Essent Group Ltd.

Previous wording

The following discussion should be read together with the “Selected Financial Data” and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K as of and for the year ended December 31, 2024 as filed with the Securities and Exchange Commission and referred to herein as the “Annual Report,” and our condensed consolidated financial statements and related notes as of and for the three months ended March 31, 2025 included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which we refer to as the “Quarterly Report.” In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report and Part I, Item 1A “Risk Factors” in our Annual Report and Part II, Item 1A “Risk Factors” in this Quarterly Report. We are not undertaking any obligation to update any forward-looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward-looking statements or other statements were made.

Current wording

The following discussion should be read together with the “Selected Financial Data” and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K as of and for the year ended December 31, 2024 as filed with the Securities and Exchange Commission and referred to herein as the “Annual Report,” and our condensed consolidated financial statements and related notes as of and for the three and six months ended June 30, 2025 included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which we refer to as the “Quarterly Report.” In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report and Part I, Item 1A “Risk Factors” in our Annual Report and Part II, Item 1A “Risk Factors” in this Quarterly Report. We are not undertaking any obligation to update any forward-looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward-looking statements or other statements were made.

Previous wording

Essent Guaranty, Inc., our wholly-owned mortgage insurance subsidiary which we refer to as "Essent Guaranty," is approved by Fannie Mae and Freddie Mac and licensed to write coverage in all 50 states and the District of Columbia. Our mortgage insurance operations generated new insurance written ("NIW") of approximately $9.9 billion and $8.3 billion for the three months ended March 31, 2025 and 2024, respectively. The financial strength ratings of Essent Guaranty are A3 with a positive outlook by Moody’s Investors Service (“Moody's”), A- with a stable outlook by S&P Global Ratings (“S&P”) and A (Excellent) with a stable outlook by A.M. Best Ratings Services, Inc. ("AM Best").

Current wording

Essent Guaranty, Inc., our wholly-owned mortgage insurance subsidiary which we refer to as "Essent Guaranty," is approved by Fannie Mae and Freddie Mac and licensed to write coverage in all 50 states and the District of Columbia. Our mortgage insurance operations generated new insurance written, or NIW, of approximately $12.5 billion and $22.5 billion for the three and six months ended June 30, 2025, respectively, compared to approximately $12.5 billion and $20.8 billion for the three and six months ended June 30, 2024, respectively. The financial strength ratings of Essent Guaranty are A2 with a stable outlook by Moody’s Investors Service (“Moody's”) (up from A3 with a positive outlook as a result of an upgrade by Moody’s announced on August 6, 2025), A- with a stable outlook by S&P Global Ratings (“S&P”) and A (Excellent) with a stable outlook by A.M. Best Ratings Services, Inc. ("AM Best").

Previous wording

Through our wholly-owned Bermuda-based subsidiary, Essent Reinsurance Ltd., which we refer to as "Essent Re", we reinsure U.S. mortgage risk in the GSE credit risk transfer market and provide underwriting consulting services to third-party reinsurers. As of March 31, 2025, Essent Re provided insurance or reinsurance relating to GSE risk share and other reinsurance transactions covering approximately $2.2 billion of risk. Essent Re also reinsures Essent Guaranty’s NIW under a quota share reinsurance agreement. The insurer financial strength ratings of Essent Re are A- with a stable outlook by S&P and A (Excellent) with a stable outlook by AM Best.

Current wording

Through our wholly-owned Bermuda-based subsidiary, Essent Reinsurance Ltd., which we refer to as "Essent Re", we reinsure U.S. mortgage risk in the GSE credit risk transfer market and provide underwriting consulting services to third-party reinsurers. As of June 30, 2025, Essent Re provided insurance or reinsurance relating to GSE risk share and other reinsurance transactions covering approximately $2.3 billion of risk. Essent Re also reinsures Essent Guaranty’s NIW under a quota share reinsurance agreement. The insurer financial strength ratings of Essent Re are A- with a stable outlook by S&P and A (Excellent) with a stable outlook by AM Best.

Previous wording

We have a highly experienced, talented team with 555 employees as of March 31, 2025. Our holding company and reinsurance business are domiciled in Bermuda. Our U.S. mortgage insurance and title insurance operations are headquartered in Radnor, Pennsylvania.

Current wording

We have a highly experienced, talented team with 521 employees as of June 30, 2025. Our holding company and reinsurance business are domiciled in Bermuda. Our U.S. mortgage insurance and title insurance operations are headquartered in Radnor, Pennsylvania.

