Amid an ongoing shift in pricing strategies in the private mortgage insurance market, Essent Group chairman and CEO Mark Casale is trying to show investors that aggressive pricing tactics aren't the only way PMI firms compete.
"Obviously, it's on turn-times, servicing, how often you're calling your clients. There's a lot more hard work and kind of shoe leather, sweat equity in the business that folks don't always appreciate," he said in response to a question on the pricing environment in the PMI industry during the company's third quarter earnings call.
Pricing has become a hot-button topic among analysts in the third quarter after Arch MI announced it will
"We're focused on growing the portfolio, remaining disciplined not just around pricing, around credit, around expenses, all the things that lead to a well-run insurance company," he said.
Risk-based pricing is a flexible model that charges lower premiums to borrowers with a better quality profile, and ups the prices on borrowers at the other end of the scale. Responding to a question about whether Essent could use a similar system to the one Arch is introducing (and United Guaranty already uses), "Well, again, don't get confused with the delivery of pricing, whether it's through rate cards or electronically. Those are just two different forms of pricing," he said. "We have the ability and, with a couple of clients, have delivered pricing electronically."
Essent now has $62.1 billion of insurance-in-force, an increase of nearly 34% from Sept. 30, 2014. It did $7.4 billion of new insurance written, compared with $7.3 billion in the third quarter last year.
Essent reported net income of $40.8 million for the quarter, compared with $25.1 million for the
