Essent Group Ltd.

Previous wording

The following discussion should be read together with 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, 2025 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, 2026 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 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, 2025 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 nine months ended September 30, 2026 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, or NIW, of approximately $14.1 billion and $25.2 billion for the three and six months ended June 30, 2026, respectively, compared to approximately $12.5 billion and $22.5 billion for the three and six months ended June 30, 2025, respectively. The financial strength ratings of Essent Guaranty are A2 with a stable outlook by Moody’s Ratings (“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 $12.1 billion and $37.3 billion for the three and nine months ended September 30, 2026, respectively, compared to approximately $12.2 billion and $34.7 billion for the three and nine months ended September 30, 2025, respectively. The financial strength ratings of Essent Guaranty are A2 with a stable outlook by Moody’s Ratings (“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"). On October 26, 2026, S&P affirmed the A- financial strength rating of Essent Guaranty, Inc. and raised the outlook to positive from stable.

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 also provide underwriting consulting services to third-party reinsurers. As of June 30, 2026, Essent Re provided insurance or reinsurance relating to GSE and other mortgage risk share transactions covering approximately $2.1 billion of risk. Essent Re also reinsures Essent Guaranty’s NIW under a quota share reinsurance agreement. Effective January 1, 2026, Essent Re began reinsuring certain property and casualty risks. The 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 also provide underwriting consulting services to third-party reinsurers. As of September 30, 2026, Essent Re provided insurance or reinsurance relating to GSE and other mortgage risk share transactions covering approximately $2.0 billion of risk. Essent Re also reinsures Essent Guaranty’s NIW under a quota share reinsurance agreement. Effective January 1, 2026, Essent Re began reinsuring certain property and casualty risks. The 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 518 employees as of June 30, 2026. 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 523 employees as of September 30, 2026. 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

The Federal Reserve increased the target federal funds rate several times during 2022 and 2023 in an effort to reduce consumer price inflation. As a result of progress on inflation, the Federal Reserve reduced the target federal funds rate by 100 basis points in 2024 and by another 75 basis points during 2025. Mortgage interest rates, however, have remained elevated, which has reduced home buying and mortgage refinance activity resulting in lower volumes of mortgage originations, NIW and title insurance and settlement service transactions. Higher interest rates have also resulted in increases in our net investment income generated by our investment portfolio and the persistency of our mortgage insurance in force.

Current wording

Mortgage interest rates remain elevated with the average 30-year mortgage interest rate closing above 7.30% at September 30, 2026, which has reduced home buying and mortgage refinance activity resulting in lower volumes of mortgage originations, NIW and title insurance and settlement service transactions. Higher interest rates have also resulted in increases in our net investment income generated by our investment portfolio and the persistency of our mortgage insurance in force.

Previous wording

Although our annual revenue meets the CIT threshold for "in-scope" (€750M), our Bermuda companies are not "in scope" because of a statutory exception for entities having “limited international presence” or "LIP". We currently meet the criteria for the LIP exception, which is available to our Bermuda companies for a period of five years, or when the LIP criteria are no longer met, whichever is sooner. The LIP exemption criteria are subject to interpretation of existing Bermuda law, as well as any related new regulations that may be issued by the Government of Bermuda. Also, future strategic business decisions could impact qualification for the LIP exception. Accordingly, no assurances can be made that we will continue meeting the LIP exception criteria during the four years remaining in our five-year exemption period.

Current wording

Although our annual revenue meets the CIT threshold for "in-scope" (€750M), our Bermuda companies are not "in scope" because of a statutory exception for entities having “limited international presence” or "LIP". We currently meet the criteria for the LIP exception, which is available to our Bermuda companies for a period of five years, or when the LIP criteria are no longer met, whichever is sooner. The LIP exemption criteria are subject to interpretation of existing Bermuda law, as well as any related new regulations that may be issued by the Government of Bermuda. Also, future strategic business decisions could impact qualification for the LIP exception. Accordingly, no assurances can be made that we will continue meeting the LIP exception criteria during the years remaining in our five-year exemption period.

