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NMI Holdings (NMIH) Q3 Earnings Top, Insurance in Force Rises
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NMI Holdings (NMIH - Free Report) reported third-quarter 2023 operating net income per share of $1.00, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased 11.1% year over year.
The quarterly results reflected higher premiums and net investment income, and increased persistency, which drove growth in the company’s high-quality insured portfolio.
Operational Update
NMI Holdings’ total operating revenues of $148 million increased 13% year over year on higher net premiums earned (up 10%) and net investment income (up 49.5%). Revenues beat the Zacks Consensus Estimate by 1.2%.
Primary insurance in force increased 8.7% to $164.8 billion. Annual persistency was 86.2%, up 610 basis points (bps) year over year.
New insurance written was $11.3 billion, down 34% year over year.
Underwriting and operating expenses totaled $27.74 million, up 2% year over year. Insurance claims and claim expenses were $4.8 million compared with a benefit of $3.4 million in the year-ago quarter.
The loss ratio was 3.7 against (2.9) in the year-ago quarter.
The adjusted expense ratio of 21.3 improved 160 bps year over year, while the adjusted combined ratio of 25 deteriorated 480 bps year over year.
Financial Update
Book value per share, a measure of net worth, was up 20.5% year over year to $21.94 as of Sep 30, 2023.
NMI Holdings had $176.5 million in cash and cash equivalents, up nearly fourfold from the 2022 end. The debt balance of $397.2 million increased 0.3% from the 2022 end.
Annualized adjusted return on equity was 19%, which contracted 110 bps year over year.
Total PMIERs available assets were $2.6 billion and net risk-based required assets totaled $1.4 billion at third-quarter 2023 end.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #4 (Sell).
The Travelers Companies (TRV - Free Report) reported third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.
Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio, which improved by 90.6%.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.
Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.
RLI Corp. (RLI - Free Report) reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter. Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.
Gross premiums written increased 11.3% year over year to $449.3 million. Underwriting income of $4.2 million decreased 52.3%, primarily due to Hawaiian wildfire losses. The combined ratio deteriorated 170 basis points year over year to 98.7. Our estimate was 90.8.
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NMI Holdings (NMIH) Q3 Earnings Top, Insurance in Force Rises
NMI Holdings (NMIH - Free Report) reported third-quarter 2023 operating net income per share of $1.00, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased 11.1% year over year.
The quarterly results reflected higher premiums and net investment income, and increased persistency, which drove growth in the company’s high-quality insured portfolio.
Operational Update
NMI Holdings’ total operating revenues of $148 million increased 13% year over year on higher net premiums earned (up 10%) and net investment income (up 49.5%). Revenues beat the Zacks Consensus Estimate by 1.2%.
Primary insurance in force increased 8.7% to $164.8 billion. Annual persistency was 86.2%, up 610 basis points (bps) year over year.
New insurance written was $11.3 billion, down 34% year over year.
Underwriting and operating expenses totaled $27.74 million, up 2% year over year. Insurance claims and claim expenses were $4.8 million compared with a benefit of $3.4 million in the year-ago quarter.
The loss ratio was 3.7 against (2.9) in the year-ago quarter.
The adjusted expense ratio of 21.3 improved 160 bps year over year, while the adjusted combined ratio of 25 deteriorated 480 bps year over year.
Financial Update
Book value per share, a measure of net worth, was up 20.5% year over year to $21.94 as of Sep 30, 2023.
NMI Holdings had $176.5 million in cash and cash equivalents, up nearly fourfold from the 2022 end. The debt balance of $397.2 million increased 0.3% from the 2022 end.
Annualized adjusted return on equity was 19%, which contracted 110 bps year over year.
Total PMIERs available assets were $2.6 billion and net risk-based required assets totaled $1.4 billion at third-quarter 2023 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
The Travelers Companies (TRV - Free Report) reported third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.
Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio, which improved by 90.6%.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.
Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.
RLI Corp. (RLI - Free Report) reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter. Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.
Gross premiums written increased 11.3% year over year to $449.3 million. Underwriting income of $4.2 million decreased 52.3%, primarily due to Hawaiian wildfire losses. The combined ratio deteriorated 170 basis points year over year to 98.7. Our estimate was 90.8.