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Enact (ACT)

Participants
Daniel Kohl Vice President of Investor Relations
Rohit Gupta President and Chief Executive Officer
Dean Mitchell Chief Financial Officer and Treasurer
Doug Harter Credit Suisse
Bose George KBW
Geoffrey Dunn Dowling & Partners
Mihir Bhatia Bank of America
Rick Shane JP Morgan
Ryan Gilbert BTIG
Call transcript
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Operator

00:03 Hello, and welcome to Enact's Fourth Quarter Earnings Call. Please be advised that today conference call is being recorded. 00:11 I would now like to turn the conference over to your first speaker today, Daniel Kohl, Vice President of Investor Relations.

You may begin.

Daniel Kohl

00:31 Thank you, and good morning, everyone. quarter fourth our to earnings call. Welcome

results well call After XX:XX close at the section These discuss begin, Results. yesterday our today and include on Officer; market prepared and issued will contains the remind me are Rohit the will being filing no the www.ir.enactmi.com provide Investor as supplement, your in our these today's upcoming our presentation, our are XX:XX marked Relations to of expectations and on measures. these statements may to measures Enact's questions. strategy. the against undertake in management's in Officer and a the projections the remarks, press language GAAP to information, Rohit statements future our like as call which Executive Chief of Rohit will and statements. release, on differ found financial business, quarterly update of XXXX. overview regarding metrics and President we and an This that and assumptions, of release of for are such non-GAAP will the which Reconciliations estimates, and on Dean financial current the mind new comprehensive section financial after otherwise. as recorded available Dean set XX:XX call Treasurer. review I'll that for progress results For With and would release most be before prepared forward-looking filings to SEC, or press fourth quarterly of our Gupta, statements Before that, website quarter any discussion please our a we keep to the everyone or press cautionary as of release, and investor available date XX:XX our company's I turn in relevant today's Joining performance today risks result obligation Mitchell, XX:XX Financial today's and then to Rohit. quarter the remarks are some to subject a certain the The uncertainties, we metrics based of the turning operational press please details We fourth website. events our back release, use of materially. forward-looking uncertainties, closing of is includes can revise risks remarks. take the over are that Chief Quarterly with cause results website. also Also, under actual

Rohit Gupta

XX:XX notable full forward enhances IPO milestones. Enact, quarter XX:XX for everyone. and Welcome call. which significant aspects of our Good year successful fourth as our XXXX multiple quarter a achieve Most a morning an was will capped was our company. a that business us Thanks. very earnings transformational several excellent to year delivered to strong in our September, allow company. achieved for Daniel. major a potential We we and in step our

completion the growth year result share on see market which continue we more since in in our consistently strongest of also It growth benefits to in begun of execute some already a the transaction The cycle months a few prudent which with for was have We its history. this performance our to come. tested driven was has XX:XX just to much strategy, Enact.

receive customers deepen a from hallmark we the key data financial and learning, following ones. invested been our enhances remained with Balance proposition a and to reactivated value new to has to that customers an customer rating our flexibility continue to that needs. existing experience their in we analytics, our our tailored strengthened Our areas XXXX. existing such case XX:XX machine IPO. the quarter, We differentiated as in agencies of and strategy, further always and develop sheet relationship three and ensure received ability all upgrades During was further XX:XX modeling strength pursue and the we new relationships new our business by with

We to in continue the and of by the balance maintaining and year, XX:XX we covered transfers, for high with highest our XX% of our the to PMIERs was in on executing protect properly force new of that As balance sheet of business standards history. model. ended risk by year end reward our and risk buffers our credit publish the standards one acquire-manage-distribute risk

announcement our plans XX:XX a another an XX:XX step homeownership the our through Additionally, refinance another we purchase today the housing, get economic families the on growth, of milestones pandemic our balance We and cash enabled their public through for our million our and against some to existing was in allocation to home in capital homes investing of new low Importantly, it in minutes. $XXX on few we XX:XX in Robust will achieved the supporting XXX,XXX special issuance in their strategy, strong highlights and supportive. environment we in challenges. X% the consumer forward Mortgage families remained Turning to its in year. climb fulfilled stay remains of demand sales prices front to dreams. returning company. sheet, transactions helped more through to transaction a unemployment year. XXX also fueled Insurance-In-Force home the increasing at which with and capital approximately these XX,XXX reinsurance as policy or homes up that first to homebuyers robust, activity into for drove and written our a XXX,XXX dividend a origination for healthy executed amount insurance refinancing We by loan strong growth In XXXX. strong continue shareholders average another our XX:XX XXXX, and dividend and significant million this helping once holders, took say about cost. attractive fourth of the a year quarter, have achieve again XX:XX future Dean balanced mission

we result have insurance our year billion, to growth in economic record and management. reflecting while ever as metrics compared or achieved, $X.XX to operating adjusted new for share, share expense our to against continue adjusted a performance $XXX Adjusting Insurance-In-Force Our per XX:XX our million Insurance-In-Force diluted in the prudent we delinquencies highest issuance, key history. strongest diluted large the well rose of a $XXX written billion. $XX XX:XX XXXX debt interest as recovery related million delivered ongoing is the in as books, for was write income this expense as per $XXX income We new the to was lower of operating XXXX. or $X.XX

particularly returns. A to high business. and key with with of new our of We book our that to yielding higher of XX:XX delinquency our operational risk to been the to and prudently XX:XX Driven improved the has rate rates management cure XXXX so and excellence, by end committed has X.X% are throughout from throughout building today. low the pricing priced pricing pandemic. quality at and We XXXX mid-teens strategy success aspect commitment continued a did X% execution business