Previous wording

In April 2026, FHFA announced that the GSEs will begin accepting loans with the VantageScore 4.0 model for certain approved lenders and will begin moving forward with FICO 10T. During the second quarter of 2026, Essent Guaranty began insuring loans from approved lenders that were submitted using the VantageScore 4.0 model. The loans insured that were submitted with a VantageScore credit score represent a de minimis amount of our NIW for the three and six months ended June 30, 2026 and IIF and RIF at June 30, 2026.

Current wording

In April 2026, FHFA announced that the GSEs will begin accepting loans with the VantageScore 4.0 model for certain approved lenders and will begin moving forward with FICO 10T. In September 2026, the GSEs announced that the VantageScore 4.0 model was available for all lenders. Beginning in the second quarter of 2026, Essent Guaranty began insuring loans that were submitted using the VantageScore 4.0 model. The loans insured that were submitted with a VantageScore credit score represent a de minimis amount of our NIW for the three and nine months ended September 30, 2026 and IIF and RIF at September 30, 2026.

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 June 30, 2026 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, 2026 and 2025, monthly premium policies comprised 98% and 99% 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 September 30, 2026 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 nine months ended September 30, 2026 and 2025, monthly premium policies comprised 99% and 99% 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 84.0% at June 30, 2026. 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 83.3% at September 30, 2026. Generally, higher prepayment speeds lead to lower persistency.

Previous wording

Other income includes revenues associated with underwriting consulting services to third-party reinsurers, title settlement services and contract underwriting services. The level of these revenues are dependent upon the number of customers who have engaged us for these services. Revenue from underwriting consulting services to third-party reinsurers is also dependent upon the level of premiums associated with the transactions underwritten for these customers. Revenue from title settlement services and contract underwriting revenue are also dependent upon the number of loans underwritten for these customers.

Current wording

Other income includes revenues associated with underwriting consulting services to third-party reinsurers, title settlement services and contract underwriting services. The level of these revenues is dependent upon the number of customers who have engaged us for these services. Revenue from underwriting consulting services to third-party reinsurers is also dependent upon the level of premiums associated with the transactions underwritten for these customers. Revenue from title settlement services and contract underwriting revenue are also dependent upon the number of loans underwritten for these customers.

Previous wording

•the distribution of claims over the life of a book. As of June 30, 2026, 47% of our IIF relates to mortgage insurance business written before January 1, 2023 and was at least 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 September 30, 2026, 44% of our IIF relates to mortgage insurance business written before January 1, 2023 and was at least 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 June 30, 2026, 47% of our IIF relates to business written before January 1, 2023 and was at least three years old. As such, we expect incurred losses and claims to increase as a greater amount of this book of insurance is entering 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 September 30, 2026, 44% of our IIF relates to business written before January 1, 2023 and was at least three years old. As such, we expect incurred losses and claims to increase as a greater amount of this book of insurance is entering 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

The Federal Reserve increased the target federal funds rate several times during 2022 and 2023 in an effort to reduce consumer price inflation. As a result of subsequent reductions in inflation rates, the Federal Reserve reduced the target federal funds rate by 100 basis points in 2024 and by another 75 basis points during 2025. Mortgage interest rates, however, have remained elevated, which may lower home sale activity and affect the options available to delinquent borrowers. It is reasonably possible that our estimate of losses could change in the near term as a result of changes in the economic environment, the impact of elevated levels of consumer price inflation on home sale activity, housing inventory, and home prices.

Current wording

Mortgage interest rates remain elevated, with the average 30-year mortgage interest rate closing above 7.30% at September 30, 2026 which may lower home sale activity and affect the options available to delinquent borrowers. It is reasonably possible that our estimate of losses could change in the near term as a result of changes in the economic environment, the impact of elevated levels of consumer price inflation on home sale activity, housing inventory, and home prices.

Previous wording

During 2025 and through the second quarter of 2026, we observed a decline in the number of defaults associated with hurricanes Helene and Milton. In the second quarter of 2026, we began reserving for the remaining hurricane-related defaults consistently with the standard methodology used for our default inventory, which did not have a significant impact on our provision for losses and loss adjustment expenses in the three and six months ended June 30, 2026 or the reserve balance at June 30, 2026.

