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Press Release

MGIC Investment Corporation Reports Third Quarter 2018 Results

Oct 17, 2018
Third Quarter 2018 Net Income of $181.9 million or $0.49 per Diluted Share
Third Quarter 2018 Adjusted Net Operating Income (Non-GAAP) of $180.9 million or $0.48 per Diluted Share

MILWAUKEE, Oct. 17, 2018 /PRNewswire/ -- MGIC Investment Corporation (NYSE: MTG) today reported operating and financial results for the third quarter of 2018. Net income for the quarter was $181.9 million, or $0.49 per diluted share, compared with net income of $120.0 million, or $0.32 per diluted share for the third quarter of 2017.

Adjusted net operating income for the third quarter of 2018 was $180.9 million, or $0.48 per diluted share, compared with $120.7 million, or $0.32 per diluted share for the third quarter of 2017. We present the non-GAAP financial measure "Adjusted net operating income" to increase the comparability between periods of our financial results. See "Use of Non-GAAP financial measures" below.

Third Quarter Summary

  • New Insurance Written of $14.5 billion, compared to $14.1 billion in the third quarter of 2017.
  • Insurance in force of $205.8 billion at September 30, 2018 increased by 2.5% during the quarter and 7.7% compared to September 30, 2017.
  • Primary delinquent inventory of 33,398 loans at September 30, 2018 decreased from 46,556 loans at December 31, 2017. Our primary delinquent inventory declined 19.0% year-over-year from 41,235 loans at September 30, 2017.
    • The 2008 and prior books accounted for approximately 18% of the September 30, 2018 primary risk in force but accounted for 72% of the new primary delinquent notices received in the quarter.
    • The percentage of primary loans that were delinquent at September 30, 2018 was 3.19%, compared to 4.55% at December 31, 2017, and 4.07% at September 30, 2017. The percentage of flow primary loans that were delinquent at September 30, 2018 was 2.52%, compared to 3.70% at December 31, 2017, and 3.19% at September 30, 2017.
  • Persistency, or the percentage of insurance remaining in force from one year prior, was 81.0% at September 30, 2018, compared with 80.1% at December 31, 2017 and 78.8% at September 30, 2017.
  • The loss ratio for the third quarter of 2018 was (0.6%), compared to (5.4%) for the second quarter of 2018 and 12.5% for the third quarter of 2017.
  • The underwriting expense ratio associated with our insurance operations for the third quarter of 2018 was 17.6%, compared to 16.4% for the second quarter of 2018 and 15.7% for the third quarter of 2017.
  • Net premium yield was 49.3 basis points in the third quarter of 2018, compared to 49.6 basis points for the second quarter of 2018 and 50.1 basis points for the third quarter of 2017.
  • Book value per common share outstanding increased by 5.4% during the quarter to $9.64.

_______________

Patrick Sinks, CEO of MTG and Mortgage Guaranty Insurance Corporation ("MGIC"), said, "In the third quarter we again saw an increase of insurance in force, a reduction in new primary delinquent notices, and a decline of the primary delinquent inventory.  The current operating environment enables us to report another quarter of strong earnings."  Sinks added that, "MGIC is, and expects to remain, in a strong capital position following the finalization of the revised PMIERs financial requirements and paid a $60 million dividend to the holding company in the third quarter."

_______________

Revenues

Total revenues for the third quarter of 2018 were $290.4 million, compared to $270.4 million in the third quarter last year. Net premiums written for the quarter were $251.9 million, compared to $255.9 million for the same period last year. Net premiums earned for the quarter were $250.4 million, compared to $237.1 million for the same period last year.  The increase was primarily due to the positive primary loss reserve development during the quarter. The positive loss reserve development resulted in a decrease in ceded losses, and a decrease in ceded premiums earned which were driven by a higher profit commission. The positive loss reserve development also resulted in a decrease of the accrual for premium refunds as we expect to pay fewer claims on the delinquent inventory. This benefit was partially offset by a lower premium yield on the higher average insurance in force in the quarter compared to the third quarter of 2017. Investment income for the third quarter increased to $36.4 million, from $30.4 million for the same period last year, resulting from an increase in the consolidated investment portfolio as well as higher yields.

Losses and expenses

Losses incurred   

Losses incurred in the third quarter of 2018 were ($1.5) million, compared to $29.7 million in the third quarter of 2017. During the third quarter of 2018 there was a $59 million reduction in losses incurred due to positive development on our primary loss reserves, before reinsurance, for previously received delinquent notices, compared to a reduction of $38 million in the third quarter of 2017. Losses incurred in the quarter associated with delinquent notices received in the quarter reflect the 15% decline in delinquent new notices received and a lower estimated claim rate when compared to the same period last year.

