Enact Holdings, Inc.
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 1, 2025
ACT$46.43-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001823529-25-000124
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001823529-25-000187
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 171 previous paragraphs and 192 current paragraphs.
134 unchanged; 33 reworded; 16 added; 3 removed; 1 previous and 9 current paragraphs rearranged.
Tables are not compared: 40 previous and 43 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
In July 2025, the FHFA announced that it will implement the acceptance of VantageScore 4.0 for mortgages delivered to Fannie Mae and Freddie Mac. The GSEs have not yet released implementation details and timelines, and the full impact of this initiative on our business, processes and financial results remains uncertain.
Current report
Acquisition and operating expenses, net of deferrals, decreased for the three months ended June 30, 2025, primarily due to severance expenses as a part of restructuring activities in 2024.
Current report
The expense ratio decreased primarily as a result of lower expenses.
Current report
The loss on debt extinguishment for the three months ended June 30, 2024, relates to the expenses incurred associated with the redemption of our 2025 Notes.
Current report
Six months ended June 30, 2025, compared to six months ended June 30, 2024
Current report
Revenues
Current report
Net investment income increased for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily attributable to an increase in investment yields and higher average invested assets.
Current report
Losses and expenses
Current report
Losses incurred during the first six months of 2025 and 2024 were both impacted by favorable reserve adjustments. During the first six months of 2025, we released reserves of $95 million primarily on prior accident year reserves driven by cure performance of delinquencies from early 2024 and prior years. During the first six months of 2024, we released reserves of $131 million primarily due to better than expected cure performance on delinquencies from 2023 and prior years. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment. New primary delinquencies of 23,804 contributed $144 million of loss expense in the first six months of 2025. This compares to $134 million of loss expense from 21,856 new primary delinquencies in the first six months of 2024.
Current report
(1)Excludes other reserves.
Current report
Acquisition and operating expenses, net of deferrals, decreased slightly driven primarily by severance expenses as a part of restructuring activities in 2024.
Current report
The loss on debt extinguishment for the six months ended June 30, 2024, relates to the expenses incurred associated with the redemption of our 2025 Notes.
Current report
Provision for income taxes
Current report
The effective tax rate was 21.7% and 21.8% for the six months ended June 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.
Current report
Adjusted operating income decreased for the three months ended June 30, 2025, as compared to June 30, 2024, primarily due to higher losses, partially offset by higher net investment income.
Current report
NIW for the three months ended June 30, 2025, remained relatively consistent with the three months ended June 30, 2024.
Removed paragraphs (3)
Previous report
On October 24, 2022, the FHFA announced the validation and approval of both the FICO 10T credit score model and the VantageScore 4.0 credit score model for anticipated use by the GSEs as well as proposing to change the requirement that lenders provide credit reports from all three nationwide consumer reporting agencies and instead only requiring credit reports from two of the three nationwide credit reporting agencies. The validation of the new credit scores is currently expected to require lenders to deliver both credit scores for each loan sold to the GSEs. Implementation, which has been delayed beyond 2025, will require system and process updates along with coordination across stakeholders of the industry.
Previous report
Acquisition and operating expenses, net of deferrals, remained relatively flat for the three months ended March 31, 2025.
Previous report
NIW for the three months ended March 31, 2025, decreased 7% compared to the three months ended March 31, 2024 primarily due to lower estimated market share.
Reworded paragraphs (33)
Previous wording
The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes for the three months ended March 31, 2025 and 2024, and our audited consolidated financial statements and related notes for the years ended December 31, 2024 and 2023 within our Annual Report on Form 10-K for the fiscal year ending December 31, 2024 (the “Annual Report”).
Current wording
The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes for the six months ended June 30, 2025 and 2024, and our audited consolidated financial statements and related notes for the years ended December 31, 2024 and 2023 within our Annual Report on Form 10-K for the fiscal year ending December 31, 2024 (the “Annual Report”).
