RADIAN GROUP INC

Our investment portfolio is our primary source of claims paying resources and also impacts our earnings. We seek to manage our investment portfolio within our targeted risk and return tolerances based on our current liability projections and business and economic outlook to maintain sufficient liquidity levels to satisfy our current and future operating requirements and other financial needs. Our investment strategy is developed by taking into consideration applicable investment restrictions, limitations and conditions imposed on investments held by our regulated entities, and in particular, state limitations and PMIERs rules applicable to Radian Guaranty, which holds the majority of our total investment portfolio.

Our investment strategy uses an asset allocation methodology that takes into consideration regulatory constraints, our business environment and consolidated risks as well as current investment conditions. With respect to our fixed income investments, the following internal investment policy guidelines, among others, are applied at the time of investment and continually monitored.

Our portfolio has been constructed to maximize long-term expected returns while maintaining an acceptable risk level. Our investment objectives are to utilize appropriate risk management oversight to optimize after-tax returns, while preserving capital. We calibrate the level of our short-term investments based on our overall investment portfolio duration, risk appetite and expected short-term cash requirements. In “Item 1A. Risk Factors,” see “Our success depends, in part, on our ability to manage risks in our investment portfolio.”

Our investment policies and strategies are subject to change, depending on business needs, current and potential future regulatory requirements, economic and market conditions and our then-existing or anticipated financial condition and operating requirements, including our current and future tax positions. The investments held at our insurance subsidiaries are subject to insurance regulatory requirements applicable to such insurance subsidiaries and investments held by Radian Guaranty are subject to the PMIERs. For example, insurance regulatory requirements address the types of assets that may be reported as admitted assets for statutory reporting purposes and limit how a mortgage insurer may invest its contingency reserve, and the PMIERs specify which type of assets are eligible to be counted as Available Assets. See “Regulation—Federal Regulation—GSE Requirements for Mortgage Insurance Eligibility.”

Oversight responsibility of our investment portfolio rests with management, and allocations are set by periodic asset allocation studies, calibrated by risk and after-tax return considerations. The risks we consider include, among others, duration, convexity, liquidity, market, sector, structural, interest rate and credit risks. As of December 31, 2024, we internally managed 11% of the investment portfolio (the portion of the portfolio largely consisting of U.S. Treasury securities, money market funds, equities, mortgage insurance-linked notes and other mortgage related assets, and certain exchange-traded funds), with the remainder primarily managed by three external managers. External managers are selected by management based primarily upon their ability to meet our investment goals and objectives, based upon factors such as historical returns and the quality and stability of their management teams. Management’s selections of external managers are presented to, approved and monitored by the Finance and Investment Committee of our board of directors.

At December 31, 2024, our investment portfolio, including securities loaned to third-party borrowers under securities lending agreements, had a cost basis of $6.3 billion and a carrying value of $5.9 billion. At December 31, 2024, 97% of our investment portfolio was rated investment grade. The weighted-average duration of the assets in our investment portfolio as of December 31, 2024, was 4.3 years. For additional information about our investment portfolio, see “Item 7. Management’s

Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Investment Portfolio,” as well as Notes 5 and 6 of Notes to Consolidated Financial Statements.

Although managed separately from the investment portfolio discussed above, beginning in 2022, we also purchase mortgage loans in our mortgage conduit for near-term resale or securitization. See “All Other—Overview” and Note 7 of Notes to Consolidated Financial Statements for additional information on this business. In “Item 1A. Risk Factors,” see also “We face risks associated with our Mortgage Conduit business.”