ESNT Q2 Earnings & Revenues Top Estimates on Strong Reinsurance Growth

Behind the Headlines

Revenues were $362.7 million, up 13.6% year over year. The top line exceeded the Zacks Consensus Estimate by 10.5%.

Net premiums earned rose 11.2% year over year to $276.8 million.

Net investment income increased 3.9% year over year to $61.6 million. Income from other invested assets jumped to $19.4 million from $4.5 million a year ago.

Mortgage insurance in force (IIF) was $249.7 billion, up 1.2%. New insurance written (NIW) was $14.1 billion, up 12.8% year over year.

Segment Performance and Mix Shift

Mortgage Insurance: Net premiums earned were $215.7 million, down 2.1% year over year. The MI loss ratio deteriorated to 13.6% from 7% a year ago, while the expense ratio improved to 14.8% from 15.3%. The MI combined ratio deteriorated to 28.4% from 22.3%. Pretax income totaled $212.6 million, down 3.4% year over year.

Reinsurance: Net premiums earned rose to $43.6 million, soared 214.5% year over year, reflecting continued expansion of the reinsurance business. The Reinsurance combined ratio deteriorated to 77.9% from 19.4%, driven by higher loss provisions and acquisition costs. Segment pretax income totaled $17.1 million compared with $18.3 million a year ago.

Credit performance and portfolio dynamics

MI IIF increased to $249.7 billion with NIW of $14.1 billion. Annual persistency was 84%, compared with 85.8% a year ago. The default rate increased to 2.53% from 2.12% a year ago, while the number of loans in default rose to 20,278 from 17,255.

The provision for losses and LAE increased to $48.9 million from $17 million. Within Mortgage Insurance, the provision increased to $29.3 million from $15.3 million, while Reinsurance losses increased to $18.7 million from $0.36 million a year ago. 

Operating expenses and seasonality

Other underwriting and operating expenses were $75.3 million, up 19.9% year over year. The increase reflected higher compensation and benefits, acquisition costs and other underwriting and operating expenses.

ESNT's Capital, Liquidity & Risk Transfer

As of June 30, 2026, book value per share rose to $63.01 from $56.98 a year ago. Cash and investments available for sale at the holding companies totaled $1.1 billion. Debt-to-capital was 8.1%, with $500 million of outstanding borrowings and $500 million of undrawn committed capacity.

Capital return: The company’s board declared a 35 cents per share quarterly dividend, payable on Sept. 10, 2026. Through July 31, Essent repurchased 5.8 million common shares for $348 million.

Essent Guaranty can pay up to $330 million of ordinary dividends in 2026.

Zacks Rank

ESNT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industry Players

Selective Insurance Group, Inc. SIGI reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%.

Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines and a 2% decline in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.

NMI Holdings, Inc. NMIH reported second-quarter 2026 adjusted earnings of $1.38 per share, which rose 13.1% year over year. The bottom line beat the Zacks Consensus Estimate of $1.28 by 7.81%.

Revenues rose 8.1% year over year to $188 million and surpassed the consensus mark of $185 million by 1.73%. Primary insurance in force increased 5.8% to $227.1 billion. Net premiums earned increased 5.7% year over year to $157.5 million, reflecting continued expansion in the insured portfolio. Our estimate was $157 million. Net investment income climbed 21.6% to $30.3 million, providing another meaningful lift to the top line. Our estimate was $27 million.

Mercury General Corporation (MCY) reported second-quarter 2026 operating income of $3.52 per share, which surged 31.8% year over year and beat the Zacks Consensus Estimate of $1.80 by 95.6%. Revenues of $1.67 billion surpassed the consensus mark by 5.8%.

Net premiums earned increased 9.6% year over year to $1.5 billion. Net premiums written rose 5.3% to $1.56 billion, while direct premiums written advanced 9.3% to $1.62 billion. Net investment income before taxes increased 14% year over year to $89.8 million. After-tax investment income rose 16.1% to $76.6 million.

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This article originally published on Zacks Investment Research (zacks.com).

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