Previous wording
Macroeconomic environment. While inflation remained elevated in the first quarter of 2025, household balance sheets were supported by low rates of unemployment and continued earnings growth. Beginning in April 2025, the United States economy became subject to significant volatility and uncertainty, largely related to changing economic policies, including new and increasing tariffs. The ancillary effects of these tariffs and other economic policy on the domestic and global economies could materially impact the United States housing markets and our business.
Current wording
Macroeconomic environment. While inflation remained elevated through the second quarter of 2025, household balance sheets were supported by low rates of unemployment and continued earnings growth. Beginning in April 2025, the United States economy became subject to significant volatility and uncertainty, largely related to changing economic policies, including new and increasing tariffs as well as certain domestic and geopolitical tensions. The ancillary effects of these factors on the domestic and global economies could materially impact the United States housing markets and our business.
Previous wording
The Bureau of Labor Statistics reported in March 2025 that Consumer Price Index (“CPI”) inflation was 2.4% year-over-year compared to 2.9% year-over-year in December 2024. Elevated inflation remains a challenge for the Federal Open Market Committee as it navigates heightened uncertainty. Mortgage rates remain elevated as well.
Current wording
The Bureau of Labor Statistics reported in June 2025 that Consumer Price Index (“CPI”) inflation was 2.7% year-over-year compared to 2.4% year-over-year in March 2025. Elevated inflation remains a challenge for the Federal Open Market Committee as it navigates heightened uncertainty.
Previous wording
Mortgage origination remained slow in the first quarter of 2025 in response to elevated mortgage rates and sustained low housing supply. Over the past few years, housing affordability has deteriorated as elevated mortgage rates and home price appreciation outpaced median family income according to the National Association of Realtors Housing Affordability Index. National house prices continued to rise into 2025 according to the Federal Housing Finance Agency (“FHFA”) Monthly Purchase-Only House Price Index (Seasonally Adjusted).
Current wording
Mortgage origination activity remained slow in the second quarter of 2025 in response to elevated mortgage rates and sustained low housing supply. Over the past few years, housing affordability has deteriorated as elevated mortgage rates and home price appreciation outpaced median family income according to the National Association of Realtors Housing Affordability Index. National house price growth has slowed into 2025 according to the Federal Housing Finance Agency (“FHFA”) Monthly Purchase-Only House Price Index (Seasonally Adjusted).
Previous wording
The unemployment rate as of March 31, 2025, was 4.2%, relatively consistent with December 31, 2024. As of March 31, 2025, the number of unemployed Americans stood at approximately 7.1 million and the number of long-term unemployed Americans (over 26 weeks out of the workforce) was approximately 1.5 million.
Current wording
The unemployment rate as of June 30, 2025, was 4.1%, relatively consistent with March 31, 2025. As of June 30, 2025, the number of unemployed Americans stood at approximately 7.0 million and the number of long-term unemployed Americans (over 26 weeks out of the workforce) was approximately 1.6 million.
Previous wording
Our portfolio. New insurance written (“NIW”) of $9.8 billion in the first quarter of 2025 decreased 7% compared to the first quarter of 2024 driven primarily by lower estimated market share. Our primary persistency rate was 84% during the first quarter of 2025 and 85% for the first quarter of 2024. The persistency rate remains higher than historical levels driven by a large percentage of our in-force policies with mortgage rates below current mortgage rates.
Current wording
Our portfolio. New insurance written (“NIW”) of $13.3 billion in the second quarter of 2025 decreased 3% compared to the second quarter of 2024. Changes in NIW are primarily impacted by the size of the mortgage insurance market and our market share. Our primary persistency rate was 82% during the second quarter of 2025 and 83% for the second quarter of 2024. The persistency rate continues to remain higher than historical levels driven by a large percentage of our in-force policies with mortgage rates below current mortgage rates.
Previous wording
Net earned premiums increased approximately 2% in the first quarter of 2025 compared to the first quarter of 2024 primarily as a result of higher assumed premiums and insurance in-force growth, partially offset by higher ceded premiums.