Underwriting and other expenses

Net underwriting and other expenses were $46.8 million in the third quarter of 2018, compared to $42.9 million in the same period last year. The increase in expenses was primarily due to higher stock based compensation, which resulted from a higher stock price at the grant date, and non-executive compensation.

Provision for income taxes

The effective income tax rate was 21.6% in the third quarter of 2018, compared to 34.9% in the third quarter of 2017. The decrease reflects the reduction to the statutory income tax rate.

Capital

  • As of September 30, 2018, total shareholders' equity was $3.49 billion and outstanding principal on borrowings was $837 million.
  • MGIC paid a dividend of $60 million to our holding company during the third quarter of 2018.
  • Preliminary Consolidated Risk-to-Capital was 9.8:1 as of September 30, 2018, compared to 11.1:1 as of September 30, 2017.
  • MGIC's PMIERs Available Assets totaled $4.8 billion, or $1.0 billion above its Minimum Required Assets as of September 30, 2018.

Other Balance Sheet and Liquidity Metrics

  • Total assets were $5.7 billion as of September 30, 2018, compared to $5.6 billion as of December 31, 2017, and $5.7 billion as of September 30, 2017.
  • The fair value of our investment portfolio, cash and cash equivalents was $5.2 billion as of September 30, 2018, compared to $5.1 billion as of December 31, 2017, and $5.0 billion as of September 30, 2017.
  • Investments, cash and cash equivalents at the holding company were $261 million as of September 30, 2018, compared to $216 million as of December 31, 2017, and $182 million as of September 30, 2017.

Conference Call and Webcast Details

MGIC Investment Corporation will hold a conference call today, October 17, 2018, at 10 a.m. ET to allow securities analysts and shareholders the opportunity to hear management discuss the company's quarterly results. The conference call number is 1-844-231-8825. The call is being webcast and can be accessed at the company's website at http://mtg.mgic.com/. A replay of the webcast will be available on the company's website through November 17, 2018 under "Newsroom."

About MGIC

MGIC (www.mgic.com), the principal subsidiary of MGIC Investment Corporation, serves lenders throughout the United States, Puerto Rico, and other locations helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality. At September 30, 2018, MGIC had $205.8 billion of primary insurance in force covering approximately one million mortgages.

This press release, which includes certain additional statistical and other information, including non-GAAP financial information, and a supplement that contains various portfolio statistics are both available on the Company's website at https://mtg.mgic.com/ under "Newsroom."

From time to time MGIC Investment Corporation releases important information via postings on its corporate website, and via postings on MGIC's website for information related to underwriting and pricing, and intends to continue to do so in the future. Such postings include corrections of previous disclosures, and may be made without any other disclosure. Investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information for MGIC Investment Corporation alerts can be found at https://mtg.mgic.com/shareholder-services/email-alerts. Enrollment information for MGIC alerts can be found https://www.mgic.com/ClearRates/index.html.

Safe Harbor Statement

Forward Looking Statements and Risk Factors:

Our actual results could be affected by the risk factors below. These risk factors should be reviewed in connection with this press release and our periodic reports to the Securities and Exchange Commission ("SEC"). These risk factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make. Forward looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as "believe," "anticipate," "will" or "expect," or words of similar import, are forward looking statements. We are not undertaking any obligation to update any forward looking statements or other statements we may make even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. No investor should rely on the fact that such statements are current at any time other than the time at which this press release was delivered for dissemination to the public.

In addition, the current period financial results included in this press release may be affected by additional information that arises prior to the filing of our Form 10-Q for the quarter ended September 30, 2018.

While we communicate with security analysts from time to time, it is against our policy to disclose to them any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report, and such reports are not our responsibility.

Use of Non-GAAP financial measures

We believe that use of the Non-GAAP measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors. These measures are not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be viewed as alternatives to GAAP measures of performance.

Adjusted pre-tax operating income (loss) is defined as GAAP income (loss) before tax, excluding the effects of net realized investment gains (losses), gain (loss) on debt extinguishment, net impairment losses recognized in income (loss) and infrequent or unusual non-operating items where applicable.