Current wording

During 2025 and through the second quarter of 2026, we observed a decline in the number of defaults associated with hurricanes Helene and Milton. In the second quarter of 2026, we began reserving for the remaining hurricane-related defaults consistently with the standard methodology used for our default inventory, which did not have a significant impact on our provision for losses and loss adjustment expenses in the nine months ended September 30, 2026 or the reserve balance at September 30, 2026.

Previous wording

Our most significant expense is compensation and benefits for our employees, which represented 41% and 45% of other underwriting and operating expenses for the three and six months ended June 30, 2026, compared to 49% and 53% for the three and six months ended June 30, 2025. Compensation and benefits expense includes base and incentive cash compensation, stock compensation expense, benefits and payroll taxes.

Current wording

One of our most significant expenses is compensation and benefits for our employees, which represented 37% and 42% of other underwriting and operating expenses for the three and nine months ended September 30, 2026, compared to 49% and 51% for the three and nine months ended September 30, 2025. Compensation and benefits expense includes base and incentive cash compensation, stock compensation expense, benefits and payroll taxes.

Previous wording

Other underwriting and operating expenses also include premiums retained by agents, which represent the portion of title insurance premiums retained by our third-party agents pursuant to the terms of their respective agency contracts and are recorded as an expense. The percentage of premiums retained by agents vary according to regional differences in real estate closing practices and state regulations.

Current wording

Other underwriting and operating expenses also include premiums retained by agents, which represent the portion of title insurance premiums retained by our third-party agents pursuant to the terms of their respective agency contracts and are recorded as an expense. The percentage of premiums retained by agents varies according to regional differences in real estate closing practices and state regulations.

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 and six months ended June 30, 2026 and 2025 for our 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 nine months ended September 30, 2026 and 2025 for our mortgage insurance portfolio. In addition, this table includes our RIF at the end of each period.

Previous wording

As of June 30, 2026, the net risk in force for Essent Guaranty was $31.1 billion and its statutory capital was $3.7 billion, resulting in a risk-to-capital ratio of 8.5:1. 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 September 30, 2026, the net risk in force for Essent Guaranty was $30.4 billion and its statutory capital was $3.7 billion, resulting in a risk-to-capital ratio of 8.2:1. 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 and six months ended June 30, 2026 increased compared to the three and six months ended June 30, 2025, primarily due to property and casualty reinsurance assumed beginning January 1, 2026. For more information, see Net Premiums Written and Earned under “Results of Operations: Mortgage Insurance”, Net Premiums Written and Earned under “Results of Operations: Reinsurance” and Net Premiums Earned under “Results of Operations: Corporate & Other”.

Current wording

Net premiums earned for the three and nine months ended September 30, 2026 increased compared to the three and nine months ended September 30, 2025, primarily due to property and casualty reinsurance assumed beginning January 1, 2026. For more information, see Net Premiums Written and Earned under “Results of Operations: Mortgage Insurance”, Net Premiums Written and Earned under “Results of Operations: Reinsurance” and Net Premiums Earned under “Results of Operations: Corporate & Other”.

Previous wording

The increase in net investment income for the three and six months ended June 30, 2026 as compared to the same periods in 2025 was due to an increase in the pre-tax investment income yield and an increase in the average balance of cash and available-for-sale investments. The pre-tax investment income yield on cash and available-for-sale investments increased from 3.85% for the three months ended June 30, 2025 to 3.99% for the three months ended June 30, 2026, and from 3.81% for the six months ended June 30, 2025 to 3.89% for the six months ended June 30, 2026, primarily due to a general increase in investment yields due to rising interest rates. The average cash and available-for-sale investment portfolio balance was $6.4 billion for both the three and six months ended June 30, 2026 and $6.3 billion for both the three and six months ended June 30, 2025, respectively. See “— Liquidity and Capital Resources” for further details of our investment portfolio.