Current wording
Net earned premiums increased modestly in the second quarter of 2025 compared to the second quarter of 2024 primarily as a result of higher assumed premiums and insurance in-force growth, partially offset by higher ceded premiums.
Previous wording
Loss experience. Our loss ratio for the three months ended March 31, 2025, was 12% as compared to 8% for the three months ended March 31, 2024. Both periods were impacted by favorable reserve development. In the first quarter of 2025, we released $47 million of reserves, driven by cure performance of delinquencies from early 2024 and prior. This compares to the first quarter of 2024, where we recorded a $54 million reserve release primarily on delinquencies from early 2023 and prior.
Current wording
Loss experience. Our loss ratio for the three months ended June 30, 2025, was 10% as compared to (7)% for the three months ended June 30, 2024. Both periods were impacted by favorable reserve development. In the second quarter of 2025, we released $48 million of reserves, driven by cure performance of delinquencies from early 2024 and prior. This compares to the second quarter of 2024, where we recorded a $77 million reserve release primarily driven by cure performance on delinquencies from 2023 and prior. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment.
Previous wording
New delinquencies in the first quarter of 2025 increased compared to the first quarter of 2024 due primarily to aging of our large, newer books. Current period primary delinquencies of 12,237 contributed $75 million of loss expense in the first quarter of 2025. We incurred $74 million of losses from 11,395 delinquencies that were reported in the first quarter of 2024. In determining the loss expense estimate, considerations were given to recent cure and claim experience and the prevailing and prospective economic conditions.
Current wording
New delinquencies in the second quarter of 2025 increased compared to the second quarter of 2024 due to the normal loss development pattern on newer books. Current period primary delinquencies of 11,567 contributed $69 million of loss expense in the second quarter of 2025. This compares to $60 million of loss expense from 10,461 delinquencies that were reported in the second quarter of 2024. In determining the loss expense estimate, considerations were given to recent cure and claim experience and the prevailing and prospective economic conditions.
Previous wording
Capital requirements and ratings. As of March 31, 2025, EMICO’s estimated risk-to-capital ratio under North Carolina law and enforced by the North Carolina Department of Insurance (“NCDOI”), EMICO’s domestic insurance regulator, was 10.5:1, compared with risk-to-capital ratios of 10.5:1 and 11.2:1 as of December 31, 2024, and March 31, 2024, respectively. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1. North Carolina’s calculation of risk-to-capital excludes the risk in-force for delinquent loans given the established loss reserves against all delinquencies. EMICO’s ongoing risk-to-capital ratio will depend principally on the magnitude of future losses incurred by EMICO, the effectiveness of ongoing loss mitigation activities, new business volume and profitability, the impact of quota share reinsurance, the amount of policy lapses and the amount of additional capital that is generated or distributed by the business.
Current wording
Capital requirements and ratings. As of June 30, 2025, EMICO’s estimated risk-to-capital ratio under North Carolina law and enforced by the North Carolina Department of Insurance (“NCDOI”), EMICO’s domestic insurance regulator, was 10.3:1, compared with risk-to-capital ratios of 10.5:1 and 10.8:1 as of December 31, 2024, and June 30, 2024, respectively. EMICO’s risk-to-capital ratio remains below the NCDOI’s maximum risk-to-capital ratio of 25:1. North Carolina’s calculation of risk-to-capital excludes the risk in-force for delinquent loans given the established loss reserves against all delinquencies. EMICO’s ongoing risk-to-capital ratio will depend principally on the magnitude of future losses incurred by EMICO, the effectiveness of ongoing loss mitigation activities, new business volume and profitability, the impact of quota share reinsurance, the amount of policy lapses and the amount of additional capital that is generated or distributed by the business.