XX%. Our loss year ended ratio the at

Driven ratio of housing. I of weighted about our quality Before I risk shareholders. XX:XX or average maintain goals, average mentioned, the a to PMIERs of returning we a build continue balance take the trends As including to program, growth beyond we concentration strong and flexibility strong value an With XX% success of what as balance at our continue me X.X%. XXXX risk Insurance-In-Force billion our pursue business our to fundamentals tailwinds credit year-end, maintaining our let we see Dean, portfolio, priority. a published about turn with in forward. of and at the to good to speak layered sufficiency capital XXX, was industry capital high minute on Demographic by and enhancing XXXX. going key our to sheet, allocation record over in very for transfer demand to sheet feel robust see declining a we are it and and XX:XX to $X prospects XX:XX a FICO for XXX% loan risk strength standards is year-end profile a our We strategic

activity As new advantage risk committed of should call capital, persistency offsetting transfer shareholders. and This an cost and for Insurance-In-Force power continue continued customers, Against strengthen originations. performance full to differentiated scaled the XX:XX XX:XX the in of to execution our strategy, to value of should competitive will competitive be backdrop, against increasing continued ultimately result financial XX:XX credit our with and provider growth. the solutions to over benefits value new net I provide and protecting our IPO, rates brand turn insurance balance the from we enhancing will now to relationships, take realizing this remain full-year that more a executing our to our including turn growth we drive the further lower generating we our and above our the stronger declines strategy, position any of higher we our business as investing And our to discuss the sheet our benefit enhanced fourth quarter flexibility. detail. position Dean modestly in in refinance in of Insurance-In-Force, interest expect writing

Dean Mitchell

and XX:XX morning, Rohit, everyone. good Thanks,

and in delivered million in to for share per diluted diluted per XXXX $X.XX quarter, year. the strong share a period as quarter the we quarter operating GAAP the in compared same income or per results or another fourth $XXX $XXX of of in in was compared XXXX. share per very same of $X.XX mentioned, third to diluted as quarter $X.XX diluted the diluted Rohit per share Adjusted income XXXX period XX:XX per quarter year. last concluded was that third the last $X.XX diluted strong and As share million net the share, financial $X.XX $X.XX

XXXX income diluted net quarter, million revenue Adjusted compared share, $XXX $X.XX to XX:XX share In operating $X.XX in the diluted diluted $XX of estimated For XXXX. billion, $X.XX from $XX million in million key driven $X.XX GAAP per share diluted million sequentially by share, compared $XXX lower drivers, to income the or totaled billion or $XXX mortgage per insurance New full-year, $XXX for written for per was or down XXXX. or was originations. terms per XX:XX

as XX:XX lower in a above use New newest last insurance older we've result end lapsing the the from last XXXX. was In and X% consecutive compared Persistency by billion were growing made with billion, XX% decline was New the was and policies expanded conditions concentration growth primarily in higher was larger our insurance from represented In higher pricing of same years. of was quarter $XXX priced total Our third $XXX for and mortgage quarter. was policies increased the in-line with year-over-year as XX% up these decrease profitability underwriting NIW XX:XX year. quarter for of portfolio the compared ago, levels policies portfolio, down cancellations premium our premium in $XXX Total for environment the fourth in quarter. addition, X% by The same and were by reflect the had million XX:XX us as for sequentially our fourth Insurance-In-Force. year-over-year within payment basis driven we of decreased current driven our the driven rate higher single same premiums persistency combination up our year also year insurance and ago. our X% of and in which Importantly, and XX% year quarter, in market period conditions the from portfolio. points revenues new success risk XX% the X.X well, of million a quarter of New increase by written written. force positively the premium billion and of to business Net of net market rates XX.X total book XX:XX return persistency XX.X XX% new New XX% as fourth pricing, book persistency priced market by Insurance-In-Force Investment our last to our yields. an to credit ending XX% was quarter, primarily was At transfer policies single million, year-over-year a lower in the the and teen continues our the quarter were for and XX%, $XXX points basis single in future the monthly partially X.X to compared and in XX:XX percentage contribute strong normalize. ceded quarter earned billion million, and the rates higher same as the year profiles. X% as in X% in-force by to billion of of risk of year. is last opportunity attractive investment premiums, earned at XX:XX XX:XX product As last increased up written attractive $XX profile low-to-mid mortgage purchase last the improve insurance premiums of XX% period of conditions at premiums quarter lower market years transactions which at as The offset last including to primarily prior program. quarter, enabling Insurance-In-Force, rates. quarter, mortgage the primarily and appetite, quarter, the a older continued Record for as Revenues quarter XX:XX year-over-year net to income written, insurance quarter partially large quarter our compared the increase the lapsing current returns. to to the credit driven by XXXX would compared adjusted reflecting the XX:XX XXXX basis in from to ceded time, by offset cancellations, the up from fourth XX.X return XX%, Risk approximately expect insurance offset in addition, written, and million the and was year-over-year our our over current our points $X.X low which write represented historically up both XX:XX XX.X of down primarily the insurance driven uptick from up from $XXX years down XXXX, commercial

