 (36,917) Other comprehensive loss (159,010) 22,000 (137,010) (45,516) 8,599 (36,917) Balance at end of period $ (491,136) $ 67,559 $ (423,577) $ 97,620 $ (19,106) $ 78,514 Nine Months Ended September 30, 2022 2021 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of year $ 65,280 $ (14,573) $ 50,707 $ 168,324 $ (30,050) $ 138,274 Other comprehensive income (loss): Unrealized holding gains (losses) on investments: Unrealized holding losses arising during the period (564,064) 81,051 (483,013) (70,095) 10,923 (59,172) Less: Reclassification adjustment for losses (gains) included in net income (1) 7,648 1,081 8,729 (609) 21 (588) Net unrealized (losses) gains on investments (556,416) 82,132 (474,284) (70,704) 10,944 (59,760) Other comprehensive (loss) income (556,416) 82,132 (474,284) (70,704) 10,944 (59,760) Balance at end of period $ (491,136) $ 67,559 $ (423,577) $ 97,620 $ (19,106) $ 78,514 (1) Included in net realized investment gains (losses) on our condensed consolidated statements of comprehensive income. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Vale on a Recurring Basis | All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis. September 30, 2022 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 535,636 $ — $ — $ 535,636 U.S. agency securities — — — — U.S. agency mortgage-backed securities — 752,236 — 752,236 Municipal debt securities — 559,784 — 559,784 Non-U.S. government securities — 60,834 — 60,834 Corporate debt securities — 1,345,269 — 1,345,269 Residential and commercial mortgage securities — 523,608 — 523,608 Asset-backed securities — 608,330 — 608,330 Money market funds 199,147 — — 199,147 Total assets at fair value (1) (2) $ 734,783 $ 3,850,061 $ — $ 4,584,844 December 31, 2021 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 448,793 $ — $ — $ 448,793 U.S. agency securities — 5,504 — 5,504 U.S. agency mortgage-backed securities — 1,008,863 — 1,008,863 Municipal debt securities — 627,599 — 627,599 Non-U.S. government securities — 79,743 — 79,743 Corporate debt securities — 1,455,247 — 1,455,247 Residential and commercial mortgage securities — 545,423 — 545,423 Asset-backed securities — 581,703 — 581,703 Money market funds 210,012 — — 210,012 Total assets at fair value (1) (2) $ 658,805 $ 4,304,082 $ — $ 4,962,887 (1) Does not include the fair value of embedded derivatives, which we have accounted for separately as freestanding derivatives and included in other assets or other accrued liabilities in our condensed consolidated balance sheet. See Note 4 for more information. (2) Does not include certain other invested assets that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, as applicable accounting standards do not provide for classification within the fair value hierarchy. |
Statutory Accounting (Tables)
Statutory Accounting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Insurance [Abstract] | |
Schedule of Statutory Net Income, Statutory Surplus and Contingency Reserve Liability | The following table presents Essent Guaranty’s and Essent PA’s statutory net income, statutory surplus and contingency reserve liability as of and for the nine months ended September 30: (In thousands) 2022 2021 Essent Guaranty Statutory net income $ 479,389 $ 364,654 Statutory surplus 1,023,440 1,082,334 Contingency reserve liability 1,990,536 1,721,424 Essent PA Statutory net income $ 1,179 $ 2,623 Statutory surplus 57,489 55,779 Contingency reserve liability 57,189 57,205 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) - state | 9 Months Ended | |||
Jan. 01, 2021 | Dec. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2022 | |
Affiliated Entity | Essent Guaranty | ||||
Insurance Premium Revenue Recognition | ||||
Number of states in which the entity is licensed to write mortgage insurance | 50 | |||
Affiliated Entity | Essent Re | Quota share reinsurance | ||||
Insurance Premium Revenue Recognition | ||||
Reinsurance percentage | 35% | 25% | ||
Affiliated Entity | Essent PA | Reinsurance for mortgage insurance coverage in excess of 25% | ||||
Insurance Premium Revenue Recognition | ||||
Reinsurance for mortgage insurance coverage threshold (in excess of) | 25% | |||
Maximum | ||||
Insurance Premium Revenue Recognition | ||||
Residential mortgage down payment percentage for which mortgage insurance is generally required (less than) | 20% |
Investments - Schedule of Inves
Investments - Schedule of Investments Available for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investments available for sale | ||
Amortized Cost | $ 5,075,982 | $ 4,897,607 |
Unrealized Gains | 242 | 98,747 |
Unrealized Losses | (491,380) | (33,467) |
Fair Value | 4,584,844 | 4,962,887 |
U.S. Treasury securities | ||
Investments available for sale | ||
Amortized Cost | 566,466 | 447,926 |
Unrealized Gains | 2 | 3,833 |
Unrealized Losses | (30,832) | (2,966) |
Fair Value | 535,636 | 448,793 |
U.S. agency securities | ||
Investments available for sale | ||
Amortized Cost | 0 | 5,501 |
Unrealized Gains | 0 | 3 |
Unrealized Losses | 0 | 0 |
Fair Value | 0 | 5,504 |
U.S. agency mortgage-backed securities | ||
Investments available for sale | ||
Amortized Cost | 879,028 | 1,005,611 |
Unrealized Gains | 0 | 13,365 |
Unrealized Losses | (126,792) | (10,113) |
Fair Value | 752,236 | 1,008,863 |
Municipal debt securities | ||
Investments available for sale | ||
Amortized Cost | 627,772 | 598,764 |
Unrealized Gains | 95 | 30,122 |
Unrealized Losses | (68,083) | (1,287) |
Fair Value | 559,784 | 627,599 |
Non-U.S. government securities | ||
Investments available for sale | ||
Amortized Cost | 70,126 | 77,366 |
Unrealized Gains | 0 | 3,232 |
Unrealized Losses | (9,292) | (855) |
Fair Value | 60,834 | 79,743 |