Previous wording
Under PMIERs, we are subject to operational and financial requirements that private mortgage insurers must meet in order to remain eligible to insure loans that are purchased by the GSEs. As of March 31, 2025, we had estimated available assets of $4,999 million against $3,033 million net required assets under PMIERs compared to available assets of $5,095 million against $3,043 million net required assets as of December 31, 2024. The sufficiency ratio as of March 31, 2025, was 165%, or $1,966 million, above the PMIERs requirements, compared to 167%, or $2,052 million, above the PMIERs requirements as of December 31, 2024. Our PMIERs required assets benefited from a reinsurance credit of $1,880 million and $1,885 million related to third-party reinsurance as of March 31, 2025, and December 31, 2024, respectively. Our PMIERs required assets as of December 31, 2024, benefited from the application of a 0.30 multiplier applied to the risk-based required asset amount factor for certain non-performing loans as defined under PMIERs. The application of the 0.30 multiplier to all eligible delinquencies provided $28 million of benefit to our PMIERs required assets as of December 31, 2024. Use of the multiplier was discontinued effective March 31, 2025.
Current wording
Under PMIERs, we are subject to operational and financial requirements that private mortgage insurers must meet in order to remain eligible to insure loans that are purchased by the GSEs. As of June 30, 2025, we had estimated available assets of $4,992 million against $3,031 million net required assets under PMIERs compared to available assets of $4,999 million against $3,033 million net required assets as of March 31, 2025. The sufficiency ratio as of June 30, 2025, was 165%, or $1,961 million, above the PMIERs requirements, compared to 165%, or $1,966 million, above the PMIERs requirements as of March 31, 2025. Our PMIERs required assets benefited from a reinsurance credit of $1,870 million and $1,880 million related to third-party reinsurance as of June 30, 2025, and March 31, 2025, respectively.
Previous wording
Subsequent to quarter end we announced an increase of our quarterly dividend to $0.21 per common share. Future dividend payments are subject to quarterly review and approval by our Board of Directors and Genworth and will be targeted to be paid in the third month of each quarter.
Current wording
Capital returns. In March and June 2025, our primary mortgage insurance operating company, EMICO, paid dividends to EHI that support our ability to return capital to shareholders. We paid a dividend of $0.185 per common share during the first quarter of 2025. In April 2025, we announced an increase of our quarterly dividend to $0.21 per common share which was paid in June 2025. Future dividend payments are subject to quarterly review and approval by our Board of Directors and Genworth and will be targeted to be paid in the third month of each quarter.
Previous wording
On May 1, 2024, we announced the authorization of a share repurchase program that allows for the repurchase of up to $250 million of EHI’s common stock. On April 30, 2025, we announced the authorization of a new share repurchase program that allows for the repurchase of an additional $350 million of EHI’s common stock. Under the programs, share repurchases may be made at our discretion from time to time in open market transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans. In support, Enact has entered into an agreement with Genworth Holdings, Inc. to repurchase its Enact shares as part of the program to maintain Genworth’s current ownership interest in Enact. We expect the timing and amount of any future share repurchases will be opportunistic and will depend on a variety of factors, including EHI’s share price, capital availability, business and market conditions, regulatory requirements, and debt covenant restrictions. The programs do not obligate EHI to acquire any amount of common stock, it may be suspended or terminated at any time at the Company’s discretion without prior notice, and it does not have a specified expiration date.
Current wording
On May 1, 2024, we announced the authorization of a share repurchase program that allowed for the repurchase of up to $250 million of EHI’s common stock. The company completed the repurchase of shares under this authorization in the second quarter of 2025. On April 30, 2025, we announced the authorization of a new share repurchase program that allows for the repurchase of up to an additional $350 million of EHI’s common stock. Under the programs, share repurchases may be made at our discretion from time to time in open market transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, or by other means, including through Rule 10b5-1 trading plans. In support, Enact has entered into an agreement with Genworth Holdings, Inc. to repurchase its Enact shares as part of the program to maintain Genworth’s current ownership interest in Enact. We expect the timing and amount of any future share repurchases will be opportunistic and will depend on a variety of factors, including EHI’s share price, capital availability, business and market conditions, regulatory requirements, and debt covenant restrictions. The programs do not obligate EHI to acquire any amount of common stock, may be suspended or terminated at any time at the Company’s discretion without prior notice, and do not have a specified expiration date.
