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MTG Q3 Earnings Beat on Lower Expenses, Revenues Fall Y/Y
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Key Takeaways
MTG earned 85 cents per share, up 2.4% year over year, beating estimates by 6.2% despite lower revenues.
Insurance in force rose 2.2% to $307.3 billion, while new insurance written increased 3.6% to $17.1 billion.
MTG repurchased shares and expanded reinsurance coverage to manage mortgage credit exposure.
MGIC Investment Corporation (MTG - Free Report) reported third-quarter 2026 adjusted operating net income of 85 cents per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line improved 2.4% year over year. Total revenues declined 1.8% year over year to $299.1 million, reflecting lower net premiums earned and net investment income. The top line missed the Zacks Consensus Estimate by 3.3%.
The quarterly results benefited from higher new insurance written, increased insurance in force and lower underwriting expenses. However, elevated losses incurred and higher primary loan delinquencies remained headwinds.
MGIC Investment Corporation Price, Consensus and EPS Surprise
Insurance in force increased 2.2% year over year to $307.3 billion. The Zacks Consensus Estimate was pegged at $303 million. New insurance written increased 3.6% year over year to $17.1 billion, reflecting continued mortgage insurance business generation. Primary risk in force increased 2.4% year over year to $82.5 billion.
Net premiums earned declined 1.4% year over year to $238.5 million. The figure matched the Zacks Consensus Estimate and our estimate. Net investment income decreased 2.1% year over year to $60.9 million. The Zacks Consensus Estimate was pegged at $63 million. Our estimate was pegged at $63.1 million. The in-force portfolio yield declined 40 basis points year over year to 37.9 basis points, while net premium yield decreased 110 basis points to 31.2 basis points.
Persistency, which measures the percentage of insurance remaining in force, was 82.5%, down 250 basis points from the year-ago quarter. The decline in persistency accompanied continued expansion in the company's insurance portfolio.
MGIC's Underwriting Performance
Primary delinquency inventory increased 8% year over year to 27,814 loans. The primary delinquency rate increased to 2.52% from 2.32% in the prior-year quarter. New delinquency notices increased to 14,412 from 13,582 a year ago, while cures totaled 12,236.
Net losses incurred increased 119.1% year over year to $23.9 million. Current-quarter losses incurred totaled approximately $58 million, partially offset by $34 million of favorable development on prior-period losses. The loss ratio deteriorated to 10% from 4.5% in the year-ago quarter.
Underwriting and other expenses, net, declined 9.4% year over year to $44.9 million. The underwriting expense ratio improved 200 basis points year over year to 19.1%. However, total losses and expenses increased 12% year over year to $77.8 million, primarily reflecting higher losses incurred.
MTG's Profitability Trends
Adjusted pretax operating income declined 5.9% year over year to $220.9 million. Adjusted net operating income decreased 8.4% year over year to $174.7 million compared with $190.8 million in the prior-year quarter.
Despite the decline in absolute earnings, adjusted operating income per share increased, supported by a lower diluted weighted-average share count. Diluted weighted-average shares outstanding declined to 205.4 million from 231.4 million a year ago.
Annualized return on equity was 14.2%, down 60 basis points year over year. The company's quarterly profitability reflected the impact of higher credit losses, partially mitigated by disciplined expense management.
MGIC's Financial Update
As of Sept. 30, 2026, MGIC Investment's cash and cash equivalents totaled $215.4 million, down 41.6% from the 2025-end level. Total assets declined 4.1% from the 2025-end level to $6.37 billion. Investments totaled $5.54 billion compared with $5.81 billion at 2025-end.
Book value per share increased 5.2% year over year to $24.06. Tangible book value per share rose 8.9% year over year to $25.68. Shareholders' equity decreased 5.8% from the 2025-end level to $4.85 billion.
MGIC's available assets under the Private Mortgage Insurer Eligibility Requirements (PMIERs) totaled $5.8 billion, resulting in excess available assets of $2.8 billion. Holding company liquidity stood at $783 million, while the insurance subsidiary's risk-to-capital ratio was 9.6:1.
MTG's Capital Deployment and Dividend Update
During the third quarter, the company repurchased 5.1 million shares of common stock for $152.5 million. MGIC Investment also paid a quarterly dividend of 17 cents per common share, continuing its shareholder capital-return initiatives.
In October 2026, MTG repurchased an additional 2.5 million shares for $70.2 million. The company also declared a quarterly dividend of 17 cents per share, payable on Nov. 23, 2026, to shareholders of record as of Nov. 12. In November, its insurance subsidiary paid a $350 million dividend to the holding company.
MGIC's Reinsurance and Risk Management Initiatives
The company executed an excess-of-loss reinsurance transaction providing up to $168 million of coverage on eligible new insurance written in 2027. It also amended its 2023 quota-share reinsurance arrangement, reducing the cession rate to 23.98% from 25%, effective Dec. 31, 2026.