Previous wording

Mortgage insurance premiums are paid either on a monthly installment basis (“monthly premiums”), in a single payment at origination (“single premiums”), or in some cases as an annual premium. For monthly premiums, we receive a monthly premium payment which is recorded as net premiums earned in the month the coverage is provided. Monthly premium payments are based on the original mortgage amount rather than the amortized loan balance. Net premiums written may be in excess of net premiums earned due to single premium policies. For single premiums, we receive a single premium payment at origination, which is recorded as “unearned premium” and earned over the estimated life of the policy, which ranges from 36 to 156 months depending on the term of the underlying mortgage and loan-to-value ratio at date of origination. If single premium policies are cancelled due to repayment of the underlying loan and the premium is non-refundable, the remaining unearned premium balance is immediately recognized as earned premium revenue. Substantially all of our single premium policies in force as of March 31, 2025 were non-refundable. Premiums collected on annual policies are recognized as net premiums earned on a straight-line basis over the year of coverage. For the three months ended March 31, 2025 and 2024, monthly premium policies comprised 99% and 98% of our NIW, respectively.

Current wording

Mortgage insurance premiums are paid either on a monthly installment basis (“monthly premiums”), in a single payment at origination (“single premiums”), or in some cases as an annual premium. For monthly premiums, we receive a monthly premium payment which is recorded as net premiums earned in the month the coverage is provided. Monthly premium payments are based on the original mortgage amount rather than the amortized loan balance. Net premiums written may be in excess of net premiums earned due to single premium policies. For single premiums, we receive a single premium payment at origination, which is recorded as “unearned premium” and earned over the estimated life of the policy, which ranges from 36 to 156 months depending on the term of the underlying mortgage and loan-to-value ratio at date of origination. If single premium policies are cancelled due to repayment of the underlying loan and the premium is non-refundable, the remaining unearned premium balance is immediately recognized as earned premium revenue. Substantially all of our single premium policies in force as of June 30, 2025 were non-refundable. Premiums collected on annual policies are recognized as net premiums earned on a straight-line basis over the year of coverage. For the six months ended June 30, 2025 and 2024, monthly premium policies comprised 99% and 98% of our NIW, respectively.

Previous wording

The percentage of IIF that remains on our books after any 12-month period is defined as our persistency rate. Because our insurance premiums are earned over the life of a policy, higher persistency rates can have a significant impact on our profitability. The persistency rate on our portfolio was 85.7% at March 31, 2025. Generally, higher prepayment speeds lead to lower persistency.

Current wording

The percentage of IIF that remains on our books after any 12-month period is defined as our persistency rate. Because our insurance premiums are earned over the life of a policy, higher persistency rates can have a significant impact on our profitability. The persistency rate on our portfolio was 85.8% at June 30, 2025. Generally, higher prepayment speeds lead to lower persistency.

Previous wording

•the distribution of claims over the life of a book. As of March 31, 2025, 38% of our IIF relates to business written since January 1, 2023 and was less than three years old. As a result, based on historical industry performance, we expect the number of defaults and claims we experience, as well as our provision for losses and loss adjustment expenses ("LAE"), to increase as our portfolio seasons. See “— Mortgage Insurance Earnings and Cash Flow Cycle” below.

Current wording

•the distribution of claims over the life of a book. As of June 30, 2025, 41% of our IIF relates to business written since January 1, 2023 and was less than three years old. As a result, based on historical industry performance, we expect the number of defaults and claims we experience, as well as our provision for losses and loss adjustment expenses ("LAE"), to increase as our portfolio seasons. See “— Mortgage Insurance Earnings and Cash Flow Cycle” below.

Previous wording

Based upon our experience and industry data, claims incidence for mortgage insurance is generally highest in the third through sixth years after loan origination. As of March 31, 2025, 38% of our IIF relates to business written since January 1, 2023 and was less than three years old. Although the claims experience on new insurance written by us to date has been favorable, we expect incurred losses and claims to increase as a greater amount of this book of insurance reaches its anticipated period of highest claim frequency. The actual default rate and the average reserve per default that we experience as our portfolio matures is difficult to predict and is dependent on the specific characteristics of our current in-force book (including the credit score of the borrower, the loan-to-value ratio of the mortgage, geographic concentrations, etc.), as well as the profile of new business we write in the future. In addition, the default rate and the average reserve per default will be affected by future macroeconomic factors such as housing prices, interest rates and employment.

Current wording

Based upon our experience and industry data, claims incidence for mortgage insurance is generally highest in the third through sixth years after loan origination. As of June 30, 2025, 41% of our IIF relates to business written since January 1, 2023 and was less than three years old. Although the claims experience on new insurance written by us to date has been favorable, we expect incurred losses and claims to increase as a greater amount of this book of insurance reaches its anticipated period of highest claim frequency. The actual default rate and the average reserve per default that we experience as our portfolio matures is difficult to predict and is dependent on the specific characteristics of our current in-force book (including the credit score of the borrower, the loan-to-value ratio of the mortgage, geographic concentrations, etc.), as well as the profile of new business we write in the future. In addition, the default rate and the average reserve per default will be affected by future macroeconomic factors such as housing prices, interest rates and employment.

