Can 1Q's positive MI results carry into rest 2025?

May 9, 2025 3:52 PM

A similar share of consumers used private mortgage insurance as credit enhancement in the first quarter compared with the prior year, but only one underwriter exceeded $10 billion in new insurance written.

This narrowed the market share spread among the six active underwriters, according to data compiled by Keefe, Bruyette & Woods.

As a group, NIW totaled $57.9 billion, down from the fourth quarter's $78.3 billion and relatively flat with $58.2 billion produced in the first quarter of 2024.

During the first quarter, lenders originated $384 billion, slightly more than $377 billion done one-year prior, according to the Mortgage Bankers Association. By units, 1.068 million were produced in the period ended March 31, compared with 1.076 million for the same three months in 2024.

"MI management teams across the industry continue to stress that pricing remains balanced and constructive, and that recent increase in macro uncertainty has not significantly shifted pricing dynamics to date," Bose George, an analyst at KBW, wrote in the earnings wrap report for NMI Holdings.

The following is a roundup of the first quarter results at the six active underwriters, as well as some recent industry news.

MGIC still No. 1 as volume up from last year

MGIC Investment and its Mortgage Guaranty Investment Corp. subsidiary was one of just two firms which wrote more business compared with the first quarter of 2024.

While it maintained its leading market share position for the third consecutive period, it also had the largest percentage drop-off in quarter-to-quarter NIW.

First quarter NIW of $10.2 billion compared with volume of $15.9 billion three months' prior and $9.1 billion for the same period in 2024.

"The company has previously noted that they feel their large customer base should allow them to capture a higher overall share of the market than peers, but also that they are more focused on the overall level of returns they can earn on their deployed capital than quarter-to-quarter market share shifts," George wrote in an MGIC research note.

But even with a quarter-to-quarter decline in volume, net income was higher with the comparative periods. It earned $185.5 million versus $184.7 million in the fourth quarter and $174.1 million one year ago.

When asked about the impact on MGIC of the current economic environment, CEO Tim Mattke said the company always looks at several possibilities.

"It's tough to know exactly what's specifically going to happen on tariffs…but I think when we think about our business and our pricing, we think about a wide range of different sort of scenarios and environments that we can perform under," Mattke said.

"We have to take that into account when we do pricing and that's consistent, no matter if it feels like it's a benign environment, if it's something that feels like it's changing more now."

Essent is the largest gainer in volume

Essent was the only other MI company to have increased volume from the first quarter 2024.

It produced $9.9 billion, compared with $12.2 billion in the fourth quarter and $8.3 billion in the first quarter of 2024.

Year-over-year Essent Group posted lower earnings, at $175.4 million, versus $181.7 million for the earlier period. In the fourth quarter, it posted net income of $167.9 million.

Meanwhile, Essent, one of two MIs which owns a title underwriter, had lower revenue from that business line, at $12.2 million in the first quarter. This was down from $16.6 million for the fourth quarter and $15.3 million for the first quarter in 2024.

When asked about the housing market and affordability, Mark Casale, Essent Group chairman and CEO said, "for Essent and for the other mortgage insurers, we're going to grow the way housing grows in this country and it's always grown.

"It doesn't always grow in a straight line," he continued. "That's why when we say longer term, we're constructive that we've been able to kind of wait this period out and continue to generate strong returns."

But Casale admitted he is not sure when this shift is going to happen.

Enact CEO says fundamentals remain solid

Enact Holdings had a strong start to 2025 and operating from a position of strength, company management said on the earnings call.

Net income was in the same range as with the comparable periods, at $166 million for the first quarter, versus $163 million three months prior and $161 million during the same period last year.

But NIW of $9.8 billion was down compared with $13.3 billion in the fourth quarter and $10.5 billion a year ago.

As for working in the current economic environment, things are different today as the MI business "has fundamentally transformed since the global financial crisis," which wiped out several of Enact's (then known as Genworth) competitors, President and CEO Rohit Gupta said on the earnings call.

