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Radian Group Inc. (RDN - Free Report) reported second-quarter 2022 adjusted operating income of $1.36 per share, which beat the Zacks Consensus Estimate by 51.1%. The bottom line increased 81.3% year over year.
The results reflected higher monthly premium policy insurance in force, a decline in single premium policy insurance in force and higher investment income.
Radian Group Inc. Price, Consensus and EPS Surprise
Operating revenues increased 2.3% year over year to $328.7 million on higher net investment income.
Net premiums earned were $253.9 million, down 0.3% year over year. Net investment income increased 29.4% year over year to $46.9 million. MI New Insurance Written decreased 12.6% year over year to $18.9 billion.
Primary mortgage insurance in force was $254.2 billion as of Jun 30, 2022, up 7.1% year over year. The year-over-year change reflects a 12.6% increase in monthly premium policy insurance in force and a 15.1% decline in single premium policy insurance in force.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 71.7 % as of Jun 30, 2022, up 1400 basis points (bps) year over year.
Primary delinquent loans were 21,861 as of Jun 30, 2022, compared with 40,464 in the year-ago quarter.
Total expenses decreased 80.9% year over year to $26.9 million on account of lower provision for losses, cost of services, interest expense and amortization of other acquired intangible assets. The expense ratio was 26.2, down 80 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year increase of 1.9% in total revenues to $289.8 million. Net premiums earned by the segment were $246.9 million, down 0.07% year over year. Claims paid were $3.3 million, down 22.7% year over year. The loss ratio was (46.2) against 1.3 in the year-ago quarter.
The homegenius segment’s revenues of $32.3 million decreased 3.6% year over year. Adjusted pre-tax operating loss was $17.7 million, wider than the prior-year quarter’s loss of $9.2 million.
Financial Update
As of Jun 30, 2022, Radian Group had a solid cash balance of $135.3 million, down 10.5% from the 2021-end level. The debt-to-capital ratio deteriorated 190 bps to 26.4 from the 2021-end level.
Book value per share, a measure of net worth, climbed 2.6% year over year to $23.63 as of Jun 30, 2022. Adjusted net operating return on equity was 23.6%, compared with 13.6% in the year-ago quarter.
The risk-to-capital ratio of Radian Guaranty as of second-quarter end was 11.9:1, higher than 11.1:1 from the 2021-end level. Excess available resources to support PMIERs of $1.4 billion were 38% higher than Radian Guaranty's minimum required assets.
Share Repurchase and Dividend Update
Radian bought back 9.1 million shares worth $183.8 million in the second quarter of 2022. In July 2022, Radian purchased an additional 4.8 million shares for $97.5 million and is left with $97.6 million available under the existing program.
On May 11, 2022, Radian Group’s board of directors authorized a regular quarterly dividend of 20 cents per share and the dividend was paid on Jun 3, 2022.
Of the insurance industry players that have reported second-quarter results so far, The Hartford Financial Services Group, Inc. (HIG - Free Report) , Willis Towers Watson Public Limited Company (WTW - Free Report) and Chubb Limited (CB - Free Report) beat the respective Zacks Consensus Estimate for earnings.
The Hartford Financial Services Group reported second-quarter 2022 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 41.5%. The bottom line, however, decreased 8% year over year.
Hartford Financial’s operating revenues amounted to $3,765 million, which improved from $3,568 million in the second quarter of 2022. Also, the top line beat the consensus mark by 1.5%. Total earned premium of $4,810 million beat the consensus mark of $4,776.3 million and increased from $4,460 million a year ago. Net investment income of $541 million declined from $581 million a year ago due to lower annualized return on alternative investments. The reported figure was below the Zacks Consensus Estimate of $564.5 million.
Willis Towers Watson delivered second-quarter 2022 adjusted earnings of $2.32 per share, which beat the Zacks Consensus Estimate by 0.4%. The bottom line improved 9% year over year.
Willis Towers Watson posted adjusted consolidated revenues of $2.03 billion, down 3% year over year on a reported basis. Revenues increased 3% on an organic basis. The top line however missed the Zacks Consensus Estimate by 2.3%. Adjusted operating income was $314 million, down 1% year over year. Margin expanded 30 bps to 15.5%.
Chubb reported second-quarter 2022 core operating income of $2.40 per share, which outpaced the Zacks Consensus Estimate by about 17%. The bottom line also improved 16% from the year-ago quarter. Net premiums written improved 7.9% year over year to $10.3 billion in the quarter. Net premiums earned rose 8.4% to $9.6 billion. Adjusted net investment income was a record $950 million, up 0.5%.
Property and casualty underwriting income was a record $1.4 billion, up 21.1% from the year-ago quarter. Chubb incurred an after-tax catastrophe loss of $241 million, 6.6% wider year over year. The combined ratio improved 150 bps on a year-over-year basis to a record 84% in the quarter under review.