Previous wording

On September 26, 2024, Hurricane Helene made landfall and caused property damage in certain counties in Florida, Georgia, South Carolina, North Carolina, Tennessee and Virginia. On October 9, 2024, Hurricane Milton made landfall, causing damage in certain counties in Florida. Loans in default at December 31, 2024 included 2,119 defaults that we identified as hurricane-related defaults. Based on prior industry experience, we expect the ultimate number of hurricane-related defaults that result in claims will be less than the default-to-claim experience of non-hurricane-related defaults. In addition, 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. Accordingly, when establishing our loss reserves as of December 31, 2024, we applied a lower estimated claim rate to new default notices received in the fourth quarter of 2024 from the affected areas than the claim rate we apply to other notices in our default inventory. The impact on our reserves in future periods will be dependent upon the performance of the hurricane-related defaults and our expectations for the amount of ultimate losses on these delinquencies. As of March 31, 2025, the reserves established for the Hurricane Milton and Helene defaults are materially unchanged from December 31, 2024.

Current wording

On September 26, 2024, Hurricane Helene made landfall and caused property damage in certain counties in Florida, Georgia, South Carolina, North Carolina, Tennessee and Virginia. On October 9, 2024, Hurricane Milton made landfall, causing damage in certain counties in Florida. Loans in default at December 31, 2024 included 2,119 defaults that we identified as hurricane-related defaults. Based on prior industry experience, we expect the ultimate number of hurricane-related defaults that result in claims will be less than the default-to-claim experience of non-hurricane-related defaults. In addition, 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. Accordingly, when establishing our loss reserves as of December 31, 2024, we applied a lower estimated claim rate to new default notices received in the fourth quarter of 2024 from the affected areas than the claim rate we apply to other notices in our default inventory. The impact on our reserves in future periods will be dependent upon the performance of the hurricane-related defaults and our expectations for the amount of ultimate losses on these delinquencies. As of June 30, 2025, the reserves established for the Hurricane Milton and Helene defaults are materially unchanged from December 31, 2024 as this amount continues to be our best estimate of the ultimate losses to be incurred for claims associated with those defaults.

Previous wording

As more fully described in Note 4 to our condensed consolidated financial statements, at March 31, 2025, we had approximately $1.5 billion of excess of loss reinsurance covering NIW from January 1, 2018 through August 31, 2019 and August 1, 2020 through December 31, 2024 and quota share reinsurance on portions of our NIW effective September 1, 2019 through December 31, 2020 and January 1, 2022 through December 31, 2024. The impact on our reserves in future periods will be dependent upon the amount of delinquent notices received from loan servicers, the performance of defaults and our expectations for the amount of ultimate losses on these delinquencies.

Current wording

As more fully described in Note 4 to our condensed consolidated financial statements, at June 30, 2025, we had approximately $1.4 billion of excess of loss reinsurance covering NIW from January 1, 2018 through August 31, 2019 and August 1, 2020 through December 31, 2024 and quota share reinsurance on portions of our NIW effective September 1, 2019 through December 31, 2020 and January 1, 2022 through December 31, 2025. The impact on our reserves in future periods will be dependent upon the amount of delinquent notices received from loan servicers, the performance of defaults and our expectations for the amount of ultimate losses on these delinquencies.

Previous wording

Although claims against title insurance policies can be reported relatively soon after the policy has been issued, claims may also be reported many years later. By their nature, title claims are often complex, vary greatly in dollar amounts and are affected by economic and market conditions, as well as the legal environment existing at the time of settlement of the claims.

Current wording

Although claims against title insurance policies can be reported relatively soon after the policy has been issued, claims may also be reported many years later. By their nature, title claims are often complex, vary greatly in dollar amounts and are affected by economic and market conditions, as well as the legal environment existing at the time of settlement of the claims. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims and other factors.

Previous wording

Our most significant expense is compensation and benefits for our employees, which represented 56% of other underwriting and operating expenses for the three months ended March 31, 2025, compared to 52% of other underwriting and operating expenses for the three months ended March 31, 2024. Compensation and benefits expense includes base and incentive cash compensation, stock compensation expense, benefits and payroll taxes.

Current wording

Our most significant expense is compensation and benefits for our employees, which represented 49% and 53% of other underwriting and operating expenses for the three and six months ended June 30, 2025, respectively, compared to 50% and 51% of other underwriting and operating expenses for the three and six months ended June 30, 2024, respectively. Compensation and benefits expense includes base and incentive cash compensation, stock compensation expense, benefits and payroll taxes.

Previous wording

As discussed above, mortgage insurance premiums we collect and earn are generated based on our IIF, which is a function of our NIW and cancellations. The following table includes a summary of the change in our IIF for the three months ended March 31, 2025 and 2024 for our U.S. mortgage insurance portfolio. In addition, this table includes our RIF at the end of each period.

Current wording

As discussed above, mortgage insurance premiums we collect and earn are generated based on our IIF, which is a function of our NIW and cancellations. The following table includes a summary of the change in our IIF for the three and six months ended June 30, 2025 and 2024 for our U.S. mortgage insurance portfolio. In addition, this table includes our RIF at the end of each period.