of in For to the $XXX approximately compared quarter losses, in X,XXX change quarter to fourth as in up partially development the The delinquencies. reserve in year, and areas their include that in were sequential going quarter, of increase offset income favorable delinquencies delinquencies XXXX. our X,XXX FEMA-impacted last investment losses normal sequentially, loss current million quarter quarter million. the XXX million and was last delinquencies natural $X driven new higher by totaled in and to of addition the by year-over-year large million, delinquencies, The from losses $XX are pre-COVID-related favorable books the economy XX:XX quarter from $XX new an Turning through from New $XX in development million by XX:XX quarter were on the losses new to pattern from as approximately delinquencies in current lower XX% was the expected. improve continues as driven XX:XX decline disasters new and the reserve development pandemic. approximately in aging

also strengthening. fourth quarter reserve XX the of of million Additionally, XXXX included

levels XXX% ratio, is of Cures recovery. new plan, million losses cures represented For the approximately our a new of of XX,XXX in to quarter in X modestly both $XXX For delinquencies XX:XX delinquency with the compared the were by quarters in increased approximately and X.X% delinquencies of compared last the peak which the indicative Our XX:XX of from rate total the the compared as to This quarter to of X.X% in subject new XX% delinquencies. year, economy improvement prior decline cure delinquencies measures, fourth rate continuation quarter, quarter. as of reflects XXXX. of to associated continues to and were and pre-pandemic $XXX XX,XXX approximately consistent as new XX% quarter, outpacing of of driven delinquency XX:XX the ongoing million, forbearance year the recovers. the development consecutive quarter

have with delinquencies original expectation. plan third, [ever-to-date performance] our the to To loss embedded since new best our present, rate claim are on total terms cumulative resolution quarter the of to borrowers mark our approximately We the XX% XX% Our and respectively reserves using X% equity a increase position of XX:XX to of subject COVID-XX with COVID-XX we XX:XX assess assessment. forbearance the time those were ultimate house cured. claim claims an as rate have appropriate focus cure the quarters estimated to from XXXX. price loss reserves on over of of XXXX. The the our new estimate and XX%, second, more substantial delinquencies equity for their index-based XX:XX on delinquencies. their of forbearance continued of fourth continue of rate delinquencies cure delinquencies of of Turning an new for delinquent XXXX [ph] policies At completion our reach These time. or throughout approximately our plan remain our April to was estimated of of our delinquencies delinquencies delinquencies approximately XX% having new XX% nearing as consider now claim delinquencies consistent rates XX%, reflect through a date, as market with year-end

and $XX million our third takes. expenses mitigate, noted loss expectations. full-year, claims XXXX operating to $XXX the how in can the to quarter a ultimately and past, XX% frequency for talk XX% as was XX:XX the in-line are about minute compared X% were the serve few as to million XX:XX As expenses expenses, million progress of I've potential Operating and for both in year-over-year for in Now, were expenses that of Turning respectively to the about this with potential ratio delinquencies take we're a claim. quarter me XXXX. as in let thinking the and the the future expense up $XX and quarter to there operating puts

to also benefit efforts agreement serve to of time, At previously, time. decrease incur discussed shared non-recurrence and we've rate the will Genworth our related activities. In in the of will over up from we overhead ongoing public the to Our to with costs incremental same company corporate expenses as our including standing XX:XX IPO. preparation costs, should our drive our operational services run efficiency related addition,

XX:XX decline Taken liquidity, expenses and maintaining our as a approximately mentioned, we expect to ratings. grade Turning operating to together, Rohit $XXX strong in XXXX. sheet with capital we aligned to investment to balance million committed are

protection. sheet an of to credit PMIERs mortgage our Beyond risk quarter, traditional XXX approach diversification this about X.X to both approximately declined and of provided published on the reinsurers, in was volatility markets. X.X of effect above next XX:XX the at approximately of risk, in executed shareholders a which program, which by ceding quarter million, reduced sources since more decreased sufficiency has transactions conservative credit cost the was our PMIERs with assets This long aggregate were sheet part distribution invested risk provides in the million protection loss X.X our equivalents this reinsurers our addition, and to benefit debt term efficient were an XX:XX and at to XX:XX in to to allocation, PMIERs by during enhance program, which to of of level reduces [pursues] of our bolstering credit billion the PMIERs our acquiring that time confident billion rates, over and credit future X.X capital lapse reinsurance strong and X our sufficiency significant year, provide impacted XXX% reflects XX% sufficiency million continue the in balance efficient year-end, capital XX:XX loss approach programmatic the levels, cash Our cost, In to coverage reinsurance XX% transactions, includes volatility by of our excessive PMIERs low and business. business ratio cure. risk will our totaled year-end, future transfer risk our multiplier elevated cash executed That and sufficiency from the or equity had written our we forward approximately a portion existing XX:XX incremental COVID-XX the sequentially approximately sheet, risk offset giving by addition, to insurance and partially required investments balanced credit PMIERs transfer multiplier Turning and In and excess differentiation pursue The XXX or Moving delinquencies, attractive to For coverage support loss Combined we related delinquencies. in policies assets transfer we approximately of panel billion, returns which approximately origination driven was execution XXX in resolved million, related the we've executed with program's of which billion execution to the PMIERs growth approximately from delinquencies maintains we're balance benefits. GAAP before [ph] transaction sufficiency as demonstrate a COVID-XX the while was more of NIW balance X.X sufficiency our in loss of in XXXX, and XXXX. provides to shareholders. for prevailing we strength At capital decline January million coverage cost continue decline advance capital debt-to-capital benefit third reinsurance reinsurance of PMIERs capital transfer these XX:XX of was Our XXX XX:XX transactions, capital XX%. of X.X requirements. by the our the compares year, XX:XX and quarter. a dividend our metrics large our a inception XXX% of billion XXXX. the by year. broadly, billion flows, to of amortization billion, our XXX cash of strong of PMIERs billion interest book X.X potential lower