Adjusted net operating income (loss) is defined as GAAP net income (loss) excluding the after-tax effects of net realized investment gains (losses), gain (loss) on debt extinguishment, net impairment losses recognized in income (loss), and infrequent or unusual non-operating items where applicable. The amounts of adjustments to components of pre-tax operating income (loss) are tax effected using a federal statutory tax rate of 21% in 2018 and 35% in 2017.

Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss)  after making adjustments for interest expense on convertible debt, whenever the impact is dilutive, by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units and from convertible debt when dilutive under the "if-converted" method.

Although adjusted pre-tax operating income (loss) and adjusted net operating income (loss) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items represent items that are: (1) not viewed as part of the operating performance of our primary activities; or (2) impacted by both discretionary and other economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, along with the reasons for their treatment, are described below. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these adjustments. Other companies may calculate these measures differently. Therefore, their measures may not be comparable to those used by us.

(1)

Net realized investment gains (losses). The recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles.



(2)

Gains and losses on debt extinguishment. Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, improve our debt profile, and/or reduce potential dilution from our outstanding convertible debt.



(3)

Net impairment losses recognized in earnings. The recognition of net impairment losses on investments can vary significantly in both size and timing, depending on market credit cycles, individual issuer performance, and general economic conditions.



(4)

Infrequent or unusual non-operating items. Our income tax expense includes amounts related to our IRS dispute and is related to past transactions which are non-recurring in nature and are not part of our primary operating activities.

 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)














Three Months Ended September 30,


Nine Months Ended September 30,


(In thousands, except per share data)


2018


2017


2018


2017












Net premiums written


$

251,883



$

255,896



$

744,225



$

738,432



Revenues










Net premiums earned


$

250,426



$

237,083



$

729,497



$

697,322



Net investment income


36,380



30,402



103,003



89,595



Net realized investment gains (losses)


1,114



(50)



(1,112)



(227)



Other revenue


2,525



2,925



6,827



7,862



Total revenues


290,445



270,360



838,215



794,552



Losses and expenses










Losses incurred, net


(1,518)



29,747



8,877



84,705



Underwriting and other expenses, net


46,811



42,873



140,160



126,963



Interest expense


13,258



13,273



39,737



43,779



Loss on debt extinguishment








65



Total losses and expenses


58,551



85,893



188,774



255,512



Income before tax


231,894



184,467



649,441



539,040



Provision for income taxes


49,994



64,440



137,090



210,593



Net income


$

181,900



$

120,027



$

512,351



$

328,447



Net income per diluted share


$

0.49



$

0.32



$

1.36



$

0.86



 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES

EARNINGS PER SHARE (UNAUDITED)












Three Months Ended September 30,


Nine Months Ended September 30,

(In thousands, except per share data)


2018


2017


2018


2017

Net income


$

181,900



$

120,027



$

512,351



$

328,447


Interest expense, net of tax (1):









2% Convertible Senior Notes due 2020








907


5% Convertible Senior Notes due 2017








1,709


9% Convertible Junior Subordinated Debentures due 2063


4,566



3,757



13,698



11,270


Diluted net income available to common shareholders


$

186,466



$

123,784



$

526,049



$

342,333











Weighted average shares - basic


362,180



370,586



367,190



359,613


Effect of dilutive securities:









Unvested restricted stock units


1,697



1,473



1,547



1,367


2% Convertible Senior Notes due 2020








11,119


5% Convertible Senior Notes due 2017








4,743


9% Convertible Junior Subordinated Debentures due 2063


19,028



19,028



19,028



19,028


Weighted average shares - diluted


382,905



391,087



387,765



395,870


Net income per diluted share


$

0.49



$

0.32



$

1.36



$

0.86













(1)

Interest expense for the three and nine months ended September 30, 2018 and 2017 has been tax effected at a rate of 21% and 35%, respectively.

 

NON-GAAP RECONCILIATIONS


Reconciliation of Income before tax / Net income to Adjusted pre-tax operating income / Adjusted net operating income




Three Months Ended September 30,



2018


2017

(In thousands, except per share amounts)


Pre-tax


Tax
provision
(benefit)


Net

(after-tax)


Pre-tax


Tax
provision
(benefit)


Net

(after-tax)

Income before tax / Net income


$

231,894



$

49,994



$

181,900



$

184,467



$

64,440



$

120,027


Adjustments:













Additional income tax benefit (provision) related to IRS litigation




154



(154)





(619)



619


Net realized investment (gains) losses


(1,114)



(234)



(880)



50



18



32


Adjusted pre-tax operating income / Adjusted net operating income


$

230,780



$

49,914



$

180,866



$

184,517



$

63,839



$

120,678















Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share

Weighted average shares - diluted






382,905







391,087















Net income per diluted share






$

0.49







$

0.32


Additional income tax (benefit) provision related to IRS litigation













Net realized investment (gains) losses













Adjusted net operating income per diluted share






$

0.48


(1)





$

0.32


(1) For the Three Months Ended September 30, 2018, the Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share does not foot due to rounding of the adjustments.














