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NMI Holdings (NMIH - Free Report) reported fourth-quarter 2022 operating net income per share of 86 cents, which was in line with Zacks Consensus Estimate. The bottom line increased 17.8% year over year.
The quarterly results reflected increased strength in operating performance and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Significant new insurance written volume and expense discipline led to record profitability and strong returns on equity.
NMI Holdings Inc Price, Consensus and EPS Surprise
NMI Holdings’ total operating revenues of $133.1 million increased 6.4% year over year on higher net premiums earned (up 5%) and net investment income (up 32.8%). The top line missed the Zacks Consensus Estimate by 3.8%.
Primary insurance in force increased 20.8% to $184 billion. Annual persistency was 83.5%, up 1970 basis points (bps) year over year.
New insurance written was $10.7 billion, down 42% year over year, reflecting a decline in refinancing origination volume year over year.
Underwriting and operating expenses totaled $26.7 million, down 31.2% year over year. Insurance claims and claim expenses were $3.4 million against a benefit of $0.5 million in the year-ago quarter.
The loss ratio was 2.9 versus (0.4) in the year-ago quarter, reflecting higher insurance claims and expenses.
The adjusted expense ratio of 22.3 improved 820 bps year over year due to lower underwriting and operating expenses than the year-ago quarter. The adjusted combined ratio of 25.2 improved 490 bps year over year.
Full-Year Highlights
Total operating revenues for the year 2022 were $523.3 million, compared with $485.1 million at 2021-end.
Adjusted earnings for 2022 were $3.39 per share compared with $2.73 per share at 2021-end.
Net premiums earned rose 7% from 2021-end figures.
Adjusted combined ratio was 23.9% down 910 bps from 2021-end.
Financial Update
Book value per share, a measure of net worth, was up about 5.8% year over year to $19.31 as of Dec 31, 2022.
NMI Holdings had $44.4 million in cash and cash equivalents, down 42% from 2021-end. The debt balance of $396.1 million increased 0.3% from 2021-end.
Annualized adjusted return on equity in 2022 was 18.6%, up 220 bps.
Total PMIERs available assets were $2.4 billion and net risk-based required assets totaled $1.2 billion at the fourth-quarter end.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #3 (Hold).
Of the insurance industry players that have reported fourth-quarter results so far, RLI Corporation (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Travelers Companies' (TRV - Free Report) earnings were in line with Zacks Consensus Estimate.
RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter of RLI were $329.5 million, up 19.4% year over year, driven by 16.7% higher net premiums earned and 59% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.4%.
Progressive's fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49. The bottom line improved 42.9% year over year. Net premiums written of PGR were $12.5 billion in the quarter, up 16% from $10.7 billion a year ago. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
Travelers Companies reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
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NMI Holdings (NMIH) Q4 Earnings Meet Estimates, Increase Y/Y
NMI Holdings (NMIH - Free Report) reported fourth-quarter 2022 operating net income per share of 86 cents, which was in line with Zacks Consensus Estimate. The bottom line increased 17.8% year over year.
The quarterly results reflected increased strength in operating performance and increasing persistency, which drove growth in the company’s high-quality insured portfolio. Significant new insurance written volume and expense discipline led to record profitability and strong returns on equity.
NMI Holdings Inc Price, Consensus and EPS Surprise
NMI Holdings Inc price-consensus-eps-surprise-chart | NMI Holdings Inc Quote
Operational Update
NMI Holdings’ total operating revenues of $133.1 million increased 6.4% year over year on higher net premiums earned (up 5%) and net investment income (up 32.8%). The top line missed the Zacks Consensus Estimate by 3.8%.
Primary insurance in force increased 20.8% to $184 billion. Annual persistency was 83.5%, up 1970 basis points (bps) year over year.
New insurance written was $10.7 billion, down 42% year over year, reflecting a decline in refinancing origination volume year over year.
Underwriting and operating expenses totaled $26.7 million, down 31.2% year over year. Insurance claims and claim expenses were $3.4 million against a benefit of $0.5 million in the year-ago quarter.
The loss ratio was 2.9 versus (0.4) in the year-ago quarter, reflecting higher insurance claims and expenses.
The adjusted expense ratio of 22.3 improved 820 bps year over year due to lower underwriting and operating expenses than the year-ago quarter. The adjusted combined ratio of 25.2 improved 490 bps year over year.
Full-Year Highlights
Total operating revenues for the year 2022 were $523.3 million, compared with $485.1 million at 2021-end.
Adjusted earnings for 2022 were $3.39 per share compared with $2.73 per share at 2021-end.
Net premiums earned rose 7% from 2021-end figures.
Adjusted combined ratio was 23.9% down 910 bps from 2021-end.
Financial Update
Book value per share, a measure of net worth, was up about 5.8% year over year to $19.31 as of Dec 31, 2022.
NMI Holdings had $44.4 million in cash and cash equivalents, down 42% from 2021-end. The debt balance of $396.1 million increased 0.3% from 2021-end.
Annualized adjusted return on equity in 2022 was 18.6%, up 220 bps.
Total PMIERs available assets were $2.4 billion and net risk-based required assets totaled $1.2 billion at the fourth-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 Insurers
Of the insurance industry players that have reported fourth-quarter results so far, RLI Corporation (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Travelers Companies' (TRV - Free Report) earnings were in line with Zacks Consensus Estimate.
RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter of RLI were $329.5 million, up 19.4% year over year, driven by 16.7% higher net premiums earned and 59% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.4%.
Progressive's fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49. The bottom line improved 42.9% year over year. Net premiums written of PGR were $12.5 billion in the quarter, up 16% from $10.7 billion a year ago. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
Travelers Companies reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.