Corporate debt securities | ||
Investments available for sale | ||
Amortized Cost | 1,501,150 | 1,428,645 |
Unrealized Gains | 7 | 36,067 |
Unrealized Losses | (155,888) | (9,465) |
Fair Value | 1,345,269 | 1,455,247 |
Residential and commercial mortgage securities | ||
Investments available for sale | ||
Amortized Cost | 586,771 | 541,638 |
Unrealized Gains | 123 | 10,452 |
Unrealized Losses | (63,286) | (6,667) |
Fair Value | 523,608 | 545,423 |
Asset-backed securities | ||
Investments available for sale | ||
Amortized Cost | 645,522 | 582,144 |
Unrealized Gains | 15 | 1,673 |
Unrealized Losses | (37,207) | (2,114) |
Fair Value | 608,330 | 581,703 |
Money market funds | ||
Investments available for sale | ||
Amortized Cost | 199,147 | 210,012 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 199,147 | $ 210,012 |
Investments - Summary of Munici
Investments - Summary of Municipal Debt Securities and Corporate Debt Securities (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 100% | 100% |
Municipal debt securities | Special revenue bonds | ||
Investments available for sale | ||
Percentage of debt securities | 78.50% | 77.10% |
Municipal debt securities | General obligation bonds | ||
Investments available for sale | ||
Percentage of debt securities | 21.50% | 20.50% |
Municipal debt securities | Certificate of participation bonds | ||
Investments available for sale | ||
Percentage of debt securities | 0% | 1.90% |
Municipal debt securities | Tax allocation bonds | ||
Investments available for sale | ||
Percentage of debt securities | 0% | 0.50% |
Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 100% | 100% |
Corporate debt securities | Financial | ||
Investments available for sale | ||
Percentage of debt securities | 39.40% | 33.70% |
Corporate debt securities | Consumer, non-cyclical | ||
Investments available for sale | ||
Percentage of debt securities | 17.50% | 19.80% |
Corporate debt securities | Communications | ||
Investments available for sale | ||
Percentage of debt securities | 8.80% | 11.40% |
Corporate debt securities | Industrial | ||
Investments available for sale | ||
Percentage of debt securities | 6.80% | 7% |
Corporate debt securities | Consumer, cyclical | ||
Investments available for sale | ||
Percentage of debt securities | 7.20% | 7% |
Corporate debt securities | Energy | ||
Investments available for sale | ||
Percentage of debt securities | 6.60% | 6% |
Corporate debt securities | Technology | ||
Investments available for sale | ||
Percentage of debt securities | 5.60% | 6.80% |
Corporate debt securities | Utilities | ||
Investments available for sale | ||
Percentage of debt securities | 6.10% | 4.60% |
Corporate debt securities | Basic materials | ||
Investments available for sale | ||
Percentage of debt securities | 2% | 3.70% |
Investments - Schedule of Amort
Investments - Schedule of Amortized Cost and Fair Value of Investments Available for Sale by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Amortized Cost | $ 5,075,982 | $ 4,897,607 |
Fair Value | ||
Fair Value | 4,584,844 | 4,962,887 |
U.S. Treasury securities | ||
Amortized Cost | ||
Due in 1 year | 169,120 | |
Due after 1 but within 5 years | 353,483 | |
Due after 5 but within 10 years | 38,835 | |
Due after 10 years | 5,028 | |
Subtotal | 566,466 | |
Amortized Cost | 566,466 | 447,926 |
Fair Value | ||
Due in 1 year | 167,667 | |
Due after 1 but within 5 years | 330,053 | |
Due after 5 but within 10 years | 34,103 | |
Due after 10 years | 3,813 | |
Subtotal | 535,636 | |
U.S. agency securities | ||
Amortized Cost | ||
Due in 1 year | 0 | |
Due after 1 but within 5 years | 0 | |
Subtotal | 0 | |
Amortized Cost | 0 | 5,501 |
Fair Value | ||
Due in 1 year | 0 | |
Due after 1 but within 5 years | 0 | |
Subtotal | 0 | |
Municipal debt securities | ||
Amortized Cost | ||
Due in 1 year | 6,992 | |
Due after 1 but within 5 years | 141,922 | |
Due after 5 but within 10 years | 164,538 | |
Due after 10 years | 314,320 | |
Subtotal | 627,772 | |
Amortized Cost | 627,772 | 598,764 |
Fair Value | ||
Due in 1 year | 6,943 | |
Due after 1 but within 5 years | 137,108 | |
Due after 5 but within 10 years | 151,508 | |
Due after 10 years | 264,225 | |
Subtotal | 559,784 | |
Non-U.S. government securities: | ||
Amortized Cost | ||
Due in 1 year | 10,452 | |
Due after 1 but within 5 years | 27,362 | |
Due after 5 but within 10 years | 8,893 | |
Due after 10 years | 23,419 | |
Subtotal | 70,126 | |
Amortized Cost | 70,126 | 77,366 |
Fair Value | ||
Due in 1 year | 10,396 | |
Due after 1 but within 5 years | 25,697 | |
Due after 5 but within 10 years | 7,979 | |
Due after 10 years | 16,762 | |
Subtotal | 60,834 | |
Corporate debt securities | ||
Amortized Cost | ||
Due in 1 year | 235,975 | |
Due after 1 but within 5 years | 696,023 | |
Due after 5 but within 10 years | 419,294 | |
Due after 10 years | 149,858 | |
Subtotal | 1,501,150 | |
Amortized Cost | 1,501,150 | 1,428,645 |
Fair Value | ||
Due in 1 year | 233,177 | |
Due after 1 but within 5 years | 657,186 | |
Due after 5 but within 10 years | 345,569 | |
Due after 10 years | 109,337 | |
Subtotal | 1,345,269 | |
U.S. agency mortgage-backed securities | ||
Amortized Cost | ||
Without single maturity date | 879,028 | |
Amortized Cost | 879,028 | 1,005,611 |
Fair Value | ||
Without single maturity date | 752,236 | |
Residential and commercial mortgage securities | ||
Amortized Cost | ||
Without single maturity date | 586,771 | |
Amortized Cost | 586,771 | 541,638 |
Fair Value | ||
Without single maturity date | 523,608 | |
Asset-backed securities | ||
Amortized Cost | ||
Without single maturity date | 645,522 | |
Amortized Cost | 645,522 | 582,144 |
Fair Value | ||
