Enact Holdings, Inc.

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 nine months ended September 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”).

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 three months ended March 31, 2026 and 2025, and our audited consolidated financial statements and related notes for the years ended December 31, 2025 and 2024, within our Annual Report on Form 10-K for the fiscal year ending December 31, 2025 (the “Annual Report”).

Previous wording

Macroeconomic environment. Throughout 2025, the United States economy was subject to significant volatility and uncertainty, largely related to changing economic policies, including new and increasing tariffs, continued inflationary pressure, the then impending government shutdown 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.

Current wording

Macroeconomic environment. During the first quarter of 2026, the United States economy continued to be subject to significant volatility and uncertainty, largely related to geopolitical tensions including the Iran conflict, changing economic policies, and continued inflationary pressure. 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 September 2025 that Consumer Price Index (“CPI”) inflation was 3.0% year-over-year compared to 2.7% year-over-year in June 2025 while the unemployment rate has risen to 4.3% in August 2025 from 4.1% in June 2025. Elevated inflation remains a challenge for the Federal Open Market Committee as it navigates heightened uncertainty.

Current wording

The Bureau of Labor Statistics reported in March 2026 that Consumer Price Index (“CPI”) inflation was 3.3% year-over-year compared to 2.7% year-over-year in December 2025 while the unemployment rate has fallen slightly to 4.3% in March 2026 from 4.4% in December 2025. Elevated inflation remains a challenge for the Federal Open Market Committee as it navigates heightened uncertainty.

Previous wording

The U.S. mortgage origination market remained relatively slow in response to elevated mortgage rates. 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. Affordability pressures have eased slightly during the quarter as mortgage rates began to decline and national house price growth has slowed according to the Federal Housing Finance Agency (“FHFA”) Monthly Purchase-Only House Price Index (Seasonally Adjusted).

Current wording

U.S. mortgage rates were especially volatile during the first quarter of 2026. Lower rates earlier in the quarter drove higher refinance volume in the market, while the mortgage origination market remained relatively slow, particularly as rates rose later in the quarter. 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. Despite slowing of house price growth nationally according to the Federal Housing Finance Agency (“FHFA”) Monthly Purchase-Only House Price Index (Seasonally Adjusted), affordability remains challenged.

Previous wording

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 wording

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 since released preliminary implementation details and timelines, but the full impact of this initiative on our business, processes and financial results remains uncertain.

Previous wording

Our portfolio. New insurance written (“NIW”) of $14.0 billion in the third quarter of 2025 increased 3% compared to the third 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 83% during the third quarter of 2025 and 83% for the third quarter of 2024. The persistency rate continues to remain higher than historical averages 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 $12.8 billion in the first quarter of 2026 increased 30% compared to the first quarter of 2025. The increase is largely driven by refinance volume in the first quarter. Changes in NIW are primarily impacted by the size of the mortgage insurance market and our market share. Our primary persistency rate was 80% during the first quarter of 2026 and 84% for the first quarter of 2025. The persistency rate decreased largely due to lapse, driven by mortgage rate volatility and increased refinance activity.

Previous wording

Net earned premiums decreased modestly in the third quarter of 2025 compared to the third quarter of 2024 primarily as a result of higher ceded premiums partially offset by insurance in-force growth.

Current wording

Net earned premiums decreased modestly in the first quarter of 2026 compared to the first quarter of 2025 primarily as a result of higher ceded premiums and lapse-driven rate decline partially offset by insurance in-force and assumed premium growth.

Previous wording

Loss experience. Our loss ratio for the three months ended September 30, 2025, was 15% as compared to 5% for the three months ended September 30, 2024. Both periods were impacted by favorable reserve development. In the third quarter of 2025, we released $45 million of reserves, driven by cure performance of delinquencies from 2024 and prior. This compares to the third quarter of 2024, where we recorded a $65 million reserve release primarily driven by cure performance on delinquencies from 2023 and prior.

Current wording

Loss experience. Our loss ratio for the three months ended March 31, 2026, was 15% as compared to 12% for the three months ended March 31, 2025. Both periods were impacted by favorable reserve development. In the first quarter of 2026, we released $39 million of reserves, driven by cure performance and loss mitigation activities. This compares to the first quarter of 2025, where we recorded a $47 million reserve release driven by cure performance and loss mitigation activities.