Subsequently, MGIC agreed to terms for quota-share reinsurance arrangements covering 40% of eligible 2028 new insurance written and 20% of eligible 2029 new insurance written. These arrangements support its strategy of managing mortgage credit exposure through risk distribution.
Zacks Rank
MGIC Investment currently carries a Zacks Rank #4 (Sell).
Everest Group, Ltd. (EG - Free Report) reported third-quarter 2026 operating income of $7.62 per share, which missed the Zacks Consensus Estimate of $9.38 by 18.8%. The bottom line increased 1.1% year over year. Total revenues of $3.71 billion declined 14% year over year and missed the Zacks Consensus Estimate of $3.84 billion by 3.3%.
Gross written premiums declined 14.5% year over year to $3.74 billion, reflecting lower contributions from Reinsurance Treaty and Legacy businesses. Net investment income increased 17.4% year over year to a quarterly record of $634 million, driven by strong private equity performance. Total claims and expenses declined 14.9% to $3.45 billion. The company reported an underwriting loss of $223 million, wider than the year-ago loss of $130 million.
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2026 operating earnings of $2.22 per share missed the Zacks Consensus Estimate of $2.46 by 9.8%. The bottom line increased 5.7% year over year. Revenues rose 9.7% year over year to $4.3 billion, which missed the consensus mark of $4.31 billion by 0.8%. Total expenses increased 10% year over year to $3.78 billion. Benefits, claims and settlement expenses rose 18.1% to $2.32 billion, while operating expenses increased 1.7% to $1.40 billion.
Non-GAAP operating earnings increased 2% to $481.8 million. Excluding significant variances, operating earnings advanced 3% to $540.6 million. Net income attributable to PFG increased to $631.9 million from $213.8 million a year earlier.
Prudential Financial, Inc. (PRU - Free Report) reported third-quarter 2026 adjusted operating income of $3.77 per share, beating the Zacks Consensus Estimate of $3.31 by 13.9%. The bottom line declined 6.9% year over year. Total adjusted operating revenues declined 14.3% year over year to $13.49 billion, missing the consensus estimate by 3.4%. Assets under management increased marginally to $1.62 trillion. Premiums declined 29.4% year over year to $5.89 billion. However, policy charges and fee income increased 2% to $1.15 billion.
Net investment income increased 8.8% year over year to $5.19 billion, while asset management fees, commissions and other income decreased 15.7% to $1.26 billion. Total benefits and expenses declined 14.8% year over year to $11.85 billion. Operating expenses increased 3.6% to $1.62 billion, while interest credited to policyholders' account balances rose 18.8% to $1.44 billion.
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MTG Q3 Earnings Beat on Lower Expenses, Revenues Fall Y/Y
Key Takeaways
MGIC Investment Corporation (MTG - Free Report) reported third-quarter 2026 adjusted operating net income of 85 cents per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line improved 2.4% year over year. Total revenues declined 1.8% year over year to $299.1 million, reflecting lower net premiums earned and net investment income. The top line missed the Zacks Consensus Estimate by 3.3%.
The quarterly results benefited from higher new insurance written, increased insurance in force and lower underwriting expenses. However, elevated losses incurred and higher primary loan delinquencies remained headwinds.
MGIC Investment Corporation Price, Consensus and EPS Surprise
MGIC Investment Corporation price-consensus-eps-surprise-chart | MGIC Investment Corporation Quote
MTG's Operational Update
Insurance in force increased 2.2% year over year to $307.3 billion. The Zacks Consensus Estimate was pegged at $303 million. New insurance written increased 3.6% year over year to $17.1 billion, reflecting continued mortgage insurance business generation. Primary risk in force increased 2.4% year over year to $82.5 billion.
Net premiums earned declined 1.4% year over year to $238.5 million. The figure matched the Zacks Consensus Estimate and our estimate. Net investment income decreased 2.1% year over year to $60.9 million. The Zacks Consensus Estimate was pegged at $63 million. Our estimate was pegged at $63.1 million. The in-force portfolio yield declined 40 basis points year over year to 37.9 basis points, while net premium yield decreased 110 basis points to 31.2 basis points.
Persistency, which measures the percentage of insurance remaining in force, was 82.5%, down 250 basis points from the year-ago quarter. The decline in persistency accompanied continued expansion in the company's insurance portfolio.
MGIC's Underwriting Performance
Primary delinquency inventory increased 8% year over year to 27,814 loans. The primary delinquency rate increased to 2.52% from 2.32% in the prior-year quarter. New delinquency notices increased to 14,412 from 13,582 a year ago, while cures totaled 12,236.
Net losses incurred increased 119.1% year over year to $23.9 million. Current-quarter losses incurred totaled approximately $58 million, partially offset by $34 million of favorable development on prior-period losses. The loss ratio deteriorated to 10% from 4.5% in the year-ago quarter.
Underwriting and other expenses, net, declined 9.4% year over year to $44.9 million. The underwriting expense ratio improved 200 basis points year over year to 19.1%. However, total losses and expenses increased 12% year over year to $77.8 million, primarily reflecting higher losses incurred.