Previous wording

As of March 31, 2025, the net risk in force for Essent Guaranty was $35.0 billion and its statutory capital was $3.6 billion, resulting in a risk-to-capital ratio of 9.6:1. The amount of capital required varies in each jurisdiction in which we operate; however, generally, the maximum permitted risk-to-capital ratio is 25.0 to 1. State insurance regulators have continued to examine their respective capital rules to determine whether, in light of the 2007-2008 financial crisis, changes are needed to more accurately assess mortgage insurers' ability to withstand stressful economic conditions. As a result, the capital metrics under which they assess and measure capital adequacy may change in the future. Independent of the state regulator and GSE capital requirements, management continually assesses the risk of our insurance portfolio and current market and economic conditions to determine the appropriate levels of capital to support our business.

Current wording

As of June 30, 2025, the net risk in force for Essent Guaranty was $34.0 billion and its statutory capital was $3.7 billion, resulting in a risk-to-capital ratio of 9.2:1. The amount of capital required varies in each jurisdiction in which we operate; however, generally, the maximum permitted risk-to-capital ratio is 25.0 to 1. State insurance regulators have continued to examine their respective capital rules to determine whether, in light of the 2007-2008 financial crisis, changes are needed to more accurately assess mortgage insurers' ability to withstand stressful economic conditions. As a result, the capital metrics under which they assess and measure capital adequacy may change in the future. Independent of the state regulator and GSE capital requirements, management continually assesses the risk of our insurance portfolio and current market and economic conditions to determine the appropriate levels of capital to support our business.

Previous wording

Net premiums earned for the three months ended March 31, 2025 were largely unchanged compared to the three months ended March 31, 2024. For more information, see Net Premiums Written and Earned under “Results of Operations: Mortgage Insurance” and Net Premiums Earned under “Results of Operations: Corporate & Other”.

Current wording

Net premiums earned for the three and six months ended June 30, 2025 decreased compared to the three and six months ended June 30, 2024. For more information, see Net Premiums Written and Earned under “Results of Operations: Mortgage Insurance” and Net Premiums Earned under “Results of Operations: Corporate & Other”.

Previous wording

The increase in net investment income for the three months ended March 31, 2025 as compared to the same period in 2024 was due to an increase in the pre-tax investment income yield as well as an increase in the weighted average balance of our investment portfolio. The pre-tax investment income yield increased from 3.7% in the three months ended March 31, 2024 to 3.8% in the three months ended March 31, 2025 primarily due to a general increase in investment yields due to rising interest rates. The average cash and investment portfolio balance increased to $6.4 billion for the three months ended March 31, 2025 from $5.8 billion for the three months ended March 31, 2024. The increase in the average cash and investment portfolio was primarily due to investing cash flows from operations. See “— Liquidity and Capital Resources” for further details of our investment portfolio.

Current wording

The increase in net investment income for the three months ended June 30, 2025 as compared to the same period in 2024 was due to an increase in the weighted average balance of our investment portfolio as well as an increase in the pre-tax investment income yield. The increase in net investment income for the six months ended June 30, 2025 compared to the same period in 2024 was due to an increase in the weighted average balance of the investment portfolio.

Previous wording

Income (loss) from other invested assets for the three months ended March 31, 2025 was income of $7.4 million as compared to a loss of $1.9 million for the three months ended March 31, 2024. The increase in income from other invested assets was primarily due to favorable fair value adjustments recorded during the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

Income (loss) from other invested assets for the three months ended June 30, 2025 was income of $4.5 million as compared to a loss of $0.4 million for the three months ended June 30, 2024 and income of $11.9 million for the six months ended June 30, 2025 compared to a loss of $2.3 million for the six months ended June 30, 2024. The increase in income from other invested assets was primarily due to favorable fair value adjustments recorded during the three and six months ended June 30, 2025 as compared to the same periods in 2024.

Previous wording

Other income for the three months ended March 31, 2025 was $6.3 million as compared to $3.7 million for the three months ended March 31, 2024. The increase in other income was largely due to fair value adjustments on embedded derivatives contained in certain of our reinsurance agreements. For the three months ended March 31, 2025 we recorded a net unfavorable decrease in the fair value of the embedded derivatives of $0.2 million compared to a net unfavorable decrease of $1.9 million for the three months ended March 31, 2024.

Current wording

Other income for the three months ended June 30, 2025 was $6.7 million as compared to $6.5 million for the three months ended June 30, 2024 and $13.0 million for the six months ended June 30, 2025 compared to $10.3 million for the six months ended June 30, 2024. The increase in other income for the six months ended June 30, 2025 compared to the same period in 2024 was largely due to fair value adjustments on embedded derivatives contained in certain of our reinsurance agreements. For the six months ended June 30, 2025 we recorded a net unfavorable decrease in the fair value of the embedded derivatives of $0.2 million compared to a net unfavorable decrease of $1.2 million for the six months ended June 30, 2024.