Without single maturity date | 608,330 | |
Money market funds | ||
Amortized Cost | ||
Without single maturity date | 199,147 | |
Amortized Cost | 199,147 | $ 210,012 |
Fair Value | ||
Without single maturity date | $ 199,147 |
Investments - Summary of Realiz
Investments - Summary of Realized Gain and Loss and Investments in Unrealized Loss Position (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Realized gross gains | $ 1,650 | $ 654 | $ 14,397 | $ 1,422 | |
Realized gross losses | (1,370) | (433) | (14,634) | (813) | |
Impairment loss | (105) | $ 0 | (7,411) | $ 0 | |
Fair Value | |||||
Less than 12 months | 3,473,897 | 3,473,897 | $ 2,033,809 | ||
12 months or more | 838,629 | 838,629 | 152,687 | ||
Total | 4,312,526 | 4,312,526 | 2,186,496 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (352,622) | (352,622) | (28,074) | ||
12 months or more | (138,758) | (138,758) | (5,393) | ||
Total | (491,380) | (491,380) | (33,467) | ||
U.S. Treasury securities | |||||
Fair Value | |||||
Less than 12 months | 361,655 | 361,655 | 207,122 | ||
12 months or more | 161,968 | 161,968 | 28,012 | ||
Total | 523,623 | 523,623 | 235,134 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (15,490) | (15,490) | (2,170) | ||
12 months or more | (15,342) | (15,342) | (796) | ||
Total | (30,832) | (30,832) | (2,966) | ||
U.S. agency mortgage-backed securities | |||||
Fair Value | |||||
Less than 12 months | 508,415 | 508,415 | 582,108 | ||
12 months or more | 243,821 | 243,821 | 26,131 | ||
Total | 752,236 | 752,236 | 608,239 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (74,350) | (74,350) | (9,414) | ||
12 months or more | (52,442) | (52,442) | (699) | ||
Total | (126,792) | (126,792) | (10,113) | ||
Municipal debt securities | |||||
Fair Value | |||||
Less than 12 months | 527,796 | 527,796 | 91,719 | ||
12 months or more | 14,588 | 14,588 | 312 | ||
Total | 542,384 | 542,384 | 92,031 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (64,097) | (64,097) | (1,281) | ||
12 months or more | (3,986) | (3,986) | (6) | ||
Total | (68,083) | (68,083) | (1,287) | ||
Non-U.S. government securities: | |||||
Fair Value | |||||
Less than 12 months | 51,784 | 51,784 | 22,986 | ||
12 months or more | 9,050 | 9,050 | 0 | ||
Total | 60,834 | 60,834 | 22,986 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (5,922) | (5,922) | (855) | ||
12 months or more | (3,370) | (3,370) | 0 | ||
Total | (9,292) | (9,292) | (855) | ||
Corporate debt securities | |||||
Fair Value | |||||
Less than 12 months | 1,166,786 | 1,166,786 | 522,120 | ||
12 months or more | 143,745 | 143,745 | 46,875 | ||
Total | 1,310,531 | 1,310,531 | 568,995 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (127,688) | (127,688) | (7,200) | ||
12 months or more | (28,200) | (28,200) | (2,265) | ||
Total | (155,888) | (155,888) | (9,465) | ||
Residential and commercial mortgage securities | |||||
Fair Value | |||||
Less than 12 months | 376,356 | 376,356 | 268,617 | ||
12 months or more | 143,118 | 143,118 | 38,256 | ||
Total | 519,474 | 519,474 | 306,873 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (38,046) | (38,046) | (5,200) | ||
12 months or more | (25,240) | (25,240) | (1,467) | ||
Total | (63,286) | (63,286) | (6,667) | ||
Asset-backed securities | |||||
Fair Value | |||||
Less than 12 months | 481,105 | 481,105 | 339,137 | ||
12 months or more | 122,339 | 122,339 | 13,101 | ||
Total | 603,444 | 603,444 | 352,238 | ||
Gross Unrealized Losses | |||||
Less than 12 months | (27,029) | (27,029) | (1,954) | ||
12 months or more | (10,178) | (10,178) | (160) | ||
Total | $ (37,207) | $ (37,207) | $ (2,114) |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) security | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) security | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) security | |
Investments available for sale | |||||
Number of investment securities in an unrealized loss position | security | 2,720 | 2,720 | 1,180 | ||
Impairment | $ 105 | $ 0 | $ 7,411 | $ 0 | |
Other invested assets | 263,126 | 263,126 | $ 170,472 | ||
Income from other invested assets | 9,617 | $ 40,741 | 36,275 | $ 41,389 | |
Fair value of investments deposited with insurance regulatory authorities | 9,100 | 9,100 | 9,700 | ||
Net unrealized gains | 9,900 | 22,500 | |||
Essent Re | |||||
Investments available for sale | |||||
Fair value of the required investments on deposit in trusts | 1,000,000 | 1,000,000 | 982,600 | ||
Essent Guaranty | |||||
Investments available for sale | |||||
Assets on deposit under reinsurance agreement | 8,600 | 8,600 | 8,500 | ||
Assets on deposit for the benefit of the sponsor | 9,000 | 9,000 | $ 9,000 | ||
Limited Partnership Investments | |||||
Investments available for sale | |||||
Other assets, fair value | $ 172,600 | 172,600 | |||
Funding commitments | $ 29,300 | ||||
Limited Partnership Investments | Minimum | |||||
Investments available for sale | |||||
Asset liquidation period | 2 years | ||||
Limited Partnership Investments | Maximum | |||||
Investments available for sale | |||||
Asset liquidation period | 9 years | ||||
Securities | Credit Concentration Risk | Internal Investment Grade | |||||
Investments available for sale | |||||
Concentration risk, percentage | 98% |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Components of net investment income | ||||
Gross investment income | $ 34,820 | $ 23,031 | $ 92,377 | $ 69,195 |
Investment expenses | (2,226) | (1,458) | (5,764) | (4,091) |
Net investment income | 32,594 | 21,573 | 86,613 | 65,104 |
Fixed maturities | ||||
Components of net investment income | ||||
Gross investment income | 33,948 | 23,001 | 91,245 | 69,037 |
Short-term investments | ||||
Components of net investment income | ||||
