NMI Holdings (NMIH Quick QuoteNMIH - Free Report) reported third-quarter 2022 operating net income per share of 90 cents, which beat the Zacks Consensus Estimate by 9.8%. The bottom line increased 9.8% year over year.

The quarterly results reflected significant new business production and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Favorable credit performance and expense discipline led to record profitability and strong returns.

NMI Holdings Inc Price, Consensus and EPS Surprise

Operational Update

NMI Holdings’ total operating revenues of $130.6 million increased 5.3% year over year on higher net premiums earned (up 4%) and net investment income (up 21.5%). Revenues missed the Zacks Consensus Estimate by 2.5%.

Primary insurance-in-force increased 24.8% to $179.2 billion. Annual persistency was 80.1%, up 2200 basis points year over year.

New insurance written was $17.2 billion, down 27% year over year, reflecting a decline in refinancing origination volume year on year.

Underwriting and operating expenses totaled $27.1 million, down 21.9% year over year. Insurance claims reflected a benefit of $3.4 million against an expense of $3.2 million in the year-ago quarter.

The loss ratio was 2.9 versus 2.5 in the year-ago quarter.

The adjusted expense ratio of 22.9 improved 610 basis points year over year. Adjusted combined ratio of 20.1 improved 1170 basis points year over year.

Financial Update

Book value per share, a measure of net worth, was up about 3% year over year to $18.21 as of Sep 30, 2022.

NMI Holdings had $125.8 million in cash and cash equivalents, up 64.1% from 2021 end. The debt balance of $395.7 million increased 0.3% from 2021 end.

Annualized adjusted return on equity was 20.1%, up 350 basis points.

Total PMIERs available assets were $2.3 billion and net risk-based required assets totaled $1.2 billion at third-quarter 2022 end.

Zacks Rank

NMI Holdings currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies(TRV Quick QuoteTRV - Free Report)   and RLI Corporation(RLI Quick QuoteRLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR Quick QuotePGR - Free Report) missed the mark.

Travelers’ third-quarter 2022 core income of $2.20 per share beat the Zacks Consensus Estimate by 24.3% but decreased 15.4% year over year.  Total revenues increased 6.8% from the year-ago quarter to $9.4 billion and beat the Zacks Consensus Estimate by 2.5%.

Net written premiums increased 110% year over year to $9.2 billion. Underwriting gain of $115 million increased 53.3% year over year in the reported quarter.  The combined ratio improved 40 bps year over year to 98.2.

RLI’s third-quarter 2022 operating earnings of 50 cents per share beat the Zacks Consensus Estimate by 51.5% but declined 23.1% from the prior-year quarter. Operatingrevenues of $312.7 million were up 15.3% year over year but missed the Zacks Consensus Estimate by 1.3%.

Gross premiums written increased 13.3% year over year to $403.8 million. Underwriting income of $8.8 million decreased 35.8% while the combined ratio deteriorated 240 bps year over year to 97.

Progressive’s earnings per share of 49 cents missed the Zacks Consensus Estimate of $1.24 as well as our estimate of $1.38. The bottom line, however, improved more than threefold from 14 cents earned in the year-ago quarter.

Net premiums written were $13 billion in the quarter, up 5% from $11.7 billion a year ago but missed our estimate of $14.2 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 120 bps from the prior-year quarter’s level to 99.2.