Previous wording
Premiums increased for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily as a result of increased assumed premiums and insurance in-force growth, partially offset by higher ceded premiums. The net earned premium rate was 0.35% for the three months ended March 31, 2025, down slightly from 0.36% for the three months ended March 31, 2024.
Current wording
Premiums increased modestly for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily as a result of higher assumed premiums and insurance in-force growth, partially offset by higher ceded premiums. The net earned premium rate was 0.35% for the three months ended June 30, 2025, down slightly from 0.36% for the three months ended June 30, 2024.
Previous wording
Net investment losses in the first quarter of 2025 and 2024 were driven primarily by realized losses on the sale of fixed maturity securities.
Current wording
Net investment losses in the second quarter of 2025 and 2024 were driven primarily by realized losses on the sale of fixed maturity securities.
Previous wording
Losses incurred during the first quarter of 2025 and 2024 were both impacted by prior year development. In the first quarter of 2025, we recorded a reserve release of $47 million, driven by cure performance of delinquencies from early 2024 and prior years. In the first quarter of 2024, we recorded a reserve release of $54 million primarily related to delinquencies from early 2023 and prior years. Current period primary delinquencies of 12,237 contributed $75 million of loss expense in the three months ended March 31, 2025. This compares to $74 million of loss expense from 11,395 primary delinquencies in the first quarter of 2024.
Current wording
Losses incurred during the second quarter of 2025 and 2024 were both impacted by prior year development. In the second quarter of 2025, we recorded a reserve release of $48 million, driven by cure performance of delinquencies from early 2024 and prior years. In the second quarter of 2024, we recorded a reserve release of $77 million primarily related to cure performance of delinquencies from 2023 and prior years. As part of the reserve adjustments in 2024, we also decreased our claim rate assumptions for new and existing delinquencies as a result of sustained favorable cure performance and lessening uncertainty in the economic environment. Current period primary delinquencies of 11,567 contributed $69 million of loss expense in the three months ended June 30, 2025. This compares to $60 million of loss expense from 10,461 primary delinquencies in the three months ended June 30, 2024.
Previous wording
The effective tax rate was 21.6% and 21.8% for the three months ended March 31, 2025 and 2024, respectively.
Current wording
The effective tax rate was 21.8% and 21.8% for the three months ended June 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.
Previous wording
The expense ratio decreased slightly as a result of premium growth outpacing increases in expenses.
Current wording
The expense ratio decreased as a result of the combination of premium growth and lower expenses.
Previous wording
Interest expense primarily relates to our 2029 Notes. For additional details see Note 7 to our unaudited condensed consolidated financial statements for the three months ended March 31, 2025 and 2024.
Current wording
Interest expense primarily relates to our 2025 Notes and 2029 Notes. For additional details see Note 7 to our unaudited condensed consolidated financial statements.
Previous wording
(i)Net investment gains (losses) — The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities or exposure management. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized gains and losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted operating income.
Current wording
(i)Net investment gains (losses) — The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities or exposure management. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized gains and losses. We do not view them as indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted operating income.
Previous wording
(iii)Gains (losses) on the extinguishment of debt are also excluded from adjusted operating income, as we do not view them to be indicative of overall operating trends.
Current wording
(iii)Gains (losses) on the extinguishment of debt are also excluded from adjusted operating income, as we do not view them as indicative of overall operating trends.
Previous wording
Adjusted operating income increased for the three months ended March 31, 2025, as compared to March 31, 2024, primarily due to increases in net investment income and earned premiums, partially offset by higher losses.
Current wording
Adjusted operating income decreased for the six months ended June 30, 2025, as compared to June 30, 2024, primarily due to higher losses, partially offset by higher net investment income and premiums.