Gross investment income | $ 872 | $ 30 | $ 1,132 | $ 158 |
Reinsurance - Effect on Net Pre
Reinsurance - Effect on Net Premiums Written and Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net premiums written: | ||||
Direct | $ 239,773 | $ 229,228 | $ 692,687 | $ 693,434 |
Ceded | (30,543) | (26,880) | (73,384) | (84,438) |
Net premiums written | 209,230 | 202,348 | 619,303 | 608,996 |
Net premiums earned: | ||||
Direct | 238,477 | 245,598 | 708,659 | 739,660 |
Ceded | (30,543) | (26,880) | (73,384) | (84,438) |
Net premiums earned | $ 207,934 | $ 218,718 | $ 635,275 | $ 655,222 |
Reinsurance - Quota Share Reins
Reinsurance - Quota Share Reinsurance (Details) - Reinsurance Contract [Axis]: Quota Share Reinsurance - USD ($) $ in Billions | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 01, 2019 | Sep. 30, 2022 |
QSR 2019 | ||||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||||
Ceded premiums earned related to percent of risk on eligible single premium policies | 40% | |||
Ceded premiums earned related to percent of risk on all other eligible policies written | 20% | |||
Ceding commission, percent | 20% | |||
Profit commission, percent, maximum | 63% | 60% | ||
RIF ceded | $ 6.5 | |||
QSR 2022 | ||||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||||
Ceded premiums earned related to percent of risk on eligible single premium policies | 20% | |||
Ceding commission, percent | 20% | |||
Profit commission, percent, maximum | 62% | |||
RIF ceded | $ 6.5 |
Reinsurance - Excess of Loss Re
Reinsurance - Excess of Loss Reinsurance (Details) - Reinsurance Contract [Axis]: Mortgage Insurance | 9 Months Ended |
Sep. 30, 2022 | |
Other Reinsurance | Essent Guaranty | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
VIE | Mortgage Insurance Linked Notes | Radnor Re | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Reinsurance retention policy, debt issued to cover insurance, term | 10 years |
VIE | Radnor Re | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
Reinsurance - Premium Details (
Reinsurance - Premium Details (Details) - Reinsurance Contract [Axis]: Vintage Year 2017 | Sep. 30, 2022 |
Radnor Re 2018-1 Ltd. | |
Effects of Reinsurance [Line Items] | |
Increase of margin component of reinsurance premium | 50% |
Panel of Reinsurers | |
Effects of Reinsurance [Line Items] | |
Increase of margin component of reinsurance premium | 50% |
Reinsurance - Essent Guaranty's
Reinsurance - Essent Guaranty's Excess of Loss Reinsurance Coverages and Retentions (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | $ 211,316,119 |
Remaining Risk in Force | 55,562,055 |
Remaining Reinsurance in Force | 2,599,297 |
Remaining First Layer Retention | 1,940,960 |
Reinsurance Contract [Axis]: Vintage Year 2015 And 2016 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 6,415,924 |
Remaining Risk in Force | 1,740,167 |
Remaining Reinsurance in Force | 61,478 |
Remaining First Layer Retention | 206,925 |
Reinsurance Contract [Axis]: Vintage Year 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 6,129,801 |
Remaining Risk in Force | 1,610,026 |
Remaining Reinsurance in Force | 369,893 |
Remaining First Layer Retention | 216,632 |
Reinsurance Contract [Axis]: Vintage Year 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 6,961,516 |
Remaining Risk in Force | 1,791,216 |
Remaining Reinsurance in Force | 401,681 |
Remaining First Layer Retention | 248,875 |
Reinsurance Contract [Axis]: Vintage Year 2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 8,578,642 |
Remaining Risk in Force | 2,203,474 |
Remaining Reinsurance in Force | 498,675 |
Remaining First Layer Retention | 214,874 |
Reinsurance Contract [Axis]: Vintage Year 2020 And 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 43,021,732 |
Remaining Risk in Force | 10,731,139 |
Remaining Reinsurance in Force | 486,933 |
Remaining First Layer Retention | 278,919 |
Reinsurance Contract [Axis]: Vintage Year 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 42,367,258 |
Remaining Risk in Force | 11,236,549 |
Remaining Reinsurance in Force | 423,462 |
Remaining First Layer Retention | 279,415 |
Reinsurance Contract [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through December 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 63,515,812 |
Remaining Risk in Force | 17,043,854 |
Remaining Reinsurance in Force | 119,307 |
Remaining First Layer Retention | 426,096 |
Reinsurance Contract [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through July 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 34,325,434 |
Remaining Risk in Force | 9,205,630 |
Remaining Reinsurance in Force | 237,868 |
Remaining First Layer Retention | 303,761 |
ILN 2015 & 2016 | Reinsurance Contract [Axis]: Vintage Year 2015 And 2016 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 61,478 |
Radnor Re 2018-1 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 242,123 |
Radnor Re 2019-1 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 325,537 |
Radnor Re 2020-1 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 448,805 |
Radnor Re 2021-1 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2020 And 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 486,933 |
Radnor Re 2021-2 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 423,462 |
Radnor Re 2021-2 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through December 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Radnor Re 2021-2 Ltd. | Reinsurance Contract [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through July 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 237,868 |
ILN | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 2,226,206 |
Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 373,091 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2015 And 2016 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 127,770 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 76,144 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 49,870 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2020 And 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through December 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 119,307 |
Other Reinsurance | Reinsurance Contract [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through July 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | $ 0 |
Reinsurance - Summary of Total
Reinsurance - Summary of Total Assets and Maximum Exposure Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Total VIE Assets | $ 5,556,904 | $ 5,722,174 |
VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 2,226,206 | |
Maximum Exposure to Loss, On - Balance Sheet | (4,432) | |
Maximum Exposure to Loss, Off - Balance Sheet | 568 | |
Total | (3,864) | |
VIE | Radnor Re 2018-1 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 242,123 | |
Maximum Exposure to Loss, On - Balance Sheet | 369 | |
Maximum Exposure to Loss, Off - Balance Sheet | 25 | |
Total | 394 | |
VIE | Radnor Re 2019-1 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 325,537 | |
Maximum Exposure to Loss, On - Balance Sheet | (1,884) | |
Maximum Exposure to Loss, Off - Balance Sheet | 59 | |
Total | (1,825) | |
VIE | Radnor Re 2019-2 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 61,478 | |
Maximum Exposure to Loss, On - Balance Sheet | (1,474) | |
Maximum Exposure to Loss, Off - Balance Sheet | 1 | |
Total | (1,473) | |
VIE | Radnor Re 2020-1 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 448,805 | |
Maximum Exposure to Loss, On - Balance Sheet | (1,098) | |
Maximum Exposure to Loss, Off - Balance Sheet | 78 | |
Total | (1,020) | |
VIE | Radnor Re 2021-1 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 486,933 | |
Maximum Exposure to Loss, On - Balance Sheet | (1,882) | |
Maximum Exposure to Loss, Off - Balance Sheet | 136 | |
Total | (1,746) | |
VIE | Radnor Re 2021-2 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 423,462 | |
Maximum Exposure to Loss, On - Balance Sheet | 1,033 | |
Maximum Exposure to Loss, Off - Balance Sheet | 220 | |
Total | 1,253 | |
VIE | Radnor Re 2022-1 Ltd. | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 237,868 | |
Maximum Exposure to Loss, On - Balance Sheet | 504 | |
Maximum Exposure to Loss, Off - Balance Sheet | 49 | |
Total | $ 553 |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Reserve Balances for Losses and Loss Adjustment Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (LAE) | ||||||
Reserve for losses and LAE at beginning of period | $ 407,445 | $ 374,941 | ||||
Less: Reinsurance recoverables | $ 13,244 | $ 26,970 | 13,244 | 26,970 | $ 25,940 | $ 19,061 |
Net reserve for losses and LAE at beginning of period | 381,505 | 355,880 | ||||
Add provision for losses and LAE, net of reinsurance, occurring in: | ||||||
Current period | 63,236 | 83,973 | ||||
Prior years | (242,041) | (49,483) | ||||
Net incurred losses and LAE during the current period | 4,252 | (7,483) | (178,805) | 34,490 | ||
Deduct payments for losses and LAE, net of reinsurance, occurring in: | ||||||
Current period | 111 | 231 | ||||
Prior years | 3,339 | 4,153 | ||||
Net loss and LAE payments during the current period | 3,450 | 4,384 | ||||
Net reserve for losses and LAE at end of period | 199,250 | 385,986 | 199,250 | 385,986 | ||
Plus: Reinsurance recoverables | 13,244 | 26,970 | 13,244 | 26,970 | $ 25,940 | $ 19,061 |
Reserve for losses and LAE at end of period | $ 212,494 | $ 412,956 | $ 212,494 | $ 412,956 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Unusual Risk or Uncertainty [Line Items] | |||||
Liability incurred for claims and claim adjustment expenses | $ 3,339 | $ 4,153 | |||
Prior year claims and claims adjustment expense | (242,041) | (49,483) | |||
Benefit recorded in provision for losses | 164,100 | ||||
Reserve for losses and LAE, for prior years | $ 136,100 | $ 302,200 | |||
Percent of defaults cured | 98% | ||||
COVID-19 | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Reserve rate | 2% | 4% | 7% |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 825,000,000 | |
Amount outstanding, gross | $ 425,000,000 | $ 425,000,000 |
Weighted average interest during period | 4.39% | 1.79% |
Revolving Credit Facility | ||
Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 400,000,000 | |
Line of credit facility, accordion feature (up to) | $ 175,000,000 | |
Annual commitment fee rate | 0.25% | |
Term Loan | ||
Credit Facility [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 425,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Indemnifications related to contract underwriting services | ||
Loss Contingencies [Line Items] | ||
Amount paid for remedies (less than) | $ 0.1 | $ 0.1 |
Capital Stock - Narrative (Deta
Capital Stock - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 12, 2022 $ / shares | Nov. 04, 2022 $ / shares | Apr. 30, 2022 shares | Sep. 30, 2022 USD ($) vote $ / shares shares | Jun. 30, 2022 $ / shares | Mar. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares shares | Sep. 30, 2021 $ / shares | Jun. 30, 2021 $ / shares | Mar. 31, 2021 $ / shares | Sep. 30, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 $ / shares shares | May 31, 2022 USD ($) | May 31, 2021 USD ($) | |
Dividends Payable [Line Items] | ||||||||||||||
Common shares, authorized (in shares) | shares | 233,333,000 | 233,333,000 | 233,333,000 | 233,333,000 | ||||||||||
