Business Overview
Essent Group Ltd. (NYSE: ESNT) is a provider of private mortgage insurance, reinsurance, and title services focused on the U.S. housing finance market. The company underwrites first-lien, low-down-payment mortgages and supplements its core mortgage insurance franchise with a reinsurance business and title operations. Essent uses programmatic reinsurance and a proprietary pricing engine to manage risk and preserve capital while supporting lenders and borrowers.
Financial Performance
For the quarter ended Dec. 31, 2025, Essent reported net income of $155.0 million, or $1.60 per diluted share. Total revenues for the quarter were $312.4 million. For the full year 2025, net income was $690.0 million, or $6.90 per diluted share, on total revenues of $1,260.9 million. Net investment income was a meaningful contributor to results, rising year over year and supporting overall revenue in a high-rate environment.
The company reported net premiums earned of $983.7 million for the year. Provision for losses and loss adjustment expense increased versus the prior year, reflecting portfolio seasoning and specific weather-related losses noted in the period. Other underwriting and operating expenses remained well-controlled relative to earned premiums.
Operating Metrics
Mortgage insurance new insurance written (NIW) for Q4 2025 was $11.8 billion, with insurance in force of approximately $248.4 billion at year-end. Annualized persistency remained elevated, supporting earned premiums and duration of revenue. The company’s investment portfolio totaled in excess of $6.1 billion in available-for-sale securities at year-end, alongside strong holding-company liquidity.
Return on average equity for the quarter was in the mid-teens on an annualized basis. Book value per share continued to grow, with the company reporting a substantial multi-year increase in book value that reached over $60 per share at Dec. 31, 2025.
Key Developments
Essent announced a quarterly dividend increase to $0.35 per share and said it repurchased 9.9 million common shares for $576 million during 2025. The company also entered into quota-share reinsurance arrangements in the fourth quarter that expand third-party reinsurance participation for eligible new insurance written in 2027 and broaden reinsurance capacity for Essent Re’s third-party business.
Management highlighted the continued rollout of its EssentEDGE® pricing and analytics platform and noted ongoing investments in the title and settlement business. The firm cited sustained capital returns alongside balance‑sheet strength as central to its capital allocation approach.
Risks and Constraints
Essent’s results are exposed to mortgage default trends, housing prices, and macroeconomic variables, including unemployment and interest rates. Provisioning was higher in 2025, partly reflecting portfolio seasoning and isolated natural disaster-related defaults. Reinsurance availability and pricing remain key risk considerations, as do potential regulatory shifts affecting the role of private mortgage insurance in the mortgage market.
The company also faces operational risks associated with title operations and the integration of new business lines. Investment performance is sensitive to interest rate moves and credit spreads given the size of the investment portfolio.
Outlook / Guidance
Management emphasized capital flexibility and conservative leverage while signaling continued focus on shareholder returns. The board approved the dividend increase payable in March 2026 and extended a $500 million share-repurchase authorization. Areas to watch include new insurance written trends, persistency and default vintage performance, reinsurance program execution for 2027, and investment income through a high-rate environment.
Performance Summary
Essent reported a quarterly net income of $155.0 million and an annual net income of $690.0 million for 2025. The company expanded shareholder returns through dividends and repurchases while strengthening reinsurance protections and maintaining high-quality capital ratios. Key metrics to monitor are new insurance written, insurance‑in‑force levels, persistency, defaults by vintage, and investment income as the firm navigates evolving mortgage‑market dynamics.
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