Reconciliation of Income before tax / Net income to Adjusted pre-tax operating income / Adjusted net operating income




Nine Months Ended September 30,



2018


2017

(In thousands, except per share amounts)


Pre-tax


Tax
provision
(benefit)


Net

(after-tax)


Pre-tax


Tax
provision
(benefit)


Net

(after-tax)

Income before tax / Net income


$

649,441



$

137,090



$

512,351



$

539,040



$

210,593



$

328,447


Adjustments:













Additional income tax provision related to IRS litigation




(1,477)



1,477





(28,402)



28,402


Net realized investment losses


1,112



234



878



227



79



148


Loss on debt extinguishment








65



23



42


Adjusted pre-tax operating income / Adjusted net operating income


$

650,553



$

135,847



$

514,706



$

539,332



$

182,293



$

357,039















Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share

Weighted average shares - diluted






387,765







395,870















Net income per diluted share






$

1.36







$

0.86


Additional income tax provision related to IRS litigation












0.07


Net realized investment losses













Loss on debt extinguishment













Adjusted net operating income per diluted share






$

1.36







$

0.93


 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)










September


December 31,


September

(In thousands, except per share data)


2018


2017


2017

ASSETS







Investments (1)


$

4,980,432



$

4,990,561



$

4,717,392


Cash and cash equivalents


266,997



99,851



250,701


Reinsurance recoverable on loss reserves (2)


33,281



48,474



45,878


Home office and equipment, net


50,055



44,936



43,157


Deferred insurance policy acquisition costs


18,665



18,841



19,024


Deferred income taxes, net


111,613



234,381



416,167


Other assets


196,065



182,455



183,549


Total assets


$

5,657,108



$

5,619,499



$

5,675,868









LIABILITIES AND SHAREHOLDERS' EQUITY







Liabilities:







Loss reserves (2)


$

721,046



$

985,635



$

1,105,151


Unearned premiums


407,614



392,934



370,816


Federal home loan bank advance


155,000



155,000



155,000


Senior notes


419,425



418,560



418,271


Convertible junior debentures


256,872



256,872



256,872


Other liabilities


207,620



255,972



239,609


Total liabilities


2,167,577



2,464,973



2,545,719


Shareholders' equity


3,489,531



3,154,526



3,130,149


Total liabilities and shareholders' equity


$

5,657,108



$

5,619,499



$

5,675,868


Book value per share (3)


$

9.64



$

8.51



$

8.45









(1) Investments include net unrealized (losses) gains on securities


$

(72,399)



$

37,058



$

44,027


(2) Loss reserves, net of reinsurance recoverable on loss reserves


$

687,765



$

937,161



$

1,059,273


(3) Shares outstanding


362,155



370,567



370,562


 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES

ADDITIONAL INFORMATION - NEW INSURANCE WRITTEN
















2018


2017


Year-to-date


Q3


Q2


Q1


Q4


Q3


2018


2017

New primary insurance written (NIW) (billions)

$

14.5



$

13.2



$

10.6



$

12.8



$

14.1



$

38.3



$

36.3
















Monthly (including split premium plans) and annual premium plans

12.2



11.1



8.5



10.1



11.4



31.8



29.8


Single premium plans

2.3



2.1



2.1



2.7



2.7



6.5



6.5
















Direct average premium rate (bps) on NIW














Monthly (1)

51.3



54.6



55.8



56.3



55.5



53.7


55.3


Singles

153.5



165.6



167.4



170.5



176.8



161.8


175.9
















Product mix as a % of primary NIW














FICO < 680

7

%


6

%


7

%


8

%


7

%


7

%


7

%

>95% LTVs

17

%


15

%


13

%


13

%


12

%


16

%


10

%

>45% DTI

20

%


19

%


20

%


19

%


9

%


20

%


10

%

Singles

16

%


16

%


19

%


21

%


20

%


17

%


18

%

Refinances

5

%


6

%


12

%


13

%


9

%


7

%


11

%















New primary risk written (billions)

$

3.7



$

3.3



$

2.6



$

3.2



$

3.5



$

9.6



$

9.0
















(1)

