MGIC Investment (MTG) 5 Nov 24 2024 Q3 Earnings call transcript
1min read In the third quarter of 2024, MGIC Investment Corporation reported a net income of $200 million and an annualized return on equity of 15.6%, showcasing a robust financial performance. This result is a testament to the company's disciplined approach to risk management and its leadership in the market.
Financial Highlights
MGIC's insurance in force ended the quarter at $293 billion, with an annual persistency rate of 85%. The company wrote $17.2 billion of new insurance in the quarter, a significant increase from the previous quarter. The strong credit quality of MGIC's portfolio, coupled with favorable credit performance, has contributed to these impressive financial results.
Capital Management
MGIC's capital management strategies have played a crucial role in driving value for its stakeholders. The company repurchased 5.2 million shares of common stock for $123 million and paid a quarterly common stock dividend of $34 million. The repurchase activity was reflective of the company's strong credit performance and financial results, as well as higher market valuation levels. MGIC expects share repurchases to remain its primary means of returning capital to shareholders.
Market Conditions and Outlook
The housing market, while currently constrained by limited supply and affordability challenges, is showing signs of easing. The recent interest rate cut and lower mortgage rates have led to a rise in mortgage applications, suggesting a positive outlook for the resiliency of MGIC's business. The company is optimistic about the future, with its focus on serving customers with quality offerings and best-in-class service.
Credit Performance and Risk Management
MGIC's credit performance has been a significant factor in its financial success. The company's reinsurance program, which includes forward commitment quota share agreements and excess of loss agreements, has played a key role in risk and capital management strategies. This program reduces volatility and provides diversification and flexibility to MGIC's sources of capital at attractive costs, reducing its PMIERs required assets by $2.2 billion or 40%.
Looking Ahead
MGIC's strategic approach to risk management, capital management, and market leadership positions the company well for the future. The company's disciplined approach, focus on customer service, and commitment to innovation will continue to drive value for its stakeholders. As MGIC navigates the ever-evolving market conditions, its strong financial position and strategic outlook bode well for its long-term growth prospects.
In summary, MGIC Investment Corporation's third quarter performance underscores its financial strength and strategic acumen. With a focus on risk management, capital management, and market leadership, MGIC is well-positioned to continue delivering value to its stakeholders and navigating the challenges of the housing market.