Number of votes per share | vote | 1 | 1 | ||||||||||||
Maximum percent of individual ownership | 9.50% | 9.50% | ||||||||||||
Minimum number of votes per share for other shareholders under 9.5% shareholder provision | vote | 1 | 1 | ||||||||||||
Quarterly cash dividends declared (in dollars per share) | $ / shares | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.63 | $ 0.70 | |||||
Quarterly cash dividends paid (in dollars per share) | $ / shares | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.63 | $ 0.70 | |||||
Subsequent event | ||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||
Quarterly cash dividends declared (in dollars per share) | $ / shares | $ 0.23 | |||||||||||||
Forecast | ||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||
Quarterly cash dividends paid (in dollars per share) | $ / shares | $ 0.23 | |||||||||||||
Share Repurchase Plan 2021 | ||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||
Share repurchase approved amount | $ | $ 250,000,000 | |||||||||||||
Stock repurchased (in shares) | shares | 543,399 | 2,136,961 | ||||||||||||
Shares acquired and cancelled | $ | $ 92,200,000 | |||||||||||||
Share Repurchase Plan 2022 | ||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||
Share repurchase approved amount | $ | $ 250,000,000 | |||||||||||||
Stock repurchased (in shares) | shares | 0 | |||||||||||||
Remaining authorized repurchase amount | $ | $ 250,000,000 | $ 250,000,000 |
Capital Stock - Dividends (Deta
Capital Stock - Dividends (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||||||||
Quarterly cash dividends paid (in dollars per share) | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.63 | $ 0.70 |
Quarterly cash dividends declared (in dollars per share) | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.63 | $ 0.70 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Nonvested Common Share and Common Share Unit Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Nonvested shares | Time and Performance- Based Share Awards | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 500 |
Granted (in shares) | 308 |
Vested (in shares) | (139) |
Forfeited (in shares) | 0 |
Outstanding at end of period (in shares) | 669 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 31.29 |
Granted (in dollars per share) | $ / shares | 14.83 |
Vested (in dollars per share) | $ / shares | 45.32 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 21.04 |
Nonvested shares | Time-Based Share Awards | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 140 |
Granted (in shares) | 87 |
Vested (in shares) | (69) |
Forfeited (in shares) | 0 |
Outstanding at end of period (in shares) | 158 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 45.31 |
Granted (in dollars per share) | $ / shares | 46.15 |
Vested (in dollars per share) | $ / shares | 44.86 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 45.97 |
Share Units | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 461 |
Granted (in shares) | 161 |
Vested (in shares) | (178) |
Forfeited (in shares) | (79) |
Outstanding at end of period (in shares) | 365 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 47.94 |
Granted (in dollars per share) | $ / shares | 42.65 |
Vested (in dollars per share) | $ / shares | 47.87 |
Forfeited (in dollars per share) | $ / shares | 48.71 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 45.43 |
DEUs | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 28 |
Granted (in shares) | 18 |
Vested (in shares) | (13) |
Forfeited (in shares) | (2) |
Outstanding at end of period (in shares) | 31 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 41.75 |
Granted (in dollars per share) | $ / shares | 41.10 |
Vested (in dollars per share) | $ / shares | 41.28 |
Forfeited (in dollars per share) | $ / shares | 42.70 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 41.53 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Feb. 28, 2022 | Feb. 28, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-based compensation | ||||
Shares tendered by employees to pay employee withholding taxes (in shares) | 129,965 | |||
Nonvested shares, share units or DEU | ||||
Stock-based compensation | ||||
Total fair value of shares vested | $ 17.3 | $ 18.4 | ||
Nonvested shares, share units | ||||
Stock-based compensation | ||||
Unrecognized compensation expense | $ 21.2 | |||
Expected weighted average period for recognition of expense | 2 years 1 month 6 days | |||
Certain members of senior management | Performance shares | ||||
Stock-based compensation | ||||
Incremental compensation expense | $ 4 | |||
Unrecognized compensation expense | $ 0.5 | |||
Expected weighted average period for recognition of expense | 4 months 24 days | |||
Time-Based Share Awards | Certain members of senior management | Nonvested shares | 2013 Plan | ||||
Stock-based compensation | ||||
Performance period | 3 years | |||
Time-Based Share Awards | Certain members of senior management | Nonvested shares | 2013 Plan | First Vesting Period | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Time-Based Share Awards | Certain members of senior management | Nonvested shares | 2013 Plan | Second Vesting Period | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Time-Based Share Awards | Certain members of senior management | Nonvested shares | 2013 Plan | Third Vesting Period | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Time-Based Share Awards | Employee | Share Units | Incentive program bonus award fiscal year performance | ||||
Stock-based compensation | ||||
Award vesting period | 3 years | |||