Excludes loans with split and annual payments

 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES

ADDITIONAL INFORMATION - INSURANCE IN FORCE and RISK IN FORCE
















2018


2017






Q3


Q2


Q1


Q4


Q3





Primary Insurance In Force (IIF) (billions)

$

205.8



$

200.7



$

197.5



$

194.9



$

191.0






Total # of loans

1,048,088



1,033,323



1,026,797



1,023,951



1,014,092






Flow # of loans

999,382



982,208



973,187



968,649



956,772




















Average Loan Size of IIF (thousands)

$

196.4



$

194.2



$

192.3



$

190.4



$

188.4






Flow only

$

198.9



$

196.8



$

195.0



$

193.0



$

190.9




















Annual Persistency

81.0

%


80.1

%


80.2

%


80.1

%


78.8

%



















Primary Risk In Force (RIF) (billions)

$

53.1



$

51.7



$

50.9



$

50.3



$

49.4






By FICO (%)














FICO 760 & >

38

%


37

%


37

%


36

%


36

%





FICO 740-759

15

%


15

%


15

%


15

%


15

%





FICO 720-739

14

%


14

%


14

%


14

%


14

%





FICO 700-719

11

%


11

%


11

%


11

%


11

%





FICO 680-699

9

%


9

%


9

%


9

%


9

%





FICO 660-679

5

%


5

%


5

%


5

%


5

%





FICO 640-659

3

%


4

%


3

%


4

%


4

%





FICO 639 & <

5

%


5

%


6

%


6

%


6

%



















Average Coverage Ratio (RIF/IIF)

25.8

%


25.8

%


25.8

%


25.8

%


25.9

%



















Direct Pool RIF (millions)














With aggregate loss limits

$

232



$

233



$

233



$

236



$

238






Without aggregate loss limits

$

199



$

210



$

222



$

235



$

251




















Note:  The FICO credit score for a loan with multiple borrowers is the lowest of the borrowers' "decision FICO scores."  A borrower's "decision FICO score" is determined as follows: if there are three FICO scores available, the middle FICO score is used; if two FICO scores are available, the lower of the two is used; if only one FICO score is available, it is used.

 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES

ADDITIONAL INFORMATION - DEFAULT STATISTICS
















2018


2017






Q3


Q2


Q1


Q4


Q3





Primary IIF - Delinquent Roll Forward - # of Loans














Beginning Delinquent Inventory

36,037



41,243



46,556



41,235



41,317






New Notices

13,569



12,159



14,623



22,916



15,950






Cures

(14,197)



(15,350)



(18,073)



(15,712)



(13,546)






Paids (including those charged to a deductible or captive)

(1,374)



(1,501)



(1,571)



(1,803)



(2,195)






Rescissions and denials

(56)



(76)



(68)



(80)



(82)






Items removed from inventory

(581)



(438)



(224)





(209)






Ending Delinquent Inventory

33,398



36,037



41,243



46,556



41,235




















Primary IIF Delinquency Rate

3.19

%


3.49

%


4.02

%


4.55

%


4.07

%





Primary claim received inventory included in ending delinquent inventory

766



827



819



954



1,063




















Primary IIF - # of Delinquent Loans - Flow only

25,130



27,250



31,621



35,791



30,501






Primary IIF Delinquency Rate - Flow only

2.52

%


2.77

%


3.25

%


3.70

%


3.19

%



















Composition of Cures














Reported delinquent and cured intraquarter

3,938



3,447



5,530



5,520



4,347




















Number of payments delinquent prior to cure














3 payments or less

5,671



7,204



8,285



6,324



6,011






4-11 payments

3,896



4,000



3,501



2,758



2,374






12 payments or more

692



699



757



1,110



814






Total Cures in Quarter

14,197



15,350



18,073



15,712



13,546




















Composition of Paids














Number of payments delinquent at time of claim payment














3 payments or less

7



3



2



6



13






4-11 payments

140



147



184



181



222






12 payments or more

1,227



1,351



1,385



1,616



1,960






Total Paids in Quarter

1,374



1,501



1,571



1,803



2,195




















Aging of Primary Delinquent Inventory














Consecutive months delinquent














      3 months or less

9,484


28

%

8,554


24

%

8,770


21

%

17,119


37

%

11,331


27

%




      4-11 months

9,564


29

%

12,506


35

%

16,429


40

%

12,050


26

%

11,092


27

%




      12 months or more

14,350


43

%

14,977


41

%

16,044


39

%

17,387


37

%

18,812


46

%


















Number of payments delinquent














      3 payments or less

14,813


44

%

14,178


39

%

16,023


39

%

21,678


46

%

16,916


41

%




      4-11 payments

9,156


28

%

11,429


32

%

13,734


33

%

12,446


27

%

10,583


26

%




      12 payments or

      more

9,429


28

%

10,430


29

%

11,486


28

%

12,432


27

%

13,736


33

%




 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES








ADDITIONAL INFORMATION - RESERVES and CLAIMS PAID

























2018


2017


Year-to-date



Q3


Q2


Q1


Q4


Q3


2018


2017


Reserves (millions)