Current wording

The increase in net investment income for the three and nine months ended September 30, 2026 as compared to the same periods in 2025 was due to an increase in the pre-tax investment income yield and an increase in the average balance of cash and available-for-sale investments. The pre-tax investment income yield on cash and available-for-sale investments increased from 3.89% for the three months ended September 30, 2025 to 4.06% for the three months ended September 30, 2026, and from 3.83% for the nine months ended September 30, 2025 to 3.94% for the nine months ended September 30, 2026, primarily due to a general increase in investment yields due to rising interest rates. The average cash and available-for-sale investment portfolio balance was $6.4 billion for both the three and nine months ended September 30, 2026 and $6.3 billion for both the three and nine months ended September 30, 2025, respectively. See “— Liquidity and Capital Resources” for further details of our investment portfolio.

Previous wording

Income from other invested assets for the three months ended June 30, 2026 was $19.4 million as compared to $4.5 million for the three months ended June 30, 2025. Income from other invested assets for the six months ended June 30, 2026 was $29.6 million as compared to $11.9 million for the six months ended June 30, 2025. The increase in income from other invested assets for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was due to increased favorable fair value adjustments recorded.

Current wording

Income from other invested assets for the three months ended September 30, 2026 was $10.7 million as compared to $1.8 million for the three months ended September 30, 2025. Income from other invested assets for the nine months ended September 30, 2026 was $40.3 million as compared to $13.6 million for the nine months ended September 30, 2025. The increase in income from other invested assets for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025 was due to increased favorable fair value adjustments recorded.

Previous wording

Other income for the three months ended June 30, 2026 was $5.0 million as compared to $6.7 million for the three months ended June 30, 2025. Other income for the six months ended June 30, 2026 was $11.7 million as compared to $13.0 million for the six months ended June 30, 2025. Other income includes revenues associated with underwriting consulting services to third-party reinsurers, title settlement services and contract underwriting services, as well as changes in the fair value of our embedded derivatives associated with certain reinsurance contracts.

Current wording

Other income for the three months ended September 30, 2026 was $11.5 million as compared to $4.4 million for the three months ended September 30, 2025. Other income for the nine months ended September 30, 2026 was $23.2 million as compared to $17.3 million for the nine months ended September 30, 2025. Other income includes revenues associated with underwriting consulting services to third-party reinsurers, title settlement services and contract underwriting services, as well as changes in the fair value of our embedded derivatives associated with certain reinsurance contracts. The increase in other income for both the three and nine months ended September 30, 2026 compared to September 30, 2025 was primarily due to a decrease in our embedded derivative liability as a result of the termination of the Radnor Re 2021-1 transaction during the third quarter of 2026.

Previous wording

The increased provision for losses for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was primarily due to property and casualty reinsurance assumed beginning January 1, 2026 and an increase in the average reserve per default due to aging of defaults remaining within the mortgage insurance portfolio. See “Results of Operations: Mortgage Insurance" and “Results of Operations: Reinsurance" for more information.

Current wording

The increased provision for losses for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025 was primarily due to property and casualty reinsurance assumed beginning January 1, 2026 and an increase in mortgage insurance loans in default as well as an increase in the average reserve per default due to aging of defaults remaining within the mortgage insurance portfolio. See “Results of Operations: Mortgage Insurance" and “Results of Operations: Reinsurance" for more information.

Previous wording

The increase in underwriting and operating expenses for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was primarily due to an increase in operating expenses in our Reinsurance segment, partially offset by decreases in operating expenses in our Mortgage Insurance segment. For more information, see “Results of Operations: Mortgage Insurance”, “Results of Operations: Reinsurance” and “Results of Operations: Corporate & Other.”

Current wording

The increase in underwriting and operating expenses for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025 was primarily due to an increase in operating expenses in our Reinsurance segment, partially offset by a decrease in operating expenses in our Mortgage Insurance segment. For more information, see “Results of Operations: Mortgage Insurance”, “Results of Operations: Reinsurance” and “Results of Operations: Corporate & Other.”

Previous wording

For the three month periods ended June 30, 2026 and 2025, we incurred interest expense of $8.1 million, respectively. For the six month periods ended June 30, 2026 and 2025, we incurred interest expense of $16.3 million, respectively. The average amount of borrowings outstanding were $500 million at a weighted average interest rate of 6.25% for all periods presented.