MTG's Profitability Trends
Adjusted pretax operating income declined 5.9% year over year to $220.9 million. Adjusted net operating income decreased 8.4% year over year to $174.7 million compared with $190.8 million in the prior-year quarter.
Despite the decline in absolute earnings, adjusted operating income per share increased, supported by a lower diluted weighted-average share count. Diluted weighted-average shares outstanding declined to 205.4 million from 231.4 million a year ago.
Annualized return on equity was 14.2%, down 60 basis points year over year. The company's quarterly profitability reflected the impact of higher credit losses, partially mitigated by disciplined expense management.
MGIC's Financial Update
As of Sept. 30, 2026, MGIC Investment's cash and cash equivalents totaled $215.4 million, down 41.6% from the 2025-end level. Total assets declined 4.1% from the 2025-end level to $6.37 billion. Investments totaled $5.54 billion compared with $5.81 billion at 2025-end.
Book value per share increased 5.2% year over year to $24.06. Tangible book value per share rose 8.9% year over year to $25.68. Shareholders' equity decreased 5.8% from the 2025-end level to $4.85 billion.
MGIC's available assets under the Private Mortgage Insurer Eligibility Requirements (PMIERs) totaled $5.8 billion, resulting in excess available assets of $2.8 billion. Holding company liquidity stood at $783 million, while the insurance subsidiary's risk-to-capital ratio was 9.6:1.
MTG's Capital Deployment and Dividend Update
During the third quarter, the company repurchased 5.1 million shares of common stock for $152.5 million. MGIC Investment also paid a quarterly dividend of 17 cents per common share, continuing its shareholder capital-return initiatives.
In October 2026, MTG repurchased an additional 2.5 million shares for $70.2 million. The company also declared a quarterly dividend of 17 cents per share, payable on Nov. 23, 2026, to shareholders of record as of Nov. 12. In November, its insurance subsidiary paid a $350 million dividend to the holding company.
MGIC's Reinsurance and Risk Management Initiatives
The company executed an excess-of-loss reinsurance transaction providing up to $168 million of coverage on eligible new insurance written in 2027. It also amended its 2023 quota-share reinsurance arrangement, reducing the cession rate to 23.98% from 25%, effective Dec. 31, 2026.
Subsequently, MGIC agreed to terms for quota-share reinsurance arrangements covering 40% of eligible 2028 new insurance written and 20% of eligible 2029 new insurance written. These arrangements support its strategy of managing mortgage credit exposure through risk distribution.
Zacks Rank
MGIC Investment 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 Multi-Line Insurers
Everest Group, Ltd. (EG - Free Report) reported third-quarter 2026 operating income of $7.62 per share, which missed the Zacks Consensus Estimate of $9.38 by 18.8%. The bottom line increased 1.1% year over year. Total revenues of $3.71 billion declined 14% year over year and missed the Zacks Consensus Estimate of $3.84 billion by 3.3%.
Gross written premiums declined 14.5% year over year to $3.74 billion, reflecting lower contributions from Reinsurance Treaty and Legacy businesses. Net investment income increased 17.4% year over year to a quarterly record of $634 million, driven by strong private equity performance. Total claims and expenses declined 14.9% to $3.45 billion. The company reported an underwriting loss of $223 million, wider than the year-ago loss of $130 million.
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2026 operating earnings of $2.22 per share missed the Zacks Consensus Estimate of $2.46 by 9.8%. The bottom line increased 5.7% year over year. Revenues rose 9.7% year over year to $4.3 billion, which missed the consensus mark of $4.31 billion by 0.8%. Total expenses increased 10% year over year to $3.78 billion. Benefits, claims and settlement expenses rose 18.1% to $2.32 billion, while operating expenses increased 1.7% to $1.40 billion.
Non-GAAP operating earnings increased 2% to $481.8 million. Excluding significant variances, operating earnings advanced 3% to $540.6 million. Net income attributable to PFG increased to $631.9 million from $213.8 million a year earlier.
Prudential Financial, Inc. (PRU - Free Report) reported third-quarter 2026 adjusted operating income of $3.77 per share, beating the Zacks Consensus Estimate of $3.31 by 13.9%. The bottom line declined 6.9% year over year. Total adjusted operating revenues declined 14.3% year over year to $13.49 billion, missing the consensus estimate by 3.4%. Assets under management increased marginally to $1.62 trillion. Premiums declined 29.4% year over year to $5.89 billion. However, policy charges and fee income increased 2% to $1.15 billion.
Net investment income increased 8.8% year over year to $5.19 billion, while asset management fees, commissions and other income decreased 15.7% to $1.26 billion. Total benefits and expenses declined 14.8% year over year to $11.85 billion. Operating expenses increased 3.6% to $1.62 billion, while interest credited to policyholders' account balances rose 18.8% to $1.44 billion.