Previous wording
IIF decreased since December 31, 2024, as policy lapse and cancellations outpaced NIW. The primary persistency rate was 84% and 85% for the three months ended March 31, 2025 and 2024, respectively. RIF decreased since December 31, 2024 primarily as a result of lower IIF.
Current wording
IIF increased since December 31, 2024, as NIW outpaced policy lapse and cancellations. The primary persistency rate was 82% and 83% for the three months ended June 30, 2025 and 2024, respectively. RIF increased since December 31, 2024 primarily as a result of higher IIF.
Previous wording
Loss reserves in policy years 2008 and prior are outsized compared to their representation of RIF. The size of these policy years at origination, particularly 2005 through 2008, combined with the significant decline in home prices led to significant losses in policy years prior to 2009. Although uncertainty remains with respect to the ultimate losses we will experience on these policy years, they have become a smaller percentage of our total mortgage insurance portfolio. The concentration of loss reserves has shifted to newer book years in line with changes in RIF. As of March 31, 2025, our 2018 and newer policy years represented approximately 95% of our primary RIF and 81% of our total direct primary case reserves.
Current wording
Loss reserves in policy years 2008 and prior are outsized compared to their representation of RIF. The size of these policy years at origination, particularly 2005 through 2008, combined with the significant decline in home prices led to significant losses in policy years prior to 2009. Although uncertainty remains with respect to the ultimate losses we will experience on these policy years, they have become a smaller percentage of our total mortgage insurance portfolio. The concentration of loss reserves has shifted to newer book years in line with changes in RIF. As of June 30, 2025, our 2018 and newer policy years represented approximately 95% of our primary RIF and 83% of our total direct primary case reserves.
Previous wording
As of March 31, 2025, and December 31, 2024, 99% and 99% of our investment portfolio was rated investment grade, respectively. The following table presents the security ratings of our fixed maturity securities as of the dates indicated:
Current wording
As of both June 30, 2025, and December 31, 2024, 99% of our investment portfolio was rated investment grade. The following table presents the security ratings of our fixed maturity securities as of the dates indicated:
Previous wording
Our most significant source of operating cash flows is from premiums received from our insurance policies, while our most significant uses of operating cash flows are generally for claims paid on our insured policies and our operating expenses. Net cash provided by operating activities increased largely due to higher net investment income and premiums and the timing of tax payments. Cash flows from operations were also impacted by net investment losses and changes in reserves and unearned premiums.
Current wording
Our most significant source of operating cash flows is premiums received from our insurance policies, while our most significant uses of operating cash flows are generally for claims paid on our insured policies and our operating expenses. Net cash provided by operating activities increased largely due to higher net investment income and premiums. Cash flows from operations were also impacted by net investment losses and changes in reserves and unearned premiums.
Previous wording
During the three months ended March 31, 2025, our cash flows from financing activities included dividends paid of $28 million and share repurchases of $65 million. The amount and timing of future dividends is discussed within “—Trends and Conditions” as well as below. During the three months ended March 31, 2024, our cash flows from financing activities included dividends paid of $25 million and share repurchases of $50 million.
Current wording
During the six months ended June 30, 2025, our cash flows from financing activities included dividends paid of $60 million and share repurchases of $150 million. The amount and timing of future dividends is discussed within “—Trends and Conditions” as well as below. During the six months ended June 30, 2024, our cash flows from financing activities included dividends paid of $55 million and share repurchases of $98 million. Our cash flows from financing activities during the six months ended June 30, 2024 also included the issuance of our 2029 Notes and the redemption of our 2025 Notes.