Current wording

For the three month periods ended September 30, 2026 and 2025, we incurred interest expense of $8.2 million and $8.3 million, respectively. For the nine month periods ended September 30, 2026 and 2025, we incurred interest expense of $24.5 million in both periods. The average amount of borrowings outstanding were $500 million at a weighted average interest rate of 6.25% for all periods presented.

Previous wording

Our subsidiaries in the United States file a consolidated U.S. Federal income tax return. Our income tax expense was $40.6 million and $35.8 million for the three months ended June 30, 2026 and 2025, respectively and $75.5 million and $67.4 million for the six months ended June 30, 2026 and 2025, respectively. The provision for income taxes for the six months ended June 30, 2026 was calculated using an estimated annual effective tax rate of 17.3% compared to 15.4% for the six months ended June 30, 2025. The increase in our estimated annual effective tax rate is primarily related to estimated withholding taxes to be incurred on intercompany dividends by Essent US Holdings, Inc. to its parent company. For the six months ended June 30, 2026, income tax expense includes $6.4 million of discrete tax expense associated with realized and unrealized gains recognized during the period partially offset by $1.1 million excess tax benefits associated with the vesting of common shares and common share units. 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.

Current wording

Our subsidiaries in the United States file a consolidated U.S. Federal income tax return. Our income tax expense was $35.7 million and $34.9 million for the three months ended September 30, 2026 and 2025, respectively and $111.2 million and $102.3 million for the nine months ended September 30, 2026 and 2025, respectively. The provision for income taxes for the nine months ended September 30, 2026 was calculated using an estimated annual effective tax rate of 17.4% compared to 16.2% for the nine months ended September 30, 2025. The increase in our estimated annual effective tax rate is primarily related to withholding taxes incurred on intercompany dividends by Essent US Holdings, Inc. to its parent company. For the nine months ended September 30, 2026, income tax expense includes $9.8 million of discrete tax expense associated with realized and unrealized gains recognized during the period partially offset by $1.1 million excess tax benefits associated with the vesting of common shares and common share units. For the nine months ended September 30, 2025, income tax expense includes $3.2 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, as well as $0.8 million of favorable adjustments related to prior year tax returns.

Previous wording

For the three months ended June 30, 2026, our Mortgage Insurance segment reported income before income tax expense of $212.6 million, compared to income before income tax expense of $220.1 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, our Mortgage Insurance segment reported income before income tax expense of $402.7 million, compared to income before income tax expense of $414.0 million for the six months ended June 30, 2025. The decrease in our operating results during the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily due to an increase in the provision for losses and a decrease in net premiums earned, partially offset by an increase in income from other invested assets and a decrease in other underwriting and operating expenses.

Current wording

The increase in our operating results during the three months ended September 30, 2026 compared to the same period in 2025 was primarily due to an increase in income from other invested assets and other income and a decrease in other underwriting and operating expense, partially offset by an increase in the provision for losses and a decrease in net premiums earned.

Previous wording

Net premiums earned in the three and six months ended June 30, 2026 decreased compared to the three and six months ended June 30, 2025. The average net premium rate decreased to 0.35% for the three months ended June 30, 2026 compared to 0.36% for the three months ended June 30, 2025 as a result of a decrease in the base premium rate. The average net premium rate decreased to 0.35% for the six months ended June 30, 2026 compared to 0.36% for the six months ended June 30, 2025 due to an increase in ceded premiums as a result of higher ceded losses under our third party quota share arrangements. Our average IIF increased from $245.7 billion for the three months ended June 30, 2025 to $248.5 billion for the three months ended June 30, 2026 and from $244.9 billion for the six months ended June 30, 2025 to $248.2 billion for the six months ended June 30, 2026.