Previous wording

The increased provision for losses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to an increase in new defaults in the three months ended March 31, 2025, partially offset by an increase in cures, as well as the aging of defaults remaining within the mortgage insurance portfolio as of March 31, 2025, which resulted in an increase in our reserve per default. See “Results of Operations: Mortgage Insurance" for more information.

Current wording

The increased provision for losses for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was primarily due to the aging of defaults remaining within the mortgage insurance portfolio as of June 30, 2025, which resulted in an increase in our reserve per default. See “Results of Operations: Mortgage Insurance" for more information.

Previous wording

The increase in underwriting and operating expenses for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to an increase in compensation expense, including stock compensation, as well as an increase other general operating expenses. For more information, see “Results of Operations: Mortgage Insurance” and “Results of Operations: Corporate & Other.”

Current wording

The decrease in underwriting and operating expenses for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily due to a decrease in compensation expense as a result of a decrease in stock based compensation and a reduction in title operating expenses as a result of fewer title policies issued. Other underwriting and operating expenses for the six months ended June 30, 2025 were largely unchanged compared to the six months ended June 30, 2024. For more information, see “Results of Operations: Mortgage Insurance” and “Results of Operations: Corporate & Other.”

Previous wording

For the three months ended March 31, 2025, we incurred interest expense of $8.1 million as compared to $7.9 million for the three months ended March 31, 2024. On July 1, 2024, Essent Group completed an underwritten public offering of $500 million principal amount of 6.25% Senior Notes due 2029 (the “Senior Notes"). The Company used the net proceeds from the sale of the Senior Notes to repay all of the borrowings outstanding under the term loan portion of the Existing Credit Facility on July 1, 2024. The increase in interest expense was due to an increase in the average borrowings outstanding during the three months ended March 31, 2025 compared to same period in 2024. For the three month periods ended March 31, 2025, the average amount of borrowings outstanding were $500 million compared to $425 million for the three months ended March 31, 2024. For the three months ended March 31, 2025, our total borrowings had a weighted average interest rate of 6.25% as compared to 7.15% for the three months ended March 31, 2024, respectively.

Current wording

For the three and six months ended June 30, 2025, we incurred interest expense of $8.1 million and $16.3 million as compared to $7.8 million and $15.7 million for the three and six months ended June 30, 2024, respectively. On July 1, 2024, Essent Group completed an underwritten public offering of $500 million principal amount of 6.25% Senior Notes due 2029 (the “Senior Notes"). The Company used the net proceeds from the sale of the Senior Notes to repay all of the borrowings outstanding under the term loan portion of the Existing Credit Facility on July 1, 2024. The increase in interest expense was due to an increase in the average borrowings outstanding during the three and six months ended June 30, 2025 compared to same periods in 2024. For the three and six month periods ended June 30, 2025, the average amount of borrowings outstanding were $500 million compared to $425 million for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2025, our total borrowings had a weighted average interest rate of 6.25% as compared to 7.14% for the three and six months ended June 30, 2024, respectively.

Previous wording

Our subsidiaries in the United States file a consolidated U.S. Federal income tax return. Our income tax expense was $31.6 million and $32.0 million for the three months ended March 31, 2025 and 2024, respectively. The provision for income taxes for both the three months ended March 31, 2025 and 2024 was calculated using an estimated annual effective tax rate of 15.4%. For the three months ended March 31, 2025, income tax expense includes $1.6 million of discrete tax expense associated with realized and unrealized losses recognized during the period partially offset by $0.7 million excess tax benefits associated with the vesting of common shares and common share units. For the three months ended March 31, 2024, income tax expense includes $1.7 million of discrete tax benefit associated with realized and unrealized losses recognized during the period as well as excess tax benefits associated with the vesting of common shares and common share units.

Current wording

Our subsidiaries in the United States file a consolidated U.S. Federal income tax return. Our income tax expense was $35.8 million and $35.6 million for the three months ended June 30, 2025 and 2024, respectively and $67.4 million and $67.6 million for the six months ended June 30, 2025 and 2024, respectively. The provision for income taxes for the six months ended June 30, 2025 was calculated using an estimated annual effective tax rate of 15.4% compared to 15.1% for the six months ended June 30, 2024. For the six months ended June 30, 2025, income tax expense includes $2.7 million of discrete tax expense associated with realized and unrealized gains recognized during the period partially offset by $0.8 million excess tax benefits associated with the vesting of common shares and common share units. For the six months ended June 30, 2024, income tax expense includes $1.3 million of discrete tax benefit associated with realized and unrealized losses recognized during the period partially offset by excess tax deficits associated with the vesting of common shares and common share units.