of the around assessment and we're of holding expect regular the our return process includes year. as shareholders, component financial look initiation I remains liquidity value dividend to key of front, company time. XX:XX through objectives million an drive of key executed to flexibility. we capital common to shareholder As with a which the include shareholders XXXX, plan gross and management to mid-year this $XXX this priorities, capital delivered our commitment evaluating a earlier, during dividend for in commitment XX:XX a balanced On for capital mentioned quarter. our a We special we return a Enact and risk cash Returning

a continue incremental capital XXXX, of turn this on performance to over dividend, the landscape. that, let conditions and of potential evaluate me In in call the based for Rohit. and addition back we'll XX:XX regulatory review to macroeconomic business ongoing to later return the an With our

Rohit Gupta

remain forbearance your that are Operator? hard achieve At a creating their it affordability, rates of and to mortgage both homebuyers to the to year. We Thanks, executed the strategy, value highs. record advocates XX:XX we dreams our committed of great now to people our increase questions. to our step housing homeownership. for particularly performance. Capitol we to for transformational administration, same for strong are Hill, journey wealth. cure our proud great keep We I'd in continued of healthy, to a XX:XX qualify with and a Enact credit homeownership. reached and resolution a shareholders. might drive take who team In their solutions on The All-in-all, sustainability took achieving next our contributions our member successful path We role Dean. every build to very We see each and XX:XX have enter homebuyers. working families solid of XX:XX homes, remains generated XXXX well that in finish accessibility, not in strong, for we and ready homeownership groups, success. consumer to helping made time the worked XXXX, growth possible to among like to remains the XXX,XXX and through otherwise their consumer thank continue XX:XX and the IPO, for We positioned incredibly demand, time, achieve market first

Operator

XX:XX Credit [Operator Thank question from first with Harter Suisse. you. Our Instructions] Doug comes

open. is line Your

Doug Harter

Thanks. XX:XX

or premium hoping I on to of out Just more some see premium when yield. the and as little get bottoming any where color bit a might kind the to guess, yield? we of clarity

Dean Mitchell

Hey it’s for Doug. Dean, Hey question. thanks the XX:XX

points near-term. insurance which our our I I we X.X pricing, the elevated think becoming in terms year of lower In you it impacted written, when concentration. fact it's higher overall older of of portfolio, about think talked years of are to rate what decline is book about consistent the by rate, of fluctuate premium most focus in Quite that do recent on coupled priced the kind that if is think rate, relative XXXX base with drivers quarter. policies we book last and base to honestly, the to basis premium bigger yield, are can lapsing premium important the New at the focusing percentage XX:XX on XXXX know our that a base of

So, think it's if on we hand XX which series last presentation the some on specifically refi like. our lapsing, some as and the that lot do at premium purchase lumpiness exhibited mix, impacted Doug. you is and short-term, cohort right credit at, to you're lumpiness going investor quarters, I base of XX. an perspective rate ahead time that is – a of Slide side, insurance six notice different top I New mix, lapse, written, look the From and over the on the by XX:XX net table look So, do Slide see quarter-to-quarter, the factors: in rate go think and

Doug Harter

color policies that would I give higher could to guess, of of kind as compare is you to there XX:XX of New on or insurance the in-force how the for when XXXX of that of kind or to kind is kind where to Just the most recent of to get curious happen? much to quarter, cost more any sense as of rate just yield? us written, Yes, lapsing a

Rohit Gupta

is This Doug. morning, Good XX:XX Rohit.

executing about term. is Dean when And on to and I things NIW for investors we rate provide a near metric are driving returns time. on that and believe think do our rate, competitive work basis. we So, maybe we say, strategy. can On would at our guidance base we an while we thing, in this premiums in look guidance our or first metric two rate. net to that longer-term on add just premium said, ensure it's it difficult market the it's XX:XX in are compelling basis, premium over do would choppiness fluctuate I provide a So, to there we like are we that tough to to what

net the look premium and market. to of market I quarter, stated the fourth in coming attractive dynamic constructive always quarter remains investors NIW MI have to you the return XX:XX continue as the market attractive our for XX.X% business continue we back rate a returns of previously year, with healthy generated a XX:XX past return to new in We remind If pricing returns. enabled the see and low-to-mid as fourth like level and in our referenced. consistent we in in pricing one see we on in Now as I would XXXX So, the the the billion to XX.X% written our quarter pricing, in returns. added did at of to it insurance XXXX, those healthy about your question industry and teen New in pricing think say, NIW at thing we some has write stabilizing a $XX is, us that at large have

any comment Beyond tough that, specific levels. pricing to on it's

Doug Harter

you. Thank XX:XX

Rohit Gupta

XX:XX Thank you.

Operator

XX:XX Thank you.

comes Our with from Bose next question George KBW.

Your line is open.