Current wording

Net premiums earned in the three and nine months ended September 30, 2026 decreased compared to the three and nine months ended September 30, 2025. The average net premium rate decreased to 0.34% for the three and nine months ended September 30, 2026 compared to 0.35% for the three and nine months ended September 30, 2025, as a result of a decrease in the base premium rate. Our average IIF increased from $247.8 billion for the three months ended September 30, 2025 to $249.9 billion for the three months ended September 30, 2026 and from $245.9 billion for the nine months ended September 30, 2025 to $248.7 billion for the nine months ended September 30, 2026.

Previous wording

In the three months ended June 30, 2026 we recorded a provision for losses of $29.4 million compared to a provision of $15.3 million for the three months ended June 30, 2025. In the six months ended June 30, 2026 we recorded a provision for losses of $67.0 million compared to a provision of $46.0 million for the six months ended June 30, 2025. The increase in the provision for losses in the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily the result of an increase in our average reserve per default due to aging of defaults remaining within the mortgage insurance portfolio and an increase in the average RIF per default.

Current wording

In the three months ended September 30, 2026 we recorded a provision for losses of $51.7 million compared to a provision of $44.2 million for the three months ended September 30, 2025. In the nine months ended September 30, 2026 we recorded a provision for losses of $118.7 million compared to a provision of $90.2 million for the nine months ended September 30, 2025. The increase in the provision for losses in the three and nine months ended September 30, 2026 compared to the same periods in 2025 was primarily the result of an increase in insured loans in default, as well as an increase in our average reserve per default due to aging of defaults remaining within the mortgage insurance portfolio and an increase in the average RIF per default.

Previous wording

During the three months ended June 30, 2026, the Mortgage Insurance provision for losses and LAE was a provision of $29.4 million, comprised of $58.4 million of current year losses partially offset by $29.0 million of favorable prior years’ loss development. During the three months ended June 30, 2025, the provision for losses and LAE was $15.3 million, comprised of $45.1 million of current year losses offset by $29.8 million of favorable prior years’ loss development.

Current wording

During the three months ended September 30, 2026, the Mortgage Insurance provision for losses and LAE was a provision of $51.7 million, comprised of $81.3 million of current year losses partially offset by $29.6 million of favorable prior years’ loss development. During the three months ended September 30, 2025, the provision for losses and LAE was $44.2 million, comprised of $62.3 million of current year losses offset by $18.2 million of favorable prior years’ loss development.

Previous wording

During the six months ended June 30, 2026, the Mortgage Insurance provision for losses and LAE was a provision of $67.0 million, comprised of $121.2 million of current year losses partially offset by $54.2 million of favorable prior years’ loss development. During the six months ended June 30, 2025, the provision for losses and LAE was $46.0 million, comprised of $94.0 million of current year losses offset by $48.0 million of favorable prior years’ loss development.

Current wording

During the nine months ended September 30, 2026, the Mortgage Insurance provision for losses and LAE was a provision of $118.7 million, comprised of $202.5 million of current year losses partially offset by $83.8 million of favorable prior years’ loss development. During the nine months ended September 30, 2025, the provision for losses and LAE was $90.2 million, comprised of $156.4 million of current year losses offset by $66.2 million of favorable prior years’ loss development.

Previous wording

•Compensation and benefits decreased during the three and six months ended June 30, 2026 compared to the same periods in 2025 primarily due to a decrease in average number of employees during the current period. 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 and nine months ended September 30, 2026 compared to the same periods in 2025 primarily due to a decrease in average number of employees during the current periods. 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

•Acquisition costs are net of ceding commissions earned on outward reinsurance. The change in acquisition costs during the three and six month periods ended June 30, 2026 compared to the same periods in 2025 resulted from increased ceding commission earned due to increased outward reinsurance of insurance in force under our outstanding quota share arrangements.

Current wording

•Acquisition costs are net of ceding commissions earned on outward reinsurance. The change in acquisition costs during the three and nine month periods ended September 30, 2026 compared to the same periods in 2025 resulted from increased ceding commission earned due to increased outward reinsurance of insurance in force under our outstanding quota share arrangements.

Previous wording

•Other expenses include professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses. The increase in other expenses for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily attributable to increases in professional fees.

Current wording

•Other expenses include professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses. The increase in other expenses for the three and nine months ended September 30, 2026 compared to the same periods in 2025 was primarily attributable to increases in software costs and professional fees.