Previous wording

For the three months ended March 31, 2025, our Mortgage Insurance segment reported income before income tax expense of $214.5 million, compared to income before income tax expense of $223.6 million for the three months ended March 31, 2024. The decrease in our operating results during the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to an increase in the provision for losses partially offset by increases in net premiums earned, net investment income and income from other invested assets.

Current wording

For the three months ended June 30, 2025, our Mortgage Insurance segment reported income before income tax expense of $238.2 million, compared to income before income tax expense of $249.1 million for the three months ended June 30, 2024. The decrease in our operating results during the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to an increase in the provision for losses partially offset by increases in net investment income and income from other invested assets and a decrease in other underwriting and operating expenses.

Previous wording

Net premiums earned increased in the three months ended March 31, 2025 by 1.4% compared to the three months ended March 31, 2024. The increase in net premiums earned was due to the increase in our average IIF from $238.6 billion for the three months ended March 31, 2024 to $244.0 billion for the three months ended and March 31, 2025. The average net premium rate was 0.36% for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Net premiums earned decreased in the three months ended June 30, 2025 by 0.6% compared to the three months ended June 30, 2024. The decrease in net premiums earned was primarily due to an increase in ceded premiums as a result of higher ceded losses under our third party quota share arrangements, partially offset by an increase in our average IIF from $239.5 billion for the three months ended June 30, 2024 to $245.7 billion for the three months ended and June 30, 2025. The average net premium rate was 0.36% for both the three months ended June 30, 2025 and 2024.

Previous wording

In the three months ended March 31, 2025 and 2024, unearned premiums decreased by $7.6 million and $7.1 million, respectively. The change in unearned premiums was a result of net premiums written on single premium policies of $1.8 million and $2.9 million, respectively, which was offset by $9.4 million and $10.0 million, respectively, of unearned premium that was recognized in earnings during the periods.

Current wording

In the three months ended June 30, 2025 and 2024, unearned premiums decreased by $7.3 million and $6.3 million, respectively. The change in unearned premiums was a result of net premiums written on single premium policies of $2.2 million and $1.6 million, respectively, which was offset by $9.5 million and $7.9 million, respectively, of unearned premium that was recognized in earnings during the periods. In the six months ended June 30, 2025 and 2024, unearned premiums decreased by $14.9 million and $13.4 million, respectively. This was a result of net premiums written on single premium policies of $4.1 million and $4.5 million, respectively, which was offset by $19.0 million and $17.9 million, respectively, of unearned premium that was recognized in earnings during the periods.

Previous wording

In the three months ended March 31, 2025 we recorded a provision for losses of $30.7 million compared to a provision of $9.3 million for the three months ended March 31, 2024. The increase in the provision for losses in the three months ended March 31, 2025 compared to the same period in the prior year was primarily due to an increase in new defaults in the three months ended March 31, 2025, partially offset by an increase in cures, as well as the aging of defaults remaining within the mortgage insurance portfolio as of March 31, 2025, which resulted in an increase in our reserve per default.

Current wording

In the three months ended June 30, 2025 we recorded a provision for losses of $15.4 million compared to a benefit of $1.2 million for the three months ended June 30, 2024. In the six months ended June 30, 2025 we recorded a provision of $46.1 million compared to a provision of $8.1 million for the six months ended June 30, 2024. The increase in the provision for losses in the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily due to the aging of defaults remaining within the mortgage insurance portfolio as of June 30, 2025, which resulted in an increase in our reserve per default.

Previous wording

During the three months ended March 31, 2025, the provision for losses and LAE was a provision of $30.7 million, comprised of $48.9 million of current year losses partially offset by $18.2 million of favorable prior years’ loss development. During the three months ended March 31, 2024, the provision for losses and LAE was $9.3 million, comprised of $39.4 million of current year losses partially offset by $30.1 million of favorable prior years’ loss development. In both periods, the 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.

Current wording

During the three months ended June 30, 2025, the Mortgage Insurance provision for losses and LAE was a provision of $15.3 million, comprised of $45.1 million of current year losses partially offset by $29.8 million of favorable prior years’ loss development. During the three months ended June 30, 2024, the benefit for losses and LAE was $1.2 million, comprised of $30.7 million of current year losses offset by $31.9 million of favorable prior years’ loss development.

Previous wording

•Compensation and benefits increased in the three months ended March 31, 2025 compared to the same period in 2024 primarily due to increases in headcount and stock based compensation expense. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes. The first quarter of each year typically has higher compensation and benefits expense than the subsequent quarters due to payroll taxes on annual bonus payouts and vesting of nonvested stock and stock units, as well as higher stock-based compensation expense.

Current wording

•Compensation and benefits decreased during the three months ended June 30, 2025 compared to the same period in 2024 primarily due to a decrease in average number of employees during the current period. Compensation and benefits during the six months ended June 30, 2025 were largely unchanged compared to the same period in 2024 as the impact of lower average employees in 2025 was offset by the timing of stock-based compensation due to provisions in certain equity grants that reduced the service period resulting in higher expense in early 2025. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes. The first quarter of each year typically has higher compensation and benefits expense than the subsequent quarters due to payroll taxes on annual bonus payouts and vesting of nonvested stock and stock units, as well as higher stock-based compensation expense.

