Essent Group Reports $689.9M Net Income and $1.26B Revenue for Fiscal Year 2025

Essent Group Ltd. reported a net income of $689.9 million for the fiscal year 2025, compared to $729.4 million in 2024. The company's total revenues increased to $1.26 billion from $1.24 billion in the previous year. This growth was primarily driven by net premiums earned of $983.7 million and net investment income of $236.5 million. However, the increase in total revenues was offset by a rise in total losses and expenses, which amounted to $439.1 million, compared to $387.4 million in the prior year.

A significant change in the company's operational structure was the formalization of the Reinsurance segment, previously aggregated within the Mortgage Insurance segment. This shift reflects the growing importance of third-party reinsurance activities, particularly Essent Re's entry into the Lloyd's of London market. The Mortgage Insurance segment reported net premiums earned of $866.7 million, while the Reinsurance segment contributed $60.6 million. The Corporate & Other segment, which includes title insurance operations, reported net premiums earned of $56.4 million.

Key operational developments included an increase in new insurance written (NIW) to $46.6 billion, and insurance in force (IIF) to $248.4 billion. The company's default rate increased slightly to 2.50% from 2.27% in the previous year, with 20,210 loans in default as of December 31, 2025. The company attributed a portion of the increase in defaults to the impact of hurricanes in certain regions of the U.S. The company also continued to actively manage its risk exposure through third-party reinsurance arrangements, including excess of loss and quota share agreements.

Essent's financial strength ratings remained strong, with Essent Guaranty holding ratings of A2 (Moody's), A- (S&P), and A (A.M. Best). The company's risk management framework encompasses major risks, including mortgage and title insurance portfolios, investment risk, liquidity risk, and regulatory compliance risk. The company's investment portfolio, comprising 88.8% of total assets, is primarily focused on investment-grade fixed income securities. The company also allocated a percentage of its portfolio to limited partnership investments and traditional venture capital and private equity investments to generate informational and financial returns.

Looking ahead, Essent anticipates that claims may increase as its portfolio matures, given the historical trend of higher claims incidence in the third through sixth years after loan origination. The company also acknowledges the potential impact of macroeconomic factors, such as interest rates and housing prices, on its future performance. Essent's ability to maintain its financial strength ratings and adapt to evolving regulatory requirements will be crucial for its continued success in the housing finance industry.