United Guaranty Corp. posted a $45 million operating loss for the fourth quarter, compared with a $25 million operation loss one year prior, according to its parent company, American International Group. The results reflect a lengthening of foreclosure timelines and a change in estimated ultimate cure rate, both of which negatively impacted loss reserves.
AIG had a $4 billion net loss in 4Q12, due to a $4.4 billion loss related to the sale of International Lease Finance Corp. and a $1.3 billion post-tax loss related to Hurricane Sandy.
UGC had net premiums written of $236 million in 4Q12, up from $200 million in 4Q11. New insurance written was $11.6 billion, up from $7.1 billion.
The company has been running neck and neck with Radian Guaranty for No. 1 in NIW market share for the past year. Previously, Radian reported 4Q12 NIW of $11.7 billion. Both companies have been aggressive in their attempts to grow business and in the AIG release, the growth of UGC’s NIW is attributed to an expanded sales force, new lender customers, added distribution channels and the exit of two competitors in August 2011.
But there are new clean sheet competitors looking to challenge UGC and Radian (along with MGIC and Genworth). Essent has been active for some time now, National MI is on the verge of becoming active and Arch Capital has acquired CMG from PMI and CUNA Mutual.
Delinquencies at UGC declined 80 basis points from 3Q12 to 8.8%. For 4Q11, they were 13.9%.