Firm continues to execute its growth strategy
Enact Holdings, formerly known as Genworth Mortgage, unveiled its third-quarter earnings report on Tuesday.
For the private mortgage insurance company, Q3 2022 has been a mixed bag, with group CEO Rohit Gupta describing the results as "strong despite the dynamic environment." Its net income was $191 million in the third quarter, down from $205 million in the fourth quarter and up from $137 million in the same period in 2021.
Enact said the sequential decline was due to favorable reserve development in Q2, while the year-over-year improvement in net income was primarily driven by lower losses from favorable reserve development.
"Throughout the quarter, we continued to execute against all aspects of our cycle-tested growth strategy, writing profitable new business, investing in our growth, and managing our risk, while also delivering on our commitment to return excess capital to shareholders," Gupta said.
The company's net premium earned dipped 1% quarter over quarter and 3% year over year to $235 million in Q3. New insurance written was $15 billion, down 14% from $17 billion in Q2 and 37% from $24 billion in Q3 2021. Primary insurance-in-force increased by 2% to $242 billion, and persistency rose to 82% – fuelled by rising mortgage rates and an ongoing decline in the percentage of Enact's in-force policies.
Read next: "Mortgage brokers were blamed for a crisis they did not create"
"While several factors are creating uncertainty in the housing market in the near term, we believe the longer-term drivers of demand remain in place, and the strength of our portfolio, balance sheet, and cash flows position us well to prudently navigate the current market environment while continuing to successfully pursue our long-term growth strategy, and drive value creation for all stakeholders," said Gupta.