Time-Based Share Awards | Employee | Share Units | Incentive program bonus award fiscal year performance | First Vesting Period | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Time-Based Share Awards | Employee | Share Units | Incentive program bonus award fiscal year performance | Second Vesting Period | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Time-Based Share Awards | Employee | Share Units | Incentive program bonus award fiscal year performance | Third Vesting Period | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Vesting Based On Performance | Certain members of senior management | Nonvested shares | 2013 Plan | ||||
Stock-based compensation | ||||
Performance period | 3 years | |||
Vesting Based On Performance | Certain members of senior management | Nonvested shares | 2013 Plan | Maximum | ||||
Stock-based compensation | ||||
Vesting percent | 200% |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Nonvested Performance-Based Share Awards (Details) - Nonvested shares | 9 Months Ended |
Sep. 30, 2022 | |
13% "Target" | |
Stock-based compensation | |
Three-Year Book Value Per Share CAGR | 13% |
13% "Target" | ≤25th percentile | |
Stock-based compensation | |
Vesting percentile | 100% |
13% "Target" | 50th percentile "Target" | |
Stock-based compensation | |
Vesting percentile | 150% |
13% "Target" | ≥75th percentile | |
Stock-based compensation | |
Vesting percentile | 200% |
11% | |
Stock-based compensation | |
Three-Year Book Value Per Share CAGR | 11% |
11% | ≤25th percentile | |
Stock-based compensation | |
Vesting percentile | 75% |
11% | 50th percentile "Target" | |
Stock-based compensation | |
Vesting percentile | 125% |
11% | ≥75th percentile | |
Stock-based compensation | |
Vesting percentile | 175% |
9% | |
Stock-based compensation | |
Three-Year Book Value Per Share CAGR | 9% |
9% | ≤25th percentile | |
Stock-based compensation | |
Vesting percentile | 50% |
9% | 50th percentile "Target" | |
Stock-based compensation | |
Vesting percentile | 100% |
9% | ≥75th percentile | |
Stock-based compensation | |
Vesting percentile | 150% |
7% | |
Stock-based compensation | |
Three-Year Book Value Per Share CAGR | 7% |
7% | ≤25th percentile | |
Stock-based compensation | |
Vesting percentile | 25% |
7% | 50th percentile "Target" | |
Stock-based compensation | |
Vesting percentile | 75% |
7% | ≥75th percentile | |
Stock-based compensation | |
Vesting percentile | 125% |
5% | |
Stock-based compensation | |
Three-Year Book Value Per Share CAGR | 5% |
5% | ≤25th percentile | |
Stock-based compensation | |
Vesting percentile | 0% |
5% | 50th percentile "Target" | |
Stock-based compensation | |
Vesting percentile | 50% |
5% | ≥75th percentile | |
Stock-based compensation | |
Vesting percentile | 100% |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Compensation Expense, Net of Forfeitures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Compensation expense | $ 4,702 | $ 5,511 | $ 13,707 | $ 16,075 |
Income tax benefit | $ 930 | $ 1,111 | $ 2,715 | $ 3,156 |
Dividend Restrictions (Details)
Dividend Restrictions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Dividends Restrictions | |||||
Stockholders' equity | $ 4,294,208,000 | $ 4,167,984,000 | $ 4,294,208,000 | $ 4,167,984,000 | $ 4,236,114,000 |
Affiliated Entity | Essent Guaranty | |||||
Dividends Restrictions | |||||
Unassigned surplus | 318,100,000 | 318,100,000 | |||
Dividends paid to parent company | 60,000,000 | 47,200,000 | 260,000,000 | 147,200,000 | |
Amount available for dividend distribution | 237,700,000 | 237,700,000 | |||
Affiliated Entity | Essent PA | |||||
Dividends Restrictions | |||||
Unassigned surplus | 18,500,000 | 18,500,000 | |||
Dividends paid to parent company | 0 | $ 0 | 0 | $ 0 | |
Amount available for dividend distribution | 5,600,000 | 5,600,000 | |||
Affiliated Entity | Essent Re | |||||
Dividends Restrictions | |||||
Stockholders' equity | 1,400,000,000 | 1,400,000,000 | |||
Affiliated Entity | Essent Re | Quota share reinsurance | Minimum | |||||
Dividends Restrictions | |||||
Stockholders' equity | $ 100,000,000 | $ 100,000,000 |
Earnings per Share (EPS) - Reco
Earnings per Share (EPS) - Reconciliation of Net Income and Weighted Average Common Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 178,051 | $ 205,353 | $ 683,987 | $ 500,796 |
Basic weighted average shares outstanding (in shares) | 106,870 | 111,001 | 107,314 | 111,708 |
Dilutive effect of nonvested shares (in shares) | 467 | 386 | 418 | 362 |
Diluted weighted average shares outstanding (in shares) | 107,337 | 111,387 | 107,732 | 112,070 |
Basic earnings per share (in dollars per share) | $ 1.67 | $ 1.85 | $ 6.37 | $ 4.48 |
Diluted earnings per share (in dollars per share) | $ 1.66 | $ 1.84 | $ 6.35 | $ 4.47 |
Earnings per Share (EPS) - Narr
Earnings per Share (EPS) - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | |
EPS calculation | |||||
Antidilutive nonvested shares (in shares) | 10,417 | 181,476 | 90,413 | 230,595 | |
2022 Performance-based share awards | |||||
EPS calculation | |||||
Vesting percent | 146% | ||||
Percentage of award issuable if current period end were end of contingency period | 73% | 73% | 73% | ||
2021 Performance based share awards | |||||
EPS calculation | |||||
Vesting percent | 100% | 100% | |||
Percentage of award issuable if current period end were end of contingency period | 50% | 50% | 50% | 50% | 50% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other comprehensive income (loss): | ||||
Other comprehensive loss, before tax | $ (159,010) | $ (45,516) | $ (556,416) | $ (70,704) |
Other comprehensive income (loss): | ||||
Other comprehensive income, tax effect | 22,000 | 8,599 | 82,132 | 10,944 |
Net of Tax | ||||
Balance, beginning of period | 4,236,114 | |||
Other comprehensive income (loss): | ||||