Previous wording

Reinsurance net premiums earned increased during the three and six month periods ended June 30, 2026 compared to the same periods in 2025 primarily due to premiums earned on the reinsurance of certain property and casualty risks, which Essent Re began writing effective January 1, 2026. Premiums earned also include premiums from Essent Re's participation in the GSE-sponsored mortgage risk share transactions.

Current wording

Reinsurance net premiums earned increased during the three and nine month periods ended September 30, 2026 compared to the same periods in 2025 primarily due to premiums earned on the reinsurance of certain property and casualty risks, which Essent Re began writing effective January 1, 2026. Premiums earned also include premiums from Essent Re's participation in the GSE-sponsored mortgage risk share transactions.

Previous wording

In the three and six months ended June 30, 2026 we recorded a provision for losses of $18.7 million and $28.7 million, respectively, compared to a provision of $36 thousand and $39 thousand for the three and six months ended June 30, 2025, respectively. The increase in provision for losses and loss adjustment expenses for the three and six month periods ended June 30, 2026 primarily relates to loss provisions recorded for property and casualty premiums earned during 2026. Property and casualty ultimate losses are estimated on premiums earned and the average loss ratios for property and casualty reinsurance are inherently higher than loss ratios on the reinsurance of GSE-sponsored mortgage risk share transactions. Reinsurance reserves as of June 30, 2026 and 2025 were $27.7 million and $88 thousand, respectively.

Current wording

In the three and nine months ended September 30, 2026 we recorded a provision for losses of $31.0 million and $59.7 million, respectively, compared to a provision of $65 thousand and $105 thousand for the three and nine months ended September 30, 2025, respectively. The increase in provision for losses and loss adjustment expenses for the three and nine month periods ended September 30, 2026 primarily relates to loss provisions recorded for property and casualty premiums earned during 2026. Property and casualty ultimate losses are estimated on premiums earned and the average loss ratios for property and casualty reinsurance are inherently higher than loss ratios on the reinsurance of GSE-sponsored mortgage risk share transactions. Reinsurance reserves as of September 30, 2026 and 2025 were $57.5 million and $153 thousand, respectively.

Previous wording

•Compensation and benefits increased for the three and six month periods ended June 30, 2026 compared to the same periods in 2025 primarily due to an increase in headcount and incentive compensation. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes.

Current wording

•Compensation and benefits increased for the three and nine month periods ended September 30, 2026 compared to the same periods in 2025 primarily due to an increase in headcount and incentive compensation. Compensation and benefits includes salaries, wages and bonus, stock compensation expense, benefits and payroll taxes.

Previous wording

•The increase in acquisition costs for the three and six month periods ended June 30, 2026 compared to the same periods in 2025 is primarily due to ceding and brokerage commissions and acquisition costs incurred on property and casualty risks that Essent Re began reinsuring effective January 1, 2026.

Current wording

•The increase in acquisition costs for the three and nine month periods ended September 30, 2026 compared to the same periods in 2025 is primarily due to ceding and brokerage commissions and acquisition costs incurred on property and casualty risks that Essent Re began reinsuring effective January 1, 2026.

Previous wording

•Other expenses increased for the three and six month periods ended June 30, 2026 compared to the same periods in 2025 as a result of increased professional fees incurred with the reinsurance of property and casualty risks beginning in the first quarter of 2026. Other expenses include professional fees, travel, marketing, hardware, software, rent, depreciation and amortization and other facilities expenses.

Current wording

•Other expenses increased for the three and nine month periods ended September 30, 2026 compared to the same periods in 2025 as a result of increased professional fees incurred with the reinsurance of property and casualty risks beginning in the first quarter of 2026. 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 increase in net premiums earned is due to an increase in title insurance policies issued in the three and six month periods ended June 30, 2026 compared to the same periods in 2025.

Current wording

Net premiums earned reported in Corporate & Other relate to premiums earned by our title insurance operations. The increase in net premiums earned is due to an increase in title insurance policies issued in the three and nine month periods ended September 30, 2026 compared to the same periods in 2025.