Primary Direct Loss Reserves

$

707



$

799



$

910



$

971



$

1,090







Pool Direct loss reserves

13



13



14



14



15







Other Gross Reserves

1



1





1









Total Gross Loss Reserves

$

721



$

813



$

924



$

986



$

1,105






















Primary Average Direct Reserve Per Delinquency

$21,184


$22,178

(1)

$22,060

(1)

$20,851

(1)

$26,430




































Net Paid Claims (millions) (3)

$

87



$

91



$

82



$

91



$

113



$

260



$

414



Total primary (excluding settlements)

65



75



80



89



101



220



357



Rescission and NPL settlements

19



14



7





9



40



54



Pool

2



1



2



2



2



5



8



Reinsurance

(3)



(3)



(11)



(5)



(3)



(17)



(18)



Other

4



4



4



5



4



12



13



Reinsurance terminations (3)



(2)









(2)




















Primary Average Claim Payment (thousands)

$

47.2


(2)

$

50.2


(2)

$

51.1


(2)

$

49.2



$

46.4


(2)

$

49.6


(2)

$

48.3


(2)

Flow only

$

42.0


(2)

$

45.2


(2)

$

45.2


(2)

$

45.1



$

43.7


(2)

$

44.2


(2)

$

44.7


(2)
















(1)

Excluding our estimate of delinquencies resulting from hurricane activity and their associated loss reserves, the average direct reserve per delinquency was approximately $24,000.

(2)

Excludes amounts paid in settlement disputes for claims paying practices and/or commutations of non-performing loans.

(3)

Net paid claims, as presented, does not include amounts received in conjunction with terminations or commutations of reinsurance agreements.

 

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES




ADDITIONAL INFORMATION - REINSURANCE, BULK STATISTICS and MI RATIOS



















2018


2017


Year-to-date


Q3


Q2


Q1


Q4


Q3


2018


2017

Quota Share Reinsurance














% insurance inforce subject to reinsurance

77.6

%


78.2

%


77.9

%


78.2

%


78.3

%





% NIW subject to reinsurance

75.4

%


75.9

%


73.3

%


77.0

%


86.1

%


75

%


86.8

%

Ceded premiums written and earned (millions)

$

25.2



$

21.4



$

33.0



$

32.3



$

30.9



$

79.6



$

88.7


Ceded losses incurred (millions)

$

(0.5)



$

(3.7)



$

7.8



$

7.3



$

5.9



$

3.6



$

15.0


Ceding commissions (millions) (included in underwriting and other expenses)

$

13.0



$

12.6



$

12.6



$

12.6



$

12.5



$

38.2



$

36.7


Profit commission (millions) (included in ceded premiums)

$

39.7



$

41.8



$

30.2



$

30.6



$

31.6



$

111.7



$

95.0
















Bulk Primary Insurance Statistics














Insurance in force (billions)

$

7.0



$

7.4



$

7.7



$

8.0



$

8.3






Risk in force (billions)

$

2.0



$

2.1



$

2.2



$

2.2



$

2.4






Average loan size (thousands)

$

145.4



$

144.5



$

143.8



$

144.6



$

145.4






Number of delinquent loans

8,268



8,787



9,622



10,765



10,734






Delinquency rate

16.98

%


17.19

%


17.95

%


19.47

%


18.73

%





Primary paid claims (millions)

$

18



$

22



$

24



$

25



$

26



$

64



$

90


Average claim payment (thousands)

$

69.6



$

67.7



$

72.8



$

64.4



$

56.1



$

70.1



$

63.5
















Mortgage Guaranty Insurance Corporation - Risk to Capital

9.0:1

(1)

9.1:1


9.4:1


9.5:1


10.1:1





Combined Insurance Companies - Risk to Capital

9.8:1

(1)

10.0:1


10.3:1


10.5:1


11.1:1