RADIAN GROUP INC

We operate in the highly competitive U.S. mortgage insurance industry. Our competitors primarily include other private mortgage insurers and federal and state governmental agencies, principally the FHA and VA.

Including us, there are currently six active participants in the private mortgage industry that are approved and eligible to write business for the GSEs. The other participants are:

■Arch Capital Group Ltd. (includes both Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company);

■Enact Holdings, Inc. (formerly Genworth Mortgage Holdings, Inc.);

■Essent Group Ltd.;

■MGIC Investment Corporation; and

■NMI Holdings, Inc.

We compete directly with other private mortgage insurers primarily on the basis of price, underwriting guidelines, overall service, customer relationships, perceived financial strength (including comparative credit ratings) and reputation. Overall customer service competition in our mortgage insurance business is based on, among other things, effective and timely delivery of products, timeliness of claims payments, customer connectivity, timely and accurate administration of policies, training, loss mitigation efforts and management and field service expertise.

For Radian, customer service also includes our ability to offer products and services through our other businesses that are relevant to our mortgage insurance customers and complement our mortgage insurance products.

Pricing has always been competitive in the mortgage insurance industry, but as discussed under “Mortgage Insurance—Pricing,” with the increased prevalence of granular, “black box” pricing and custom rate cards, and the greater uniformity of master policy terms throughout the industry, pricing has become the predominant competitive market factor for private mortgage insurance. We monitor various competitive and economic factors while seeking to enhance the long-term value of our mortgage insurance portfolio by balancing credit risk, profitability, and volume and capital considerations in developing our pricing strategies.

We establish our premium rates and seek to write a mix of business to manage the risk/return profile and maximize the long-term economic value of our mortgage insurance portfolio, taking into consideration the competitive environment. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage Insurance—Premiums.” Based on publicly available information, we estimate that our share of NIW within the private mortgage insurance market was approximately 19% for 2023.

Certain of our private mortgage insurance competitors currently have better financial strength ratings than we have and/or are subsidiaries of larger corporations, which may give them a competitive advantage.

Private mortgage insurance competes for a share of the insurable mortgage market with the single-family mortgage insurance programs of the FHA and VA. Private mortgage insurance execution competes with the programs offered by the FHA on the basis of loan limits, pricing, credit guidelines, terms of our insurance policies and loss mitigation practices.

We believe that better execution for borrowers with higher FICO scores, in conjunction with the preference of certain lenders to execute through the GSEs, have served as competitive advantages for private mortgage insurance as compared to FHA insurance. The FHA’s share of the total insured mortgage market (which includes FHA, VA and private mortgage insurers) was reported to be 34% in 2023, compared to 27% in 2022. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage Insurance—NIW and Related Drivers.”

In February 2023, the FHA reduced its annual mortgage insurance premium by 0.30% for most new borrowers. While this pricing change did not have a material impact on our NIW volumes, the FHA could institute further pricing changes in the future, including additional changes to its annual premiums, a reduction in its upfront premiums and/or the elimination of the life-of-loan premium requirement for most FHA insured loans. It is uncertain if and when the FHA may pursue any additional pricing or other actions and what form they may take; however, any change that would improve FHA execution compared to execution through the GSEs with private mortgage insurance could negatively impact our NIW volume.

Table of ContentsGlossaryPart I. Item 1. Business

If the competitive position of the FHA is enhanced, it could have a negative effect on our ability to compete with the FHA. See “Regulation—Federal Regulation—Housing Finance Reform and the GSEs’ Business Practices” for a discussion of factors that could enhance the FHA’s competitive position relative to private mortgage insurance.

We also face competition from the VA. Based on publicly available information, the VA’s share of the total insured mortgage market was 22% in 2023, compared to 25% in 2022. We believe that the VA remains a strong participant in the overall market because of the number of borrowers that are eligible for the VA’s program, and because the VA insures 100% LTV loans, which is unavailable through private mortgage insurance and the FHA, and charges a one-time funding fee that can be included in the loan amount with no separate monthly payment.

In addition, as market conditions change, alternatives to traditional private mortgage insurance may become more prevalent, which could reduce the demand for private mortgage insurance. These alternatives have included structures commonly referred to as “investor paid mortgage insurance” in which affiliates of traditional mortgage insurers that are not subject to the PMIERs directly insure the GSEs against loss. For additional information about these structures, see “Regulation—Federal Regulation—Housing Finance Reform and the GSEs’ Business Practices.”

It is difficult to predict what other types of credit risk transfer transactions and structures or other forms of credit enhancement, including GSE-sponsored alternatives to traditional mortgage insurance, might be used in the future. If any of these alternatives were to displace standard primary loan level private mortgage insurance, the amount of insurance we write may be reduced and our future prospects could be negatively impacted.

In “Item 1A. Risk Factors,” see “Our mortgage insurance business faces intense competition.”

We believe that through our homegenius segment we are positioned as a unique provider of an array of products and services to participants across the real estate value chain. While we are not aware of any other single company that provides a comparable range of services to the residential mortgage and real estate industries, our homegenius businesses have multiple significant competitors within each of its individual lines of business.

Significant competitors for our homegenius businesses include:

Title. The market for traditional title services is highly concentrated among four large companies with national scope: Fidelity National Financial, Inc.; First American Financial Corporation; Old Republic International Corporation; and Stewart Information Services Corporation. In addition, we compete with smaller national title service providers and a host of additional regional providers. In addition, the introduction of alternatives to traditional title insurance into the market such as the offering of attorney opinion letters in lieu of traditional title policies, which is being accepted by the GSEs, subject to certain conditions, could provide additional competition in the future. See “Regulation—Federal Regulation—Housing Finance Reform and the GSEs’ Business Practices” for additional information.

Real Estate and Real Estate Technology. Real estate technology and software companies such as: Ice Mortgage Technology; ClearCapital.com, Inc.; CoreLogic, Inc.; HouseCanary, Inc.; and Xome Inc.

Across all business lines in our homegenius segment, we believe we compete on the basis of technology, data access, industry expertise, price, service levels and relationships.