Enact Holdings, Inc. has recently released its 10-K report, providing a comprehensive overview of its financial condition and operations. The company, formerly known as Genworth Mortgage Holdings, Inc., operates as a private mortgage insurance company in the United States, offering mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans, contract underwriting services for mortgage lenders, and mortgage-related reinsurance products. Enact Holdings, Inc. has been serving the United States housing finance market since 1981 and is headquartered in Raleigh, North Carolina.
In the 10-K report, Enact discusses its business objectives, which include leveraging competitive strengths to drive market share, maintaining strong capitalization and earnings profile, and delivering attractive risk-adjusted returns to stockholders. The company primarily generates revenues by providing mortgage credit protection to customers in exchange for premiums, which are set based on the evaluation of underlying risk. Enact also employs a credit risk transfer (CRT) program to manage risk in its operating model and invests premiums in high-quality, predominantly fixed income assets to generate investment income.
The report highlights several key factors affecting Enact's results, including mortgage origination volume, penetration rate of private mortgage insurance, credit and regulatory environment, competition and market share, pricing, persistency rate and business mix, and credit quality. Enact's net investment income is determined primarily by the invested assets held and the average yield on its overall investment portfolio, while the recognition of realized investment gains or losses can vary significantly across periods. The report also discusses incurred losses, which represent current payments and changes in estimated future payments on claims that result from delinquent loans.
Enact provides specific figures to illustrate the impact of seasonality on its business, such as the increase in purchase mortgage origination volumes during late spring and summer months, leading to a rise in new insurance written (NIW) volume during the second and third quarters of a given year. The report also includes data on NIW, number of cures, and new delinquencies for primary policies, excluding run-off business, for specific periods.
The market has reacted to these announcements by moving the company's shares 0.83% to a price of $38.98. Check out the company's full 10-K submission here.