Previous wording
The ability of our regulated insurance operating subsidiaries to pay dividends and distributions to us is restricted by certain provisions of North Carolina insurance laws. Our insurance subsidiaries may pay dividends only from unassigned surplus; payments made from sources other than unassigned surplus, such as paid-in and contributed surplus, are categorized as distributions. Notice of all dividends must be submitted to the Commissioner of the NCDOI (the “Commissioner”) within 5 business days after declaration of the dividend, and at least 30 days before payment thereof. No dividend may be paid until 30 days after the Commissioner has received notice of the declaration thereof and (i) has not within that period disapproved the payment or (ii) has approved the payment within the 30-day period. Any distribution, regardless of amount, requires that same 30-day notice to the Commissioner, but also requires the Commissioner’s affirmative approval before being paid. Based on our estimated statutory results and in accordance with applicable dividend restrictions, our insurance subsidiaries have the capacity to pay dividends from unassigned surplus of $194 million as of March 31, 2025, with 30-day advance notice to the Commissioner of the intent to pay. In addition to dividends and distributions, alternative mechanisms, such as share repurchases, subject to any requisite regulatory approvals, may be utilized from time to time to upstream surplus.
Current wording
The ability of our regulated insurance operating subsidiaries to pay dividends and distributions to us is restricted by certain provisions of North Carolina insurance laws. Our insurance subsidiaries may pay dividends only from unassigned surplus; payments made from sources other than unassigned surplus, such as paid-in and contributed surplus, are categorized as distributions. Notice of all dividends must be submitted to the Commissioner of the NCDOI (the “Commissioner”) within 5 business days after declaration of the dividend, and at least 30 days before payment thereof. No dividend may be paid until 30 days after the Commissioner has received notice of the declaration thereof and (i) has not within that period disapproved the payment or (ii) has approved the payment within the 30-day period. Any distribution, regardless of amount, requires that same 30-day notice to the Commissioner, but also requires the Commissioner’s affirmative approval before being paid. Based on our estimated statutory results and in accordance with applicable dividend restrictions, our insurance subsidiaries have the capacity to pay dividends from unassigned surplus of $64 million as of June 30, 2025, with 30-day advance notice to the Commissioner of the intent to pay. In addition to dividends and distributions, alternative mechanisms, such as share repurchases, subject to any requisite regulatory approvals, may be utilized from time to time to upstream surplus.
Previous wording
In addition, we review multiple other considerations in parallel to determine a prospective dividend strategy for our regulated insurance operating subsidiaries. Given the regulatory focus on the reasonableness of an insurer’s surplus in relation to its outstanding liabilities and the adequacy of its surplus relative to its financial needs for any dividend, our insurance subsidiaries consider the minimum amount of policyholder surplus after giving effect to any contemplated future dividends. Regulatory minimum policyholder surplus is not codified in North Carolina law and limitations may vary based on prevailing business conditions including, but not limited to, the prevailing and future macroeconomic conditions. We estimate regulators would require a minimum policyholder surplus of approximately $300 million to meet their threshold standard. We are subject to statutory accounting requirements that establish a contingency reserve of at least 50% of net earned premiums annually for ten years, after which time it is released into policyholder surplus. While we began 10-year contingency reserve releases during 2024, minimum policyholder surplus could be a limitation on the future dividends of our regulated operating subsidiaries.
Current wording
In addition, we review multiple other considerations in parallel to determine a prospective dividend strategy for our regulated insurance operating subsidiaries. Given the regulatory focus on the reasonableness of an insurer’s surplus in relation to its outstanding liabilities and the adequacy of its surplus relative to its financial needs for any dividend, our insurance subsidiaries consider the minimum amount of policyholder surplus after giving effect to any contemplated future dividends. Regulatory minimum policyholder surplus is not codified in North Carolina law and limitations may vary based on prevailing business conditions including, but not limited to, the prevailing and future macroeconomic conditions. We are subject to statutory accounting requirements that establish a contingency reserve of at least 50% of net earned premiums annually for ten years, after which time it is released into policyholder surplus. While we began 10-year contingency reserve releases during 2024, minimum policyholder surplus could be a limitation on the future dividends of our regulated operating subsidiaries.
Previous wording
In March 2025, EMICO completed a dividend of approximately $200 million that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility. We intend to continue to use future EMICO dividends and distributions for these purposes.
