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NMIH Q3 Earnings Miss Estimates on Higher Claims and Costs
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Key Takeaways
NMIH earned $1.23 per share, up 1.7% year over year, but missed estimates by 6.8%.
Primary insurance in force grew 5.2% to $229.7 billion, while net investment income climbed 20.3%.
Claims expenses surged 56.9%, pushing the combined ratio up 700 basis points to 38.5%.
NMI Holdings, Inc. (NMIH - Free Report) reported third-quarter 2026 adjusted earnings of $1.23 per share, which rose 1.7% year over year. The bottom line missed the Zacks Consensus Estimate of $1.32 by 6.8%.
Revenues increased 5% year over year on a GAAP basis. Third-quarter revenues of $187.6 million missed the consensus estimate by 5.3%. Higher insurance claims and underwriting expenses weighed on profitability despite growth in investment income and the insured portfolio.
NMI Holdings Inc Price, Consensus and EPS Surprise
Net premiums earned increased 2.7% year over year to $155.5 million, supported by continued expansion in the company's insured portfolio. The Zacks Consensus Estimate was pegged at $160 million. The figure was lower than our estimate of $159.5 million. However, premiums declined 1.3% sequentially from $157.5 million.
Net investment income climbed 20.3% to $32.2 million, providing a meaningful lift to revenues. The Zacks Consensus Estimate was pegged at $29.24 million. The figure was higher than our estimate of $28.8 million. The company recorded net realized investment losses of $0.3 million against gains of $0.3 million a year earlier. Other revenues were $0.2 million, marginally below the prior-year quarter.
NMI Holdings Expands Insurance Portfolio
New insurance written totaled $13.6 billion, up 4.3% year over year but down 15.4% sequentially. Purchase originations accounted for $12.9 billion, while refinance volume was $634 million. The weighted average credit score on new business improved to 758 from 756.
Primary insurance in force increased 5.2% year over year to $229.7 billion. The Zacks Consensus Estimate was pegged at $226 million. Primary risk in force grew 5.2% to $61.6 billion, while policies in force increased to 697,361 from 677,010. Annual persistency declined to 80.8% from 83.9%, indicating faster policy runoff.
NMIH Claims Increase as Underwriting Ratios Worsen
Insurance claims and claim expenses surged 56.9% year over year to $29.1 million. The loss ratio deteriorated 640 basis points to 18.7%, reflecting increased claims pressure. Sequentially, claims more than doubled from $13.1 million.
Underwriting and operating expenses increased 5.6% to $30.8 million. The expense ratio rose 50 basis points to 19.8%, while the combined ratio deteriorated 700 basis points to 38.5%. These increases indicate greater claims and operating costs relative to earned premiums.
NMI Holdings Sees Profitability Under Pressure
Net income declined 2.6% year over year to $93.5 million. Income before taxes decreased to $120.3 million from $123.7 million, as higher expenses more than offset revenue growth.
Adjusted net income decreased 2.1% to $93.7 million. Annualized adjusted return on equity was 13.9%, down 160 basis points from the year-ago quarter. The corresponding reported return on equity declined to 13.8% from 15.6%.
NMIH Builds Book Value and Maintains Capital Strength
Book value per share, excluding net unrealized investment gains and losses, increased 14.4% year over year to $38.13. Reported book value per share was $36.13, while total shareholders' equity stood at $2.7 billion at quarter-end.
Total PMIERs available assets were $3.8 billion compared with $3.4 billion a year earlier. Net risk-based required assets were $2.2 billion, leaving a substantial capital cushion. The company also repurchased 626,383 shares for $27.1 million during the quarter.
NMI Holdings Maintains a High-Quality Risk Mix
Loans with credit scores of 760 or higher represented $116.2 billion of primary insurance in force. Fixed-rate mortgages accounted for 97% of primary risk in force, limiting exposure to adjustable-rate mortgage resets.
The default rate increased to 1.23% from 1.05% a year earlier, while loans in default rose to 8,571 from 7,093. The portfolio remained geographically diversified, with the top 10 states accounting for 50.9% of primary risk in force, down from 51.2%.
Management highlighted the company's operating performance, portfolio growth and ability to support homeownership. During the quarter, National MI helped more than 53,000 borrowers obtain mortgage insurance coverage.
NMIH Ends the Quarter With Higher Cash and Assets
Cash and cash equivalents totaled $72.3 million as of Sept. 30, 2026, up from $43.9 million at the end of 2025. Total assets increased to $4 billion from $3.8 billion over the same period.
Debt stood at $418.5 million compared with $417 million at 2025-end. The company also reported $3.2 billion of fixed-maturity investments at fair value. Its reserve for insurance claims and claim expenses increased to $234.2 million from $196.4 million at the end of 2025.
Performance of Other Property and Casualty Insurers
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues fell 5.2% year over year to $4.47 billion, mainly due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%. Gross premiums written decreased 0.4% year over year to $5.39 billion.
Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million. Pre-tax current accident year catastrophic losses for the company’s Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
W.R. Berkley Corporation (WRB - Free Report) reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. Net premiums earned jumped 1.8% year over year. W.R. Berkley’s net premiums written increased 1.3% year over year to $3.27 billion.
Net investment income grew 9.2% year over year to $383.5 million, supported by higher income from the core investment portfolio. Income from fixed-maturity securities increased 10.3%, while the core portfolio contributed $369.1 million, up 12% year over year. The Zacks Consensus Estimate was pegged at $398.2 million. Our estimate was pegged at $384.3 billion.
