NMI Holdings, Inc. (NMIH - Free Report) reported first-quarter 2023 operating net income per share of 88 cents, beating the Zacks Consensus Estimate by 2.3% and our estimate of operating net income of 85 cents. The bottom line increased 14.3% year over year.
NMI Holdings’ total operating revenues of $136.8 million increased 7.3% year over year on higher net premiums earned (up 4.5%) and net investment income (up 46%). The top line beat the Zacks Consensus Estimate by 0.8% and our estimate of $135.2 million.
The quarterly results reflected increased strength in operating performance and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Improving net premiums earned and expense discipline led to record profitability and strong returns on equity.
Operational Update
Primary insurance in force increased 18% to $186.7 billion. Annual persistency was 85.1%, up 1360 basis points (bps) year over year.
New insurance written was $8.7 billion, down 38.3% year over year, reflecting a decline in refinancing origination volume year over year.
Underwriting and operating expenses totaled $25.8 million, down 22% year over year. Insurance claims and claim expenses were $6.7 million against a benefit of $0.6 million in the year-ago quarter.
The loss ratio was 5.5 versus (0.5) in the year-ago quarter, reflecting higher insurance claims and expenses.
The adjusted expense ratioof 21.2 improved 680 bps year over year due to lower underwriting and operating expenses than the year-ago quarter. The adjusted combined ratio of 26.7 improved 80 bps year over year.
Financial Update
Book value per share, a measure of net worth, was up about 14.9% year over year to $20.49 as of Mar 31, 2023.
NMI Holdings had $83.1 million in cash and cash equivalents, down from $44.4 million at 2022-end. The debt balance of $396.4 million increased from $396.1 million at 2022-end.
Annualized return on equity for the quarter was 17.9%, up 40 bps.
Total PMIERs available assets were $2.5 billion and net risk-based required assets totaled $1.2 billion at the first-quarter end.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Travelers Companies, Inc. (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of core income of $3.41.
However, the bottom line decreased 2.6% year over year. The year-over-year decline reflects higher catastrophe losses and lower net favorable prior-year reserve developments. However, a higher underlying underwriting gain and higher net investment income partially offset the same.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share (EPS) of 65 cents missed the Zacks Consensus Estimate of $1.44 and our estimate of EPS of $1.50. The bottom line declined 20.7% year over year.
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of net premiums of $14.6 billion.Net premiums earned grew 15% to $13.5 billion, beating our estimate of $12.6 billion.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2023 operating income of $1 per share missed the Zacks Consensus Estimate by about 16%. The bottom line declined 9.1% year over year and missed our estimate of operating income of $1.19.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth fueling continued strong underwriting performance, and a surge in investment income.
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NMI Holdings, Inc. (NMIH - Free Report) reported first-quarter 2023 operating net income per share of 88 cents, beating the Zacks Consensus Estimate by 2.3% and our estimate of operating net income of 85 cents. The bottom line increased 14.3% year over year.
NMI Holdings’ total operating revenues of $136.8 million increased 7.3% year over year on higher net premiums earned (up 4.5%) and net investment income (up 46%). The top line beat the Zacks Consensus Estimate by 0.8% and our estimate of $135.2 million.
The quarterly results reflected increased strength in operating performance and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Improving net premiums earned and expense discipline led to record profitability and strong returns on equity.
Operational Update
Primary insurance in force increased 18% to $186.7 billion. Annual persistency was 85.1%, up 1360 basis points (bps) year over year.
New insurance written was $8.7 billion, down 38.3% year over year, reflecting a decline in refinancing origination volume year over year.
Underwriting and operating expenses totaled $25.8 million, down 22% year over year. Insurance claims and claim expenses were $6.7 million against a benefit of $0.6 million in the year-ago quarter.
The loss ratio was 5.5 versus (0.5) in the year-ago quarter, reflecting higher insurance claims and expenses.
The adjusted expense ratioof 21.2 improved 680 bps year over year due to lower underwriting and operating expenses than the year-ago quarter. The adjusted combined ratio of 26.7 improved 80 bps year over year.
Financial Update
Book value per share, a measure of net worth, was up about 14.9% year over year to $20.49 as of Mar 31, 2023.
NMI Holdings had $83.1 million in cash and cash equivalents, down from $44.4 million at 2022-end. The debt balance of $396.4 million increased from $396.1 million at 2022-end.
Annualized return on equity for the quarter was 17.9%, up 40 bps.
Total PMIERs available assets were $2.5 billion and net risk-based required assets totaled $1.2 billion at the first-quarter end.
Zacks Rank
NMI Holdings 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 Property and Casualty Insurers
The Travelers Companies, Inc. (TRV - Free Report) reported first-quarter 2023 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of core income of $3.41.
However, the bottom line decreased 2.6% year over year. The year-over-year decline reflects higher catastrophe losses and lower net favorable prior-year reserve developments. However, a higher underlying underwriting gain and higher net investment income partially offset the same.
The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share (EPS) of 65 cents missed the Zacks Consensus Estimate of $1.44 and our estimate of EPS of $1.50. The bottom line declined 20.7% year over year.
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of net premiums of $14.6 billion.Net premiums earned grew 15% to $13.5 billion, beating our estimate of $12.6 billion.
W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2023 operating income of $1 per share missed the Zacks Consensus Estimate by about 16%. The bottom line declined 9.1% year over year and missed our estimate of operating income of $1.19.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth fueling continued strong underwriting performance, and a surge in investment income.
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