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Radian Group's (RDN) Q2 Earnings Beat Estimates, Increase Y/Y
Radian Group Inc. (RDN - Free Report) reported second-quarter 2022 adjusted operating income of $1.36 per share, which beat the Zacks Consensus Estimate by 51.1%. The bottom line increased 81.3% year over year.
The results reflected higher monthly premium policy insurance in force, a decline in single premium policy insurance in force and higher investment income.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. price-consensus-eps-surprise-chart | Radian Group Inc. Quote
Quarter in Details
Operating revenues increased 2.3% year over year to $328.7 million on higher net investment income.
Net premiums earned were $253.9 million, down 0.3% year over year. Net investment income increased 29.4% year over year to $46.9 million. MI New Insurance Written decreased 12.6% year over year to $18.9 billion.
Primary mortgage insurance in force was $254.2 billion as of Jun 30, 2022, up 7.1% year over year. The year-over-year change reflects a 12.6% increase in monthly premium policy insurance in force and a 15.1% decline in single premium policy insurance in force.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 71.7 % as of Jun 30, 2022, up 1400 basis points (bps) year over year.
Primary delinquent loans were 21,861 as of Jun 30, 2022, compared with 40,464 in the year-ago quarter.
Total expenses decreased 80.9% year over year to $26.9 million on account of lower provision for losses, cost of services, interest expense and amortization of other acquired intangible assets. The expense ratio was 26.2, down 80 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year increase of 1.9% in total revenues to $289.8 million. Net premiums earned by the segment were $246.9 million, down 0.07% year over year. Claims paid were $3.3 million, down 22.7% year over year. The loss ratio was (46.2) against 1.3 in the year-ago quarter.
The homegenius segment’s revenues of $32.3 million decreased 3.6% year over year. Adjusted pre-tax operating loss was $17.7 million, wider than the prior-year quarter’s loss of $9.2 million.
Financial Update
As of Jun 30, 2022, Radian Group had a solid cash balance of $135.3 million, down 10.5% from the 2021-end level. The debt-to-capital ratio deteriorated 190 bps to 26.4 from the 2021-end level.
Book value per share, a measure of net worth, climbed 2.6% year over year to $23.63 as of Jun 30, 2022. Adjusted net operating return on equity was 23.6%, compared with 13.6% in the year-ago quarter.
The risk-to-capital ratio of Radian Guaranty as of second-quarter end was 11.9:1, higher than 11.1:1 from the 2021-end level. Excess available resources to support PMIERs of $1.4 billion were 38% higher than Radian Guaranty's minimum required assets.
Share Repurchase and Dividend Update
Radian bought back 9.1 million shares worth $183.8 million in the second quarter of 2022. In July 2022, Radian purchased an additional 4.8 million shares for $97.5 million and is left with $97.6 million available under the existing program.
On May 11, 2022, Radian Group’s board of directors authorized a regular quarterly dividend of 20 cents per share and the dividend was paid on Jun 3, 2022.
Zacks Rank
Radian currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Insurers
Of the insurance industry players that have reported second-quarter results so far, The Hartford Financial Services Group, Inc. (HIG - Free Report) , Willis Towers Watson Public Limited Company (WTW - Free Report) and Chubb Limited (CB - Free Report) beat the respective Zacks Consensus Estimate for earnings.
The Hartford Financial Services Group reported second-quarter 2022 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 41.5%. The bottom line, however, decreased 8% year over year.
Hartford Financial’s operating revenues amounted to $3,765 million, which improved from $3,568 million in the second quarter of 2022. Also, the top line beat the consensus mark by 1.5%. Total earned premium of $4,810 million beat the consensus mark of $4,776.3 million and increased from $4,460 million a year ago. Net investment income of $541 million declined from $581 million a year ago due to lower annualized return on alternative investments. The reported figure was below the Zacks Consensus Estimate of $564.5 million.
Willis Towers Watson delivered second-quarter 2022 adjusted earnings of $2.32 per share, which beat the Zacks Consensus Estimate by 0.4%. The bottom line improved 9% year over year.
Willis Towers Watson posted adjusted consolidated revenues of $2.03 billion, down 3% year over year on a reported basis. Revenues increased 3% on an organic basis. The top line however missed the Zacks Consensus Estimate by 2.3%. Adjusted operating income was $314 million, down 1% year over year. Margin expanded 30 bps to 15.5%.
Chubb reported second-quarter 2022 core operating income of $2.40 per share, which outpaced the Zacks Consensus Estimate by about 17%. The bottom line also improved 16% from the year-ago quarter. Net premiums written improved 7.9% year over year to $10.3 billion in the quarter. Net premiums earned rose 8.4% to $9.6 billion. Adjusted net investment income was a record $950 million, up 0.5%.
Property and casualty underwriting income was a record $1.4 billion, up 21.1% from the year-ago quarter. Chubb incurred an after-tax catastrophe loss of $241 million, 6.6% wider year over year. The combined ratio improved 150 bps on a year-over-year basis to a record 84% in the quarter under review.