Triad Guaranty Inc., the Winston-Salem, N.C.-based mortgage insurer that was the first to go into run-off, lost $31.3 million for the second quarter, compared with a loss of $4.4 million in the same period last year.
The loss means the company’s deficit-in-assets, the difference between policyholder obligations (both current and future) and the ability to pay them, is now $771 million, up $33 million from the first quarter. President and chief executive Ken Jones repeated his past warnings that it is unlikely Triad would be able meet all of its obligations by the time the portfolio runs off.
Among the issues affecting the timing of the run-off is that Triad’s persistency remains high. For the most recent quarter, it was over 83% and that is actually almost two percentage points higher for 2Q11.
Jones did note that primary risk in default fell by 8.2% in 2Q12, compared with 6.9% one year prior. However, net losses and loss adjustment expenses were $68.2 million; one year prior they were $41.3 million, but Triad had reported a positive impact to its results from reserve adjustments during that time frame.