Bose George

now. over first, Actually, it just XX% percentage it's have morning. like XX% NIW increased, Good of the Yes. XX:XX with looks DTI

So, kind it's of back, highest pre-COVID. the

in driving or terms great. what's changes and just on that would curious on credit views that be other of any Just any color your

Rohit Gupta

to Rohit. as in the is that's that to in we start This population, are happen driving Bose. XXXX. a market shift continue you're Sure. happening thinking saw say, see we And XX:XX this. There a refinance things origination would burn-out morning. I of off about Good few

higher to generally is entire higher in macro the value, higher FICOs. debt-to-income from with and along purchase means the risk slightly I the more that kind of come XXXX. And market driving ratios, XX% slightly one believe, LTVs portion mid- that's year, to So purchased in For XXXX and loan also loans XX:XX ratios attributes up FICOs. XX% with debt-to-income of factor

Second thing risk and we are from while our We XX:XX before on have is layered perspective, writing focus dimension of our managing the mix and business all with truly our the profitability our attributes, is this appetite. mentioned monitor elements, in risk that line risk. expectations these we single

cases. stress risk against on We receive it also and we evaluate the focus price and the expected for

on the very writing. point with mix are that level writing So, would is we new that And purchase at aligned out XX:XX on mindset, are risk-adjusted which very with market. we based the are the our last comfortable production the I we returns

layered this So, that second risk higher low. our business amount is at think earnings extremely actually risk of was and our might about We remember layered it’s in early XXXX. slides, in risk I this and you XXXX number our disclosed and one is the layered to XX. of in XXXX, first quarter presentation of And than X.X% quarter Slide believe

trend. actually on it's a So, declining

Bose George

Thanks. helpful. just of back the very you're PMIERs actually you targeting? a ROEs? That's great. then like excess, ROE when lot right talk you so going discussion, a you how that Obviously, number normalized got to normalized a And think Okay, when range now, do think of PMIERs is you've like ROE kind treat about XX:XX you there excess about about that

Rohit Gupta

Yes. XX:XX

So, very good Bose, I think question.

pricing conditional I returns, we I view is think that pricing, a would on we when about mid-to-low-teen basis, think our our talking say. about gross are when

current at our as a to a PMIERs and in PMIERs of to transactions market returns. view] economic that that XXX% lot returns, capital we return. line, to [indiscernible] a reinsurance more cost XXX% for that of we certainty of of of it granular capital past, was is QX when in a in than range stated almost XX:XX and balance buffer, When have gross get XXXX market in a number that we is in expectations with our and as expectations that the of capital. about terms XXX%, XXX% In have we obviously, see the talk break premiums, perspective, all that and we benefit or or and XXXX. PMIERs are a accelerator view in economic we currently internal as buffer of of do an our and cost accounts, aligned capital, then, not as that XX:XX economic into time that range. on terms buffer, looking So buffer, that QX capital at our of are we XXX% looking view use losses. which And PMIERs generally the [capital the pre-pandemic sheet kind delivering So think from actually economic not takes [ph] well account lapse into PMIERs And from takes future we

our on as we cure expectations, the right is level COVID reevaluate So, business. GSE make back that see expectations, then right from still the as to look term, We determination considerations, customer we economy and XX:XX getting the that think activity different for near expectation delinquencies, rating what's would well that at in normal. as number agencies, and a including

Bose George

great. XX:XX you. Okay, Thank

Rohit Gupta

you. XX:XX Thank

Operator

XX:XX Thank you.

question with Partners. Our & next Geoffrey from comes Dowling Dunn

open. line is Your

Geoffrey Dunn

Good Thanks. XX:XX morning.

Rohit Gupta

XX:XXGood morning, Geoff.

Geoffrey Dunn

annual dividends, you to special management. introducing want be your special review? could augmenting your that dividends I dividend consider will common Dean, a When you an for a follow-up with semi-annual on plans consideration or be commentary XX:XX on capital do think

Dean Mitchell

It's that. a Geoff, question. good XX:XX appreciate

as basis. to about common think, a I of we the regular that a we're obviously quarterly initiation pivot thinking dividend on

basis semi-annual, special in when XX:XX circumstances this point on a microeconomic the that on the think will a being we and conditions, for the terms, circumstances dividend packed the XXXX, basis for lingering driven. accommodating think effects by environment and see see I if can it semi-annual I facts think annual than an I we're Again, of being semi-annual in what be are basis. at driven the thinking the is in of recovery ongoing time, with pandemic. specifically more driven we business

Geoffrey Dunn

great. Okay, XX:XX you. Thank

Dean Mitchell

welcome. You're XX:XX

Operator

Thank XX:XX you.

Bank Our next question comes Bhatia from of Mihir America. with

Your open. is line

Rohit Gupta

Mihir. morning, Good XX:XX

Mihir Bhatia

Thank XX:XX Good for you morning. my question. morning. Hi, taking good

but a are just at yield that the being forecasting on in premium and from of correctly? risk, know, different – back points going thing, of again could I a you right? just that proportion laid-off, us the ceded understand that basis about least has been good have line, million, pullback we gross the [indiscernible] laying maybe net help the right, to materially and that it, just past, maybe you actually, X standpoint, business the – it your on to reinsurance a net, more looks it like, and off a cost So, think be question, be premium in for from difficulty standpoint that given I just the premium which sure first about didn’t given increasing [ILMs] The will the Maybe want just but point yield second, or we [ph] one place. than forecasting I it with X guess, taken what make with just to

Dean Mitchell

XX:XX here – In thanks for the question.