Previous wording

•The increases in ceding commission during the three months ended March 31, 2025 compared to the same period in 2024 results from increases in the amount of reinsured insurance in force under our outstanding quota share arrangements.

Current wording

•The increases in ceding commission during the three and six month periods ended June 30, 2025 compared to the same periods in 2024 results from increases in the amount of reinsured insurance in force under our outstanding quota share arrangements.

Previous wording

•Other expenses were largely unchanged for the three months ended March 31, 2025 compared to the same period in 2024. Other expenses include professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses.

Current wording

•Other expenses include professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses.

Previous wording

Net premiums earned reported in Corporate & Other relate to premiums earned by our title insurance operations. The decrease in net premiums earned in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is primarily due to a decrease in title insurance policies issued in 2025.

Current wording

Net premiums earned reported in Corporate & Other relate to premiums earned by our title insurance operations. The decrease in net premiums earned is primarily due to a decrease in title insurance policies issued in the three and six month periods ended June 30, 2025 compared to the same periods in 2024.

Previous wording

The provision for losses reported in Corporate & Other relates to loss provisions recorded by our title insurance operations. The decrease in the provision for losses in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is primarily due to a decrease in title insurance policies issued in 2025, partially offset by the impact of recent industry experience and trends. Title insurance reserves as of March 31, 2025 and December 31, 2024 were $18.4 million and 18.7 million, respectively.

Current wording

The provision for losses reported in Corporate & Other relates to loss provisions recorded by our title insurance operations. The increase in the provision for losses in the three and six month periods ended June 30, 2025 compared to the same periods in 2024 is primarily due to the impact of recent industry experience and trends on our IBNR reserves. Title insurance reserves were $18.7 million at both June 30, 2025 and December 31, 2024.

Previous wording

•Compensation and benefits increased during the three months ended March 31, 2025 compared to the same period in 2024 primarily due to an increase in stock based compensation expense. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes. The first quarter of each year typically has higher compensation and benefits expense than the subsequent quarters due to payroll taxes on annual bonus payouts and vesting of nonvested stock and stock units, as well as higher stock-based compensation expense.

Current wording

•Compensation and benefits decreased in the three months ended June 30, 2025 compared to the same period in 2024 primarily due to decreases in stock based compensation expense as a result of provisions in certain equity grants that reduced the service period, resulting in higher expense in early 2025. Compensation and benefits increased during the six months ended June 30, 2025 compared to the same period in 2024 as a result of an increase in the average number of employees. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes.

Previous wording

•Premium taxes increased during the three months ended March 31, 2025 compared to the same period in 2024 primarily due to $1.0 million of net expense associated with prior year premium tax returns.

Current wording

•Premium taxes increased during the six months ended June 30, 2025 compared to the same period in 2024 primarily due to $1.0 million of net expense associated with prior year premium tax returns. Premium taxes were largely unchanged in the three months ended June 30, 2025 compared to the same period in 2024.

Previous wording

•Other expenses include title and settlement services direct cost, professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses. Other expenses also includes premiums retained by agents which represents the portion of title insurance premiums retained by our third-party agents pursuant to the terms of their respective agency contracts. Other expenses decreased in the three months ended March 31, 2025 compared to the same period in 2024 primarily due to decreases in title and settlement services direct cost and premiums retained by agents due to a decrease in title insurance policies issued 2025, partially offset by an increase in professional fees.

Current wording

•Other expenses include title and settlement services direct cost, professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses. Other expenses also includes premiums retained by agents which represents the portion of title insurance premiums retained by our third-party agents pursuant to the terms of their respective agency contracts. Other expenses were largely unchanged in the three months ended June 30, 2025 compared to the same period in 2024 and decreased during the six months ended June 30, 2025 compared to the same period in 2024 primarily due to decreases in title and settlement services direct cost and premiums retained by agents due to a decrease in title insurance policies issued 2025, partially offset by an increase in professional fees.

Previous wording

As of March 31, 2025, we had substantial liquidity with cash of $208.1 million, short-term investments of $537.0 million and fixed maturity investments of $5.3 billion. We also had $500 million available capacity under our Revolving Credit Facility. Holding company net cash and investments available for sale totaled $1.0 billion at March 31, 2025. In addition, Essent Guaranty is a member of the Federal Home Loan Bank of Pittsburgh (the “FHLBank”) and has access to secured borrowing capacity with the FHLBank to provide Essent Guaranty with supplemental liquidity. Essent Guaranty had no outstanding borrowings with the FHLBank at March 31, 2025.