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NMIH Q3 Earnings Miss Estimates on Higher Claims and Costs
Key Takeaways
NMI Holdings, Inc. (NMIH - Free Report) reported third-quarter 2026 adjusted earnings of $1.23 per share, which rose 1.7% year over year. The bottom line missed the Zacks Consensus Estimate of $1.32 by 6.8%.
Revenues increased 5% year over year on a GAAP basis. Third-quarter revenues of $187.6 million missed the consensus estimate by 5.3%. Higher insurance claims and underwriting expenses weighed on profitability despite growth in investment income and the insured portfolio.
NMI Holdings Inc Price, Consensus and EPS Surprise
NMI Holdings Inc price-consensus-eps-surprise-chart | NMI Holdings Inc Quote
NMIH’s Premiums and Investment Income Rise
Net premiums earned increased 2.7% year over year to $155.5 million, supported by continued expansion in the company's insured portfolio. The Zacks Consensus Estimate was pegged at $160 million. The figure was lower than our estimate of $159.5 million. However, premiums declined 1.3% sequentially from $157.5 million.
Net investment income climbed 20.3% to $32.2 million, providing a meaningful lift to revenues. The Zacks Consensus Estimate was pegged at $29.24 million. The figure was higher than our estimate of $28.8 million. The company recorded net realized investment losses of $0.3 million against gains of $0.3 million a year earlier. Other revenues were $0.2 million, marginally below the prior-year quarter.
NMI Holdings Expands Insurance Portfolio
New insurance written totaled $13.6 billion, up 4.3% year over year but down 15.4% sequentially. Purchase originations accounted for $12.9 billion, while refinance volume was $634 million. The weighted average credit score on new business improved to 758 from 756.
Primary insurance in force increased 5.2% year over year to $229.7 billion. The Zacks Consensus Estimate was pegged at $226 million. Primary risk in force grew 5.2% to $61.6 billion, while policies in force increased to 697,361 from 677,010. Annual persistency declined to 80.8% from 83.9%, indicating faster policy runoff.
NMIH Claims Increase as Underwriting Ratios Worsen
Insurance claims and claim expenses surged 56.9% year over year to $29.1 million. The loss ratio deteriorated 640 basis points to 18.7%, reflecting increased claims pressure. Sequentially, claims more than doubled from $13.1 million.
Underwriting and operating expenses increased 5.6% to $30.8 million. The expense ratio rose 50 basis points to 19.8%, while the combined ratio deteriorated 700 basis points to 38.5%. These increases indicate greater claims and operating costs relative to earned premiums.
NMI Holdings Sees Profitability Under Pressure
Net income declined 2.6% year over year to $93.5 million. Income before taxes decreased to $120.3 million from $123.7 million, as higher expenses more than offset revenue growth.
Adjusted net income decreased 2.1% to $93.7 million. Annualized adjusted return on equity was 13.9%, down 160 basis points from the year-ago quarter. The corresponding reported return on equity declined to 13.8% from 15.6%.
NMIH Builds Book Value and Maintains Capital Strength
Book value per share, excluding net unrealized investment gains and losses, increased 14.4% year over year to $38.13. Reported book value per share was $36.13, while total shareholders' equity stood at $2.7 billion at quarter-end.
Total PMIERs available assets were $3.8 billion compared with $3.4 billion a year earlier. Net risk-based required assets were $2.2 billion, leaving a substantial capital cushion. The company also repurchased 626,383 shares for $27.1 million during the quarter.
NMI Holdings Maintains a High-Quality Risk Mix
Loans with credit scores of 760 or higher represented $116.2 billion of primary insurance in force. Fixed-rate mortgages accounted for 97% of primary risk in force, limiting exposure to adjustable-rate mortgage resets.
The default rate increased to 1.23% from 1.05% a year earlier, while loans in default rose to 8,571 from 7,093. The portfolio remained geographically diversified, with the top 10 states accounting for 50.9% of primary risk in force, down from 51.2%.
Management highlighted the company's operating performance, portfolio growth and ability to support homeownership. During the quarter, National MI helped more than 53,000 borrowers obtain mortgage insurance coverage.
NMIH Ends the Quarter With Higher Cash and Assets
Cash and cash equivalents totaled $72.3 million as of Sept. 30, 2026, up from $43.9 million at the end of 2025. Total assets increased to $4 billion from $3.8 billion over the same period.
Debt stood at $418.5 million compared with $417 million at 2025-end. The company also reported $3.2 billion of fixed-maturity investments at fair value. Its reserve for insurance claims and claim expenses increased to $234.2 million from $196.4 million at the end of 2025.
Zacks Rank
NMIH 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 Property and Casualty Insurers
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues fell 5.2% year over year to $4.47 billion, mainly due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%. Gross premiums written decreased 0.4% year over year to $5.39 billion.
Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million. Pre-tax current accident year catastrophic losses for the company’s Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
W.R. Berkley Corporation (WRB - Free Report) reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. Net premiums earned jumped 1.8% year over year. W.R. Berkley’s net premiums written increased 1.3% year over year to $3.27 billion.
Net investment income grew 9.2% year over year to $383.5 million, supported by higher income from the core investment portfolio. Income from fixed-maturity securities increased 10.3%, while the core portfolio contributed $369.1 million, up 12% year over year. The Zacks Consensus Estimate was pegged at $398.2 million. Our estimate was pegged at $384.3 billion.