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MGIC (MTG) Q4 Earnings & Revenues Beat Estimates, Up Y/Y

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MGIC Investment Corporation (MTG - Free Report) reported fourth-quarter 2019 operating net income per share of 49 cents, which beat the Zacks Consensus Estimate by 16.7% and was also up by the same magnitude year over year.

Insurance in force increased 6% to $222.3 billion, despite lower persistency

The company witnessed 9% decline in primary delinquency to 30,028 loans.

MGIC Investment Corporation Price, Consensus and EPS Surprise


Operational Update

MGIC Investment recorded total operating revenues of $311.6 million, which increased 9.1% year over year on higher net investment income (up 7.8%) and net premiums earned (up 8.4%). The same beat the Zacks Consensus Estimate by 1.44%

The increase was due to higher average insurance in force and a rise in premiums from single premium policy cancellations, partially offset by the effect of lower premium rates.

Persistency, the percentage of insurance remaining in force from one year prior, was 75.8% as of Dec 31, 2019, down 590 basis points (bps) year over year.

New insurance written was $19.3 billion, up 58.2% year over year.

Net paid claims amounted to $73 million, down 2.7% year over year.

Net underwriting and other expenses totaled $52.3 million, up 4.6% year over year.

In the quarter under review, loss ratio was 8.9%, which improved 240 basis points year over year.

Financial Update

Book value per share, a measure of net worth, grew 23.1% year over year to $12.41 as of Dec 31, 2019.

MGIC Investment had $325 million in cash and investments, up 31% year over year.

Total assets were $6.2 billion, up 8.8% year over year.

Risk-to-capital ratio was 9.6:1 as of Dec 31, 2019 compared with 9.8:1 as of Dec 31, 2018.

Zacks Rank

MGIC Investment currently carries a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Insurance Releases

Some other insurers that have reported earnings this season are Unum Group UNM, The Progressive Corp. PGR and Chubb Ltd. CB, each beating their estimate by 2.17%, 58.8% and 8.6%, respectively.

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