Current wording

As of June 30, 2025, we had substantial liquidity with cash of $92.1 million, short-term investments of $583.0 million and fixed maturity investments of $5.4 billion. We also had $500 million available capacity under our Revolving Credit Facility. Cash and investments available for sale at the holding companies totaled $1.0 billion at June 30, 2025. In addition, Essent Guaranty is a member of the Federal Home Loan Bank of Pittsburgh (the “FHLBank”) and has access to secured borrowing capacity with the FHLBank to provide Essent Guaranty with supplemental liquidity. Essent Guaranty had no outstanding borrowings with the FHLBank at June 30, 2025.

Previous wording

On July 1, 2024, we completed an underwritten public offering of $500 million of 6.25% Senior Notes due in 2029. The Company used the net proceeds from the sale of the Senior Notes to repay the $425 million of borrowings outstanding under the term loan portion of the Existing Credit Facility and intends to use the remaining net proceeds for general corporate purposes. On July 1, 2024, concurrently with the closing of the offering of the Senior Notes and the repayment of all of the borrowings outstanding under the term loan portion of the Existing Credit Facility, the Fourth Amended and Restated Credit Agreement (the “Revolving Credit Agreement”) became effective and amends and restates the Existing Credit Facility. The Revolving Credit Agreement provides for an effective increase in the Company’s revolving credit facility borrowing capacity from $400 million to $500 million.

Current wording

On July 1, 2024, we completed an underwritten public offering of $500 million of 6.25% Senior Notes due in 2029. The Company used the net proceeds from the sale of the Senior Notes to repay the $425 million of borrowings outstanding under the term loan portion of the Existing Credit Facility and intends to use the remaining net proceeds for general corporate purposes. On July 1, 2024, concurrently with the closing of the offering of the Senior Notes and the repayment of all of the borrowings outstanding under the term loan portion of the Existing Credit Facility, the Fourth Amended and Restated Credit Agreement (the “Revolving Credit Agreement”) became effective and amends and restates the Existing Credit Facility. The

Previous wording

Our U.S. insurance subsidiaries are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and, in the case of Essent Guaranty, the GSEs. Under the insurance laws of the Commonwealth of Pennsylvania, the insurance subsidiaries may pay dividends during any twelve-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 requires that, without the prior approval of the Pennsylvania Insurance Department, dividends and other distributions may only be paid out of positive unassigned surplus. At March 31, 2025, Essent Guaranty had unassigned surplus of approximately $405.4 million. As of March 31, 2025, Essent Guaranty could pay additional ordinary dividends in 2025 of $405.4 million.

Current wording

Our U.S. insurance subsidiaries are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and, in the case of Essent Guaranty, the GSEs. Under the insurance laws of the Commonwealth of Pennsylvania, the insurance subsidiaries may pay dividends during any twelve-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 requires that, without the prior approval of the Pennsylvania Insurance Department, dividends and other distributions may only be paid out of positive unassigned surplus. At June 30, 2025, Essent Guaranty had unassigned surplus of approximately $444.8 million. As of June 30, 2025, Essent Guaranty could pay additional ordinary dividends in 2025 of $365.5 million.

Previous wording

Essent Re is subject to certain dividend restrictions as prescribed by the Bermuda Monetary Authority and under certain agreements with counterparties. Class 3B insurers must obtain the BMA's prior approval for a reduction by 15% or more of total statutory capital or for a reduction by 25% or more of total statutory capital and surplus as set forth in its previous year's statutory financial statements. In connection with a quota share reinsurance agreement with Essent Guaranty, Essent Re has agreed to maintain a minimum total equity of $100 million. As of March 31, 2025, Essent Re had total equity of $1.8 billion. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. See Note 3 to our condensed consolidated financial statements. As of March 31, 2025, Essent Re could pay additional dividends in 2025 of $341.9 million without prior approval from the BMA.

Current wording

Essent Re is subject to certain dividend restrictions as prescribed by the Bermuda Monetary Authority and under certain agreements with counterparties. Class 3B insurers must obtain the BMA's prior approval for a reduction by 15% or more of total statutory capital or for a reduction by 25% or more of total statutory capital and surplus as set forth in its previous year's statutory financial statements. In connection with a quota share reinsurance agreement with Essent Guaranty, Essent Re has agreed to maintain a minimum total equity of $100 million. As of June 30, 2025, Essent Re had total equity of $1.8 billion. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. See Note 3 to our condensed consolidated financial statements. As of June 30, 2025, Essent Re could pay additional dividends in 2025 of $221.9 million without prior approval from the BMA.

Previous wording

Cash flow provided by operating activities totaled $221.6 million for the three months ended March 31, 2025, as compared to $216.9 million for the three months ended March 31, 2024. The increase in cash flow provided by operating activities was primarily due to increases in investment income and other income partially offset by an increase in operating expenses paid in the three months ended March 31, 2025.

Current wording

Cash flow provided by operating activities totaled $411.1 million for the six months ended June 30, 2025, as compared to $405.6 million for the six months ended June 30, 2024. The increase in cash flow provided by operating activities was primarily due to increases in investment income.