Previous wording

New delinquencies in the third quarter of 2025 increased slightly compared to the third quarter of 2024 due to the normal loss development pattern on newer books. Current period primary delinquencies of 12,998 contributed $79 million of loss expense in the third quarter of 2025. This compares to $75 million of loss expense from 12,964 primary delinquencies that were reported in the third 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 first quarter of 2026 increased compared to the first quarter of 2025 due to the normal loss development pattern on newer books. Current period primary delinquencies of 13,559 contributed $76 million of loss expense in the first quarter of 2026. This compares to $75 million of loss expense from 12,237 primary delinquencies that were reported in the first quarter of 2025. 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 September 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 10.2:1, compared with risk-to-capital ratios of 10.5:1 and 10.4:1 as of December 31, 2024, and September 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.

Current wording

Capital requirements and ratings. As of March 31, 2026, 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 10.0:1, compared with risk-to-capital ratios of 10.1:1 and 10.5:1 as of December 31, 2025, and March 31, 2025, 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 September 30, 2025, we had estimated available assets of $4,974 million against $3,070 million net required assets under PMIERs compared to available assets of $4,992 million against $3,031 million net required assets as of June 30, 2025. The sufficiency ratio as of September 30, 2025, was 162%, or $1,904 million, above the PMIERs requirements, compared to 165%, or $1,961 million, above the PMIERs requirements as of June 30, 2025. Our PMIERs required assets benefited from a reinsurance credit of $1,889 million and $1,870 million related to third-party reinsurance as of September 30, 2025, and June 30, 2025, respectively.

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 March 31, 2026, we had estimated available assets of $5,016 million against $3,097 million net required assets under PMIERs compared to available assets of $5,015 million against $3,096 million net required assets as of December 31, 2025. The sufficiency ratio as of March 31, 2026, was 162%, or $1,919 million, above the PMIERs requirements, compared to 162%, or $1,919 million, above the PMIERs requirements as of December 31, 2025. Our PMIERs required assets benefited from a reinsurance credit of $1,944 million and $1,932 million related to third-party reinsurance as of March 31, 2026, and December 31, 2025, respectively.

Previous wording

Capital returns. In March, June and September 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 both June and September 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.

Current wording

Capital returns. In March 2026, our primary mortgage insurance operating company, EMICO, paid 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. In April 2025, we announced an increase of our dividend to $0.21 per common share which was paid quarterly through March 2026. In May 2026, we announced the increase of our quarterly dividend from $0.21 to $0.24 per common share, payable in June 2026. 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 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.

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 allowed for the repurchase of up to an additional $350 million of EHI’s common stock. The Company completed the repurchase of shares under this authorization during the first quarter of 2026. On February 3, 2026, we announced the authorization of a new share repurchase program that allows for the repurchase of up to an additional $500 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

(2)Loss ratio is calculated by dividing losses incurred by net earned premiums.

Current wording

(1)Loss ratio is calculated by dividing losses incurred by net earned premiums.

Previous wording

(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 wording

(2)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.

Previous wording

(4)Net earned premium rate is calculated by dividing direct earned premium less ceded premium, by average primary IIF.

Current wording

(3)Net earned premium rate is calculated by dividing direct earned premium less ceded premium, by average primary IIF.

Previous wording

Premiums decreased modestly for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily as a result of higher ceded premiums partially offset by insurance in-force growth. The net earned premium rate was 0.35% for the three months ended September 30, 2025, down slightly from 0.36% for the three months ended September 30, 2024.

Current wording

Premiums decreased modestly for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, as a result of higher ceded premiums and partially offset by insurance in-force and assumed premium growth. The net earned premium rate was 0.34% for the three months ended March 31, 2026, relatively consistent with 0.35% for the three months ended March 31, 2025.

Previous wording

Net investment losses in the third 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 first quarter of 2026 and 2025 were driven primarily by realized losses on the sale of fixed maturity securities.

Previous wording

Losses incurred during the third quarter of 2025 and 2024 were both impacted by prior year development. In the third quarter of 2025, we recorded a reserve release of $45 million, driven by cure performance of delinquencies from 2024 and prior years. In the third quarter of 2024, we recorded a reserve release of $65 million primarily related to cure performance of delinquencies from 2023 and prior years. Current period primary delinquencies of 12,998 contributed $79 million of loss expense in the three months ended September 30, 2025. This compares to $75 million of loss expense from 12,964 primary delinquencies in the three months ended September 30, 2024.