Current wording
EMICO paid dividends of approximately $130 million and $200 million in June 2025 and March 2025, respectively, that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility. We intend to continue to use future EMICO dividends and distributions for these purposes.
Previous wording
The credit agreement entered into in connection with the Facility contains customary restrictions on EHI’s ability to pay cash dividends. Under the credit agreement, EHI is permitted to make cash distributions (1) so long as no Default or Event of Default (as each are defined in the credit agreement) has occurred and is continuing and EHI is in pro forma compliance with its financial covenants as described below, at the time of and after giving effect to such payment, (2) within 60 days of declaration of any cash dividend so long as the payment was permitted under the credit agreement at the time of such declaration and (3) other customary exceptions as more fully set forth in the credit agreement.
Current wording
The credit agreement entered into in connection with the Facility contains customary restrictions on EHI’s ability to pay cash dividends. Under the credit agreement, EHI is permitted to make cash distributions (1) so long as no Default or Event of Default (as each is defined in the credit agreement) has occurred and is continuing and EHI is in pro forma compliance with its financial covenants as described below, at the time of and after giving effect to such payment, (2) within 60 days of declaration of any cash dividend so long as the payment was permitted under the credit agreement at the time of such declaration and (3) other customary exceptions as more fully set forth in the credit agreement.
Previous wording
As of March 31, 2025, we maintained liquidity in the form of cash and cash equivalents of $635 million compared to $599 million as of December 31, 2024, and we also held significant levels of investment-grade fixed maturity securities and short-term investments that can be monetized should our cash and cash equivalents be insufficient to meet our obligations.
Current wording
As of June 30, 2025, we maintained liquidity in the form of cash and cash equivalents of $613 million compared to $599 million as of December 31, 2024, and we also held significant levels of investment-grade fixed maturity securities and short-term investments that can be monetized should our cash and cash equivalents be insufficient to meet our obligations.
Previous wording
Refer to Note 2 in our unaudited condensed consolidated financial statements for the three months ended March 31, 2025 and 2024, and in our audited consolidated financial statements for the years ended December 31, 2024 and 2023, for a discussion of recently adopted and not yet adopted accounting standards.
Current wording
Refer to Note 2 in our unaudited condensed consolidated financial statements for the six months ended June 30, 2025 and 2024, and in our audited consolidated financial statements for the years ended December 31, 2024 and 2023, for a discussion of recently adopted and not yet adopted accounting standards.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Interest expense primarily relates to our 2029 Notes. For additional details see Note 7 to our unaudited condensed consolidated financial statements.
Current report — wording carried from elsewhere
The following table sets forth our consolidated results for the periods indicated:
Current report — wording carried from elsewhere
(1)We define “NM” as not meaningful for increases or decreases greater than 300%.
Current report — wording carried from elsewhere
(2)Loss ratio is calculated by dividing losses incurred by net earned premiums.
Current report — wording carried from elsewhere
(3)Expense ratio is calculated by dividing acquisition and operating expenses, net of deferrals, plus amortization of deferred acquisition costs and intangibles by net earned premiums.
Current report — wording carried from elsewhere
(4)Net earned premium rate is calculated by dividing direct earned premium less ceded premium, by average primary IIF.
Current report — wording carried from elsewhere
Premiums increased for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily attributable to insurance in-force growth and higher assumed premiums, partially offset by higher ceded premiums. The net earned premium rate was 0.35% for the six months ended June 30, 2025, down slightly from 0.36% for the six months ended June 30, 2024.
Current report — wording carried from elsewhere
Net investment losses in both periods were driven primarily by realized losses on the sale of fixed maturity securities.
Current report — wording carried from elsewhere
The following table shows incurred losses for domestic mortgage insurance related to current and prior accident years for the periods indicated:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Capital returns. In March 2025, our primary mortgage insurance operating company, EMICO, completed a dividend to EHI that supports our ability to return capital to shareholders. We paid a dividend of $0.185 per common share during the first quarter of 2025.