The following is a summary of the Essent Group Ltd. (ESNT) Q1 2024 Earnings Call Transcript:
Financial Performance:
Essent Group reported a net income of $182 million for Q1 2024, an increase from $171 million in the previous year.
Diluted earnings per share stood at $1.70, compared to $1.59 a year ago.
A 3% year-on-year increase was noted in U.S. mortgage insurance in force, standing at $238 billion.
There was a reported return on average equity of 14%.
Q1 saw an increase in the annualized investment yield at 3.7%, up from 3.4% a year ago, with cash and investments totalling $5.8 billion.
Total cash dividends paid to shareholders amounted to $29.6 million, along with the repurchase of 97,000 shares.
Business Progress:
Essent Group sees potential growth in the housing market due to positive supply-demand dynamics and favorable demographics.
Notable progress was made in Q1 2024 with the entry into a quota share transaction with highly-rated reinsurers.
The focus remains on activating new lenders and enhancing their proprietary scoring engine, EssentEDGE, which has shown success in winning loans.
The integration and build-out of Essent Title after its acquisition was completed.
An increase was observed in Essent Re's third-party risk, up to $2.3 billion, a 10% increase from Q1 2023.
Management sees potential Mergers & Acquisitions within and beyond the industry.
The company remains bullish about its resilience amid potential economic downturns.
EssentEDGE solution aims to leverage borrower credit data, predicting a New Insurance Written market of around 2.50 to 2.75 for the year.
Cure rates for their loan vintages have improved, indicating better loan recoveries.
More details: Essent IR
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