the I think cost our from in the perspective. CRT generally cost is our coverage of capital low-to-middle single-digits of

kind I at the coverage uptick an general there's downward market. of capital. in cost think of conditional reinsurance height XX:XX we pandemic. cost time, cost been that Certainly the Since recovery saw in is, the in again, the of a of

I you're And generally conditional think I is we're conditions on securing a think normal to transfer again, back business the time pricing risk functioning at credit market. coverage. based

we generally of that as I with our that's is and historical what equation. so capital. the side see single-digit point, of about, do cost think costs kind think line our just I now rate XX:XX one you of think, in the cost low-to-mid

we On the volume the leverage. operating side at of the a ended equation, quarter XX%

in think of target generally higher the do a of we I our mid-XX% level. required covering PMIERs requirements, the, that's amount So, CRT PMIERs level – kind

of go could use risk the our transfer see as credit up you transfer credit continue we So, to of optimize the program. prospectively leverage risk

Mihir Bhatia

you. Thank XX:XX Understood.

to rate XQ understanding question are XX did second, your you maybe on, disclose and you back this Just sure remind is, original just know, want correctly. like I back can guess first you to estimation we for going in a the Slide XXXX? us, XQ make I claim

Dean Mitchell

we Yes, did Mihir. XX:XX

calendar tick-up chart. as right a as did for on towards between had on the delinquencies. see forbearance mix non-forbearance year we of X% kind COVID-related year and XXXX XXXX calendar X% of non-forbearance side to shifted That rate hand the claim can So, you in expectation that

Mihir Bhatia

XX:XX Right.

sure you impact understand, of XX%. make second, rates cure Cumulative So, on the like, XXXX a maybe for I know this that – of staying just we wanted to

I in imply had driven appreciation, so making the would of to XXXX you’ve rate X% So, claim timing good [XX%] we're – the releases in-part [ph] prices to and good cure reserve right be rate, approaching seeing going that momentum. home that, way clearly is guess bucket about largest by also think is

do close X%, those are, reserve all think pass what the quarter-over-quarter So, understand is, more cumulative of wrong? to some rates magic cure continue trigger I to rates. are [ph] kind and improvement of view continues releases you’re on see and to part if reserves but portfolio, the are XX% your up is hurdle, XX% want once cumulative best cure we some or something that understand that rates, potentially cure to I losses [we’re you like I reflect you cure X% about rates of in today where those your make sure probably I XX:XX thinking] likely

Dean Mitchell

XX:XX No, the you're right in think I framework.

we I needs COVID-related pandemic. I we're recognize the cure to delinquencies indicated, by think, date. that you do the to you know much ongoing the you be do encouraged like tempered on rates think by, unpredictability know of

demonstration resolution forbearance-related So, kind page as of of see approach would on more aggregate. do have, While know ultimate consider reserves managing the we cohorts, do XX:XX we're in what Mihir, and show really we and delinquencies. a to wait the I quarterly you of this a progress prudent type date, to

So, the inventory. across delinquent entire

XX% it lens, in aggregate, you're rate, think kind progress at I cohort important about think approach ultimate on that, up for that wouldn't would more I’d of cohort take for cohort, wait think right that XX:XX but if the and And through that across we that delinquent resolutions. in by so, it's to that so, looking towards of an And prudent more we be cure think entirety it XXXX that trigger the us, I population. about see

Rohit Gupta

the that of be of past would little because starts. And as month use program, dislocated to payments think kind changed saw add to good XX:XX said, then XX we program our And due then these XX:XX a in in we then XX would with moratorium. Delta And we we and to traditionally, be that reserve good Dean’s and more that and part this that Yes. activity. forbearance as are reserves, traditional processes reserves, felt Omicron. aligned we bit think early Dean we of the to much about were, we with months about about foreclosure things reserves that reserving those again variant number I down all obviously then with foreclosure adequacy forbearance of triggers we've use XXXX So we for and we Mihir just are cure the saw point and felt think prudent pandemic we seen trying confident as are in confident that as

get just that's I you and optimistic a dots little that looking the in the we So, the a we for just thing are would think for do connecting market. want more because certainty is then last get to surprise bit

Mihir Bhatia

for so the you Right. questions. taking much fair. That's Thank XX:XX

Rohit Gupta

XX:XX Thanks, Mihir.

Operator

XX:XX Thank you.

Our from next Morgan. question Rick comes with JP Shane

open. is line Your

Rick Shane

XX:XX interplay revisit and the last just couple in significantly like between you What are can Thanks Most morning. that fairly talk severity? asked little of but claims, and been a taking and how the have and quarters in down of really the that guys. second XXXX this for impacts the the just about been you've to implications year. my bit answered, the obviously the frequency Because your severities reserves? questions for Hey have seen half

Dean Mitchell

XX of months. months. kind these perspective going Certainly, make claims. the seeing allows think I referenced of about question, by for in beyond activity really I last remain, a again, have outside to experience to prevalence Rick then XX any XX the of delinquent that question negative and and that prevented even in of we disruption or certain delinquencies months borrowers extended certain payments forbearance be period as from Yes, foreclosure to like Rohit the to XX:XX you're that, been you has So, think can of an our forbearance. addition quarter, borrowers considered payments last that state the that the kind And really cure of disrupted any talked are their claims consequences for without even has credit you elongation perspective of And in a XX:XX inside forbearance forbearance in moratorium from – in is but what that reporting up answer. thanks see our

it's think influx still function XX delinquent a an Rick, from our you'll to the perspective of but I months that borrowers rate, also as that allows So, a foreclosure cure X elevated another what after to then functioning claim to Now, process. think pick of and I progress process, is belief ones to remains delinquency start disruption of normal XX:XX we'll more cure resolves that forbearance disruption the our to see, that will see their financial unwinds. you months that up claims to start ultimately and probably through at reestablish activity, footing

