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NMI Holdings (NMIH) Q3 Earnings and Revenues Top Estimates

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NMI Holdings (NMIH - Free Report) reported third-quarter 2020 operating net income per share of 47 cents, which beat the Zacks Consensus Estimate by 27%. The bottom line declined 33.8% year over year.

The third-quarter performance was aided by strength of the purchase mortgage market and the refinance market resulting in new business opportunity. This helped the mortgage insurer deliver record new insurance written.

However, the impact of additional claims and claims expenses incurred on higher default experience in connection with the COVID-19 pandemic limited the upside.

NMI Holdings Inc Price, Consensus and EPS Surprise

NMI Holdings Inc Price, Consensus and EPS Surprise

NMI Holdings Inc price-consensus-eps-surprise-chart | NMI Holdings Inc Quote

Operational Update

NMI Holdings recorded total operating revenues of $108 million, which increased 5.9% year over year on higher net premiums earned (up 7%) and net investment income (up 5.8%). Revenues beat the Zacks Consensus Estimate by 0.3%.

Primary insurance-in-force increased 16% to $104.5 billion.

New insurance written was $18.5 billion, up 31% year over year.

Net underwriting and operating expenses totaled $34 million, down 5% year over year. Insurance claims and claim expenses were $15.7 million, marking about six-fold increase and reflecting higher default experience attributable to the COVID-19 pandemic.

Loss ratio was 15.9%, which deteriorated 1310 basis points year over year.

Financial Update

Book value per share, a measure of net worth, grew 20% to $15.42 as of Sep 30, 2020 from the year-ago quarter end.

NMI Holdings had $1.9 billion in cash and investments, up 68% year over year.

Annualized adjusted return on equity was 12.6%

Total PMIERs available assets were $1.7 billion and net risk-based required assets totaled $991 million at 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 P&C Insurers

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

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