"Specifically, in regards to Enact, our business fundamentals remain solid," Gupta said. "We are supported by our large diverse pool of insurance in-force, our commitment to underwriting and pricing discipline, embedded home price appreciation across our book, our prudent approach to reserves and a resilient investment portfolio."

Radian posts largest drop in YoY volume

Net income was lower at Radian Group, although close with the comparable quarters. It made $145 million in the first quarter, versus $148 million in the fourth quarter and $152 million for the first quarter of 2024.

But its drop-off in NIW was significant, to $9.5 billion from $13.2 billion and $11.5 billion for those prior periods.

Radian has an all-other reporting segment in its business which includes the title underwriter as well as a mortgage conduit, real estate services and real estate technology.

This line posted an adjusted pretax operating loss of $3.5 million, an improvement from the fourth quarter's loss of $6.4 million and a $7 million loss in the first quarter of 2024.

The credit performance of Radian's portfolio continues to be strong, said Rick Thornberry, CEO, on the earnings call.

"In April, our default inventory continued to decline with cures exceeding new defaults," Thornberry continued. "However, given the recent volatility in the financial markets resulting specifically from the uncertainties from tariff and global trade policies, we continue to closely monitor the impact on our business, including any changes to unemployment or other trends that may impact the credit environment."

NMI's volume down but net income rises

NMI Holdings, parent of National MI, unlike the competition, had a significant gain in net income. It made $102.6 million in the first quarter.

This compared with $86.2 million for the three months ended Dec. 31, 2024 and $89 million during the period ended March 31, 2024.

NIW of $9.2 billion for the latest quarter was lower than the $11.9 billion produced in the fourth quarter and $9.4 billion for the first quarter last year.

Like several of his colleagues at the other MIs, Brad Shuster, executive chairman, commented on Bill Pulte, the Federal Housing Finance Agency director and chairman of Fannie Mae and Freddie Mac.

"We have long noted that there is broad recognition of the unique and valuable role that the private mortgage insurance industry plays, working to consistently expand access to homeownership and all the benefits it provides, while also placing private capital in front of the GSEs and taxpayers to ensure the safety and soundness of the conventional mortgage market," Shuster said during the earnings call.

"National MI and the broader private mortgage insurance industry have never been stronger or better positioned to provide this critical support than we are today, and we're excited to work with Director Pulte and other members of the administration to advance their important housing goals.

International MI responsible for Arch's premium drop

Arch Capital Group's mortgage segment, which includes international and reinsurance line as well as U.S. primary business, had underwriting income of $252 million, down 7% year-over-year from $271 million.

Net premiums written in the segment were down 4%, to $266 million from $277 million.

"The decrease in net premiums written in the 2025 first quarter primarily reflected a lower level of mortgage originations, mostly in our international businesses," Arch's earnings release said.

NIW fell to $9.2 billion in the first quarter, down from $11.8 billion on a quarter-to-quarter and $9.3 billion year-over-year.

"Our near-term outlook for the mortgage industry is unlikely to change significantly, " Arch Capital CEO Nicolas Papadopoulo said on the earnings call. "While recessionary trends resulting from tariffs and other economic policy could create headwinds, we still expect the mortgage segment to continue generating attractive underwriting income given the high credit quality and embedded equity of our in-force portfolio."

MI rate aggregator acquired

PMI Rate Pro, which allows loan originators to comparison shop rates across all six primary MI firms, has been acquired by Loanpass, a product and pricing engine.

Terms of the deal were not disclosed.

"This integration brings speed, accuracy, and control to the forefront — allowing lenders to manage product pricing and PMI through one modern interface," said Bill Roy, Loanpass CEO in a press release.

PMI Rate Pro will retain its brand identity and continue operating independently for its lender clients and software integrations. For CEO Nomi Smith, the deal is the next natural step in the company's evolution.

"We built our PMI technology to be modern, flexible, and easy to integrate with LOS, PPE, and POS systems," Smith said. "Together, we're building the kind of connected infrastructure the mortgage industry has needed for years."