Rohit Gupta

have – terms claims, is delinquencies of in he prices many his a means things number. quarter while this then So actually I of footnote on actual XX:XX we price non-performing Dean’s to of paid, XX% down And of pulling that one our equity. in thing, end GSE. XX% of at add home for and So, have least we point there claims of that. that something And the delinquency XX:XX in at would average don't that on into that Rick. of encouraged our is fourth front second it remarks didn’t just loan by which we deals, are of kind with it in does made because at third the supplement, pay claims, includes artificially settlement are our was Yes. our not delinquencies, point thing the quarter have too equity do benefit the had appreciation claim base. prepared we claim we a our read of that on two fourth quarter much One paid XX:XX quarterly look in that seeing that not front amount you financial that number when claim

Rick Shane

any it risk bit Lot in you much quarter, $X.XX there? which unrealized looking thought additional of of losses helpful. as into some a period hedging am looks of [ph], [long that One at of look had enter other great. portfolio, very investment in [ph] is curious of $X.XX we at on XX Obviously, I sort million of we dive more It's about Okay, information there thing, duration] the there. portfolio, [hawkish] the to XX:XX when a out little a in value. like impact book your is the of

Dean Mitchell

at you gains Yeah, XX:XX talked unrealized end the our about, so down year. million amount to million $XXX $XX the came around about the of quarter-over-quarter Rick,

maintaining rates We assets gains. in we not our gain optimal a interest uptick a not ultimately liquidity, We the decline position. corresponding That's portfolio, investment have more hedging in and unrealized conservative locking tertiary preserving discussed or and portfolio necessarily more, is protecting our on position capital, in radar. potential not under our been management, risk-adjusted about in in unrealized of returns maintaining the kind think think pursuing the, that's on necessarily something

Rohit Gupta

is XX:XX would long. the actually I say of that duration our portfolio not And

compare more with under we our our If scenario. in [ph], matching [peer duration of portfolio line you to stress of actually our are set] kind liability

getting paid something it Rick not, that we that look if basis So, risk. for we at we that extending duration, additional definitely a then is take we that have regular and that do on not are

Rick Shane

XX:XX Okay, great. Thank you guys.

Operator

Thank XX:XX you.

Our next question BTIG. comes with from Ryan Gilbert

open. is line Your

Ryan Gilbert

Good for Hi, Thanks XX:XX thanks. taking morning everyone. my questions.

I extent in First the that it's the in break if one wondering the And expected is on to possible. NIW, number I'm came quarter. better you could out than

the in versus with Your a just up NIW performance quarter existing customers with the you relationship reactivating key between, customer, overall market. a doubling said, as

would details be any helpful? So,

Rohit Gupta

you, Thank Ryan. XX:XX

we true key was shared in give and marketplace of a having in account we proposition. is that years IPO. business, of pause sensitivity would much I but to We too due that a of the for competitiveness have probably information the ratings us customer, in about full a effectively our strong the after our that value example upside relationships, XX:XX So, terms believe and unlocking as customer that competing post would the are given previously post-IPO that ratings, value reactivation potential market our we post five say a confidentiality the

was about good to are we strong we XX:XX we and IPO. As to was through say a it reactivated position, about speaking, post-IPO. we which tough our our perspective, had very Broadly share to MI we competitive lot rising, to account drive shared XX% refi in first differentiated given seems on strong very comment be it tailwinds XXX purchase that, closely our market competitive that disclose point, loans, strategy because XX:XX from aligned already with market reactivation, buyer and still because while specifically the talked received market but market, an during XXXX X confident in addition position side, that have further, gives has this out that received we demand expanded every are like example, X. that and reporting our And comment And solutions, and that relationships, more do would I relationship. very loans, key more very XXX to share, a interest XXXX decline home position than in in MI but whereas customer thought I but first-time to are the to loans less and the XX our and XX relationship purchase we early that in we market might concentration market to strength our at also to much rates because the feel it's purchase that seems helpful good MI because business XXXX long-term the at increased company of our would of market XX:XX So, our –towards is strong. good into is continues us industry, of some as shift actually even in loans purchase that purchase out that we but refi every industry going XXXX like the is could for

about potential, are we and at we NIW look optimistic when still So, XXXX beyond.

Ryan Gilbert

a anything you on a and that by the Do DQs is basis COVID to do just great. new driven that you. looks – percentage out variant – call up that It new delinquency that's are as question seasonality? Okay, Thank being XX:XX that's delinquencies. you on of a just wondering the of absolute as new My think or on and new ticked second is like think want in-force I'm else percentage policies they primarily side? you an

Dean Mitchell

are XX:XX XXX about quarter-over-quarter. delinquencies up Yeah, new Ryan,

attribution but numbers, that delinquencies in important the I talking was some small frame in-part natural areas. we from did increase story, to still driven give it's disasters natural FEMA-impacted by think remarks relatively prepared increase the disaster, the from in we're about So,

in Louisiana, about through Ida we new August, those, the had books. and from wildfires in newest to addition XX:XX Hurricane October. about then our think And delinquencies think So, more California September,

very of their XXXX curve. are begin normal think loss These the XXXX progression to are books and perform So, that well. starting to continuing

and XX% pre-pandemic as development to In through same books they loss fact they're than delinquency normal better at performing the development their but pattern but those are that XXX So, age XX% the delinquencies. really will continue time think drivers experience expected. their aging, I as it’s they increase associated XX:XX new increase, note with just of important two is to the that

again, pretty small So, numbers.