Total other comprehensive income (loss) | (137,010) | (36,917) | (474,284) | (59,760) |
Balance, end of period | 4,294,208 | 4,167,984 | 4,294,208 | 4,167,984 |
Accumulated Other Comprehensive Income (Loss) | ||||
Before Tax | ||||
AOCI before tax, beginning of period | (332,126) | 143,136 | 65,280 | 168,324 |
Other comprehensive income (loss): | ||||
AOCI before tax, end of period | (491,136) | 97,620 | (491,136) | 97,620 |
Tax Effect | ||||
AOCI tax effect, beginning of period | 45,559 | (27,705) | (14,573) | (30,050) |
Other comprehensive income (loss): | ||||
AOCI tax effect, end of period | 67,559 | (19,106) | 67,559 | (19,106) |
Net of Tax | ||||
Balance, beginning of period | (286,567) | 115,431 | 50,707 | 138,274 |
Other comprehensive income (loss): | ||||
Total other comprehensive income (loss) | (137,010) | (36,917) | (474,284) | (59,760) |
Balance, end of period | (423,577) | 78,514 | (423,577) | 78,514 |
Accumulated Net Investment Gains (Losses) On Investments | ||||
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) arising during the period | (158,835) | (45,295) | (564,064) | (70,095) |
Less: Reclassification adjustment for losses (gains) included in net income, before tax | (175) | (221) | 7,648 | (609) |
Other comprehensive loss, before tax | (159,010) | (45,516) | (556,416) | (70,704) |
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) arising during the period | 21,899 | 8,548 | 81,051 | 10,923 |
Less: Reclassification adjustment for losses (gains) included in net income, tax effect | 101 | 51 | 1,081 | 21 |
Other comprehensive income, tax effect | 22,000 | 8,599 | 82,132 | 10,944 |
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) arising during the period | (136,936) | (36,747) | (483,013) | (59,172) |
Less: Reclassification adjustment for losses (gains) included in net income, net of tax | (74) | (170) | 8,729 | (588) |
Total other comprehensive income (loss) | $ (137,010) | $ (36,917) | $ (474,284) | $ (59,760) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial Assets: | ||
Fair Value | $ 4,584,844 | $ 4,962,887 |
Recurring | ||
Financial Assets: | ||
Total assets at fair value | 4,584,844 | 4,962,887 |
Recurring | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 535,636 | 448,793 |
Recurring | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 0 | 5,504 |
Recurring | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 752,236 | 1,008,863 |
Recurring | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 559,784 | 627,599 |
Recurring | Non-U.S. government securities: | ||
Financial Assets: | ||
Fair Value | 60,834 | 79,743 |
Recurring | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 1,345,269 | 1,455,247 |
Recurring | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 523,608 | 545,423 |
Recurring | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 608,330 | 581,703 |
Recurring | Money market funds | ||
Financial Assets: | ||
Fair Value | 199,147 | 210,012 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | ||
Financial Assets: | ||
Total assets at fair value | 734,783 | 658,805 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 535,636 | 448,793 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Non-U.S. government securities: | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Money market funds | ||
Financial Assets: | ||
Fair Value | 199,147 | 210,012 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Total assets at fair value | 3,850,061 | 4,304,082 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 0 | 5,504 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 752,236 | 1,008,863 |
Recurring | Significant Other Observable Inputs (Level 2) | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 559,784 | 627,599 |
Recurring | Significant Other Observable Inputs (Level 2) | Non-U.S. government securities: | ||
Financial Assets: | ||
Fair Value | 60,834 | 79,743 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 1,345,269 | 1,455,247 |
Recurring | Significant Other Observable Inputs (Level 2) | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 523,608 | 545,423 |
Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 608,330 | 581,703 |
Recurring | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Total assets at fair value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Non-U.S. government securities: | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Money market funds | ||
Financial Assets: | ||
Fair Value | $ 0 | $ 0 |
Statutory Accounting - Schedule
Statutory Accounting - Schedule of Statutory Net Income, Statutory Surplus and Contingency Reserve Liability (Details) - Affiliated Entity - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Essent Guaranty | ||
Dividends Restrictions | ||
Statutory net income | $ 479,389 | $ 364,654 |
Statutory surplus | 1,023,440 | 1,082,334 |
Contingency reserve liability | 1,990,536 | 1,721,424 |
Essent PA | ||
Dividends Restrictions | ||
Statutory net income | 1,179 | 2,623 |
Statutory surplus | 57,489 | 55,779 |
Contingency reserve liability | $ 57,189 | $ 57,205 |
Statutory Accounting - Narrativ
Statutory Accounting - Narrative (Details) - Affiliated Entity - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Essent Guaranty | |||
Dividends Restrictions | |||
Increase in contingency reserve | $ 209,600 | ||
Released contingency reserve | 11,800 | $ 2,000 | |
Statutory net income | 479,389 | 364,654 | |
Essent PA | |||
Dividends Restrictions | |||
Increase in contingency reserve | 700 | ||
Released contingency reserve | 900 | 100 | |
Essent Re | |||
Dividends Restrictions | |||
Statutory capital and surplus | 1,400,000 | $ 1,300,000 | |
Statutory net income | $ 178,500 | $ 166,200 |