Arch Capital Group's mortgage insurance subsidiary slipped to No. 2 in market share just five quarters after completing the acquisition of former No. 1 United Guaranty Corp.
It wasn't unexpected that Arch MI would lose market share, but among the five private mortgage insurers that have reported so far, it is the only one that had lower new insurance written compared to the first quarter last year.
Arch MI had $11.4 billion of NIW in the first quarter, down from $14.4 billion in the fourth quarter and $12.7 billion in last year's first quarter. The company attributed the year-over-year decline to the slowdown in mortgage originations and a decline in single premium and other business with higher risk attributes.
Radian Group had NIW of $11.7 billion, up from $10.1 billion in the first quarter last year. It is now the leading MI in terms of NIW after being edged out by Arch in the fourth quarter. MGIC Investment Corp. had NIW of $10.8 billion, up from $9.3 billion one year ago.
Monthly premium policies contributed 91.4% of Arch's NIW in the quarter, compared to 81.9% a year ago. Insurance-in-force ended the quarter at $349.9 billion, compared with $325.2 billion one year prior.
The mortgage segment at Arch Capital Group had underwriting income of $174.9 million, up from $149.9 million for the first quarter of 2017. This included both its primary and reinsurance MI lines and government-sponsored enterprise credit risk sharing transactions.
NMI Holdings Inc., the parent of National MI, saw its year-over-year net income increase over 300% to $22.4 million from $5.5 million in the first quarter of 2017. The company took a loss of $1.8 million in the fourth quarter because it needed to adjust the value of its deferred tax asset.
Its NIW was $6.5 billion for the quarter, down from $6.9 billion in the fourth quarter but up from $3.6 billion in the first quarter last year.
Insurance-in-force grew to $53.4 billion, up from $48.5 billion as of Dec. 31 and $34.8 billion on March 31, 2017.
"We also continued to make significant strides in customer development, activating 21 new customers in the first quarter and continuing to increase our volume with existing customers," said Chairman and CEO Bradley Shuster in a press release.
Genworth Financial's U.S. mortgage insurance business had adjusted operating income of $111 million in the first quarter, compared $74 million in the fourth quarter last year and $73 million in the first quarter of 2017.
Its first-quarter loss ratio was 9%, down 13 percentage points from the fourth quarter and down eight percentage points from the prior year. This was a result of lower new delinquencies, seasonally higher cures and favorable aging. Results in the quarter also benefited from a lower corporate tax rate.
There were no material incremental incurred losses from areas impacted by hurricanes in the quarter, although the company had reserved approximately $5 million pretax for these losses in the fourth quarter.
Its new insurance written was $9 billion, down from $10.2 billion in the fourth quarter, but up from $7.6 billion in the first quarter last year.
Regarding the parent company's acquisition by China Oceanwide, on April 24 both companies withdrew and refiled their joint voluntary notice with the Committee on Foreign Investment in the U.S.
CFIUS agreed to a one-day review period and then start a 45-day investigation period.