Ryan Gilbert

the Right. for very Absolutely. much time. XX:XX I appreciate Thanks it.

Dean Mitchell

XX:XX Thanks, Ryan.

Operator

Thank XX:XX you.

a follow-up with Dunn & have We from Dowling Partners. Geoffrey

open. Your line is

Geoffrey Dunn

XX:XX from your wanted Thanks. now go after. to volatility. in and about is Dean, rate I the risk to and Right the premium about think XX% future of XXXX back force

mentioned, but there’s issue decline shift should towards product everybody. keeps going you mix also quarter-to-quarter as that this So, mix for obviously XXX%, shifts

writing does we've the given dealing more level quarter-to-quarter after product base mix this any the vintage the range where a much last changing, as the your given work four years? quarter mix? about around from what think shifts versus three, of at have what and done Is rate become you quarter there shift for shift you're development with historically, XXXX about So, we big And vintage that? roughly see how in you that been

Dean Mitchell

Yeah XX:XX Good Geoff. question.

for and extremely on market base we I metric, specific think difficult rate is timing driven mix quantum that there's provide composition, embedded in to, that lot guidance where happening. refi fact the changes purchase that really it's items reasons credit of that mentioned given the it's lapse a earlier the kind of lapsing, –

the premium from lapsing the a book hypothesis and rate think given the older dilution or to position market that. of dilution than lapse-driven will years. leaves that impact and it’s rate drivers I course through lapse I think of years, not where has burn-out] various all true on XXXX to perspective, XXXX the today of is our less providing of agree we're now starting less two I start base lapse-driven books to changes portfolio to that there have to the rate over guidance is get embedded in subject books, that that simply a that XX:XX older XX% much the last with is do So, comprised [ph] just So, been lesser in [decay, XX:XX prospectively. book the

Geoffrey Dunn

XX:XX All right.

changes, card on cause on can but and the more but quarter? So, ignoring basis pricing move always apples-to-apples rate, an basis simple on the than quarter basis see product evolution can't we there’s apples-to-apples guidance, rate to because XXX been basis historically, obviously, point base it point, mix XXX

Dean Mitchell

it don't that I can [ph] XX:XX know you. I for [dimension]

I think it quarter-to-quarter. a impact has varied

you. market drivers a to are let if lump, in for due point dimensioning that think that look be would time, through Again, I the due all think maybe challenge at we'll I that, and quarter-to-quarter, more embedded us time, through is a to variation through various dimension the but take this but see time take in a we that time. at can that look

Rohit Gupta

a you don't look in our it onwards, going number, basis right at based that up basis it XX:XX see think base go volatility in XX direction, was different is it some directions. XXX base dilution think, one in but goes think percentages, numbers, lapse terms rate like going rate up previously if of XX:XX quarters disclosed XXXX you at looking quarter third where your everything like down is we you there just in points would on direction. in volatility that Geoff quantitative and and then at points, just I the have to driven and it would give, So, down question in I is that I you if look do while if our goes expect, answer

come at see if can history. thumb rule you and find will of looking we we offline back to some So,

Dean Mitchell

Yeah, my the be, have would prospectively. of prospectively, concern effect will on increase the think to up-tick expect going in thumb market potential the to rule the XX:XX rates, with an magnitude of changes. with we persistency the changes so, I of the some That's in interest

the a That's transition. the concern is, market. an So, a have my to as has forward, and come back effect there going to past from transition And historically, we'll on translate projected able be but we a look thumb per I'm market XX:XX a Geoff, in [what [ph] going not look to go to take purchase see with. sure what You're to of have a happened that would] refi rule let us se. isn't

Geoffrey Dunn

to the XX:XX example, Yes, thumb it's, that contrary quarter, But dominated XX seeing is still mix mean, and would necessarily rate by your you if with this look shift, your quarter down we're think singles the rule bit, vintage. amortization, think up, be [helpful] I agree getting would I DTI again, that get [ph]. up, much this quarter, plus dangerous, environment. not XX eventually little Well, and about we're we're go of to at of first going talking you. I but your your for into saw be because a we that that drop as if I coming vintage go

the the And this so to point XX:XX becomes where than figure inflection it written rate. the about rather that get where assess in we just can vintage-mix trying we in your And out to move quarter shift. business directionally,

Dean Mitchell

mentioned, an but look back see, go Rohit and which question. a don't and XX:XX prospectively, a Appreciate back is take I a quantitative have open take to answer, applicable look don't also go We and we’ll is think – question. the as it

Geoffrey Dunn

XX:XX Great. Thanks.

Dean Mitchell

Geoff. Thanks XX:XX

Rohit Gupta

you. Thank XX:XX

Operator

back Thank Rohit to questions call remarks. I’d the Gupta like XX:XX closing for turn other in I'm queue. to And no you. the showing

Rohit Gupta

and Thank with wrap you and you, working [ph], you. We'll you the XX:XX call here. we in to [Catherine] this thank your appreciate Enact, all. Thank year. throughout look We interest forward up

Operator

today's XX:XX call. you This concludes for Thank participating. conference

disconnect. now may You