Current wording

Losses incurred during the first quarter of 2026 and 2025 were both impacted by prior year development. In the first quarter of 2026, we recorded a reserve release of $39 million, driven by cure performance and loss mitigation activities. In the first quarter of 2025, we recorded a reserve release of $47 million primarily related to cure performance of delinquencies and loss mitigation activities. Current period primary delinquencies of 13,559 contributed $76 million of loss expense in the three months ended March 31, 2026. This compares to $75 million of loss expense from 12,237 primary delinquencies in the three months ended March 31, 2025.

Previous wording

Acquisition and operating expenses, net of deferrals, decreased for the three months ended September 30, 2025, primarily due to restructuring activities in 2024 and higher ceding commissions.

Current wording

Acquisition and operating expenses, net of deferrals, decreased for the three months ended March 31, 2026, primarily due to higher ceding commissions and lower professional services expenses.

Previous wording

The effective tax rate was 22.1% and 21.3% for the three months ended September 30, 2025 and 2024, respectively, consistent with the United States corporate federal income tax rate.

Current wording

The effective tax rate was 21.4% and 21.6% for the three months ended March 31, 2026 and 2025, respectively, consistent with the United States corporate federal income tax rate.

Previous wording

Adjusted operating income decreased for the nine months ended September 30, 2025, as compared to September 30, 2024, primarily due to higher losses, partially offset by higher net investment income and lower expenses.

Current wording

Adjusted operating income increased for the three months ended March 31, 2026, as compared to March 31, 2025, primarily due to higher net investment income and lower expenses, partially offset by higher losses.

Previous wording

IIF increased since December 31, 2024, as NIW outpaced policy lapse and cancellations. The primary persistency rate was 83% for the three months ended September 30, 2025 and 2024. RIF increased since December 31, 2024 primarily as a result of higher IIF.

Current wording

IIF decreased since December 31, 2025, as policy lapse and cancellations outpaced NIW. The primary persistency rate was 80% and 84% for the three months ended March 31, 2026 and 2025, respectively. RIF remained relatively flat from December 31, 2025.

Previous wording

The total reserves as a percentage of RIF as of September 30, 2025, has increased slightly compared to December 31, 2024, as a result of fewer newer delinquencies that have a lower expected claim rate.

Current wording

The total reserves as a percentage of RIF as of March 31, 2026, has remained consistent compared to December 31, 2025.

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 September 30, 2025, our 2018 and newer policy years represented approximately 95% of our primary RIF and 85% 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 March 31, 2026, our 2019 and newer policy years represented approximately 94% of our primary RIF and 84% of our total direct primary case reserves.

Previous 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, changes in reserves and the timing of tax payments.

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 remained relatively flat as lower expenses and premiums were offset by higher net investment income. Cash flows from operations were also impacted by net investment losses, changes in reserves and the timing of tax payments.

Previous wording

During the nine months ended September 30, 2025, our cash flows from financing activities included dividends paid of $91 million and share repurchases of $255 million. The amount and timing of future dividends is discussed within “—Trends and Conditions” as well as below. During the nine months ended September 30, 2024, our cash flows from financing activities included dividends paid of $83 million and share repurchases of $169 million. Our cash flows from financing activities during the nine months ended September 30, 2024 also included the issuance of our 2029 Notes and the redemption of our 2025 Notes.

Current wording

During the three months ended March 31, 2026, our cash flows from financing activities included dividends paid of $30 million and share repurchases of $93 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, 2025, our cash flows from financing activities included dividends paid of $28 million and share repurchases of $65 million.

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 $3 million as of September 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.

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 approximately $52 million as of March 31, 2026, 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

EMICO paid dividends of approximately $130 million, $130 million and $200 million in September 2025, 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.

Current wording

EMICO paid a dividend of approximately $150 million in March 2026 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

In addition to the restrictions described above, all dividends from EHI are subject to Genworth consent and EHI Board of Directors approval.

Current wording

In addition to the restrictions described above, all dividends from EHI are subject to Genworth’s consent and EHI Board of Directors’ approval.

Previous wording

As of September 30, 2025, we maintained liquidity in the form of cash and cash equivalents of $544 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 March 31, 2026, we maintained liquidity in the form of cash and cash equivalents of $549 million compared to $582 million as of December 31, 2025, 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 nine months ended September 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.

Current wording

Refer to Note 2 in our unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025, and in our audited consolidated financial statements for the years ended December 31, 2025 and 2024, for a discussion of recently adopted and not yet adopted accounting standards.