Enact Holdings, Inc.

What they do

Enact writes and assumes residential mortgage guaranty insurance, mainly through its subsidiary Enact Mortgage Insurance Corporation (EMICO), an approved GSE insurer. It insures Low Down Payment Loans (loan amount above 80% of home value) against certain losses from nonpayment, helping originators sell mortgages to Fannie Mae, Freddie Mac and private investors. It sells mainly to mortgage originators, served approximately 1,600 customers in 2025, and also runs a Bermuda-based reinsurer, Enact Re, plus an immaterial Mexico run-off block.

Revenue drivers

• Net earned premiums on primary mortgage insurance — The core business: premiums on insured U.S. residential loans. Net premiums earned were $245 million in 2Q26, roughly flat year over year, with primary insurance in-force of $274 billion.
• New insurance written (NIW) — New policies written through origination customers; $15.2 billion in 2Q26, up 15% year over year, 96% monthly premium policies and 87% purchase originations. Full-year NIW was $51.5 billion in 2025.
• Net investment income — Income on the investment portfolio backing insurance reserves; $73 million in 2Q26, up from $66 million a year earlier.
• Credit risk transfer and reinsurance (Enact Re) — Enact Re, a wholly owned Bermuda subsidiary capitalized with $500 million in 2023, reinsures EMICO's new and in-force business under quota share agreements; CRT cedes risk to counterparties and investors.

Recent performance

Second quarter 2026 net income was $175 million, or $1.25 per diluted share, versus $168 million, or $1.11, in 2Q25. Adjusted operating income was $177 million, or $1.26 per share, and return on equity was 13.0%. NIW rose 15% year over year to $15.2 billion and primary insurance in-force reached $274 billion, up 2%. The loss ratio rose to 14% from 10% a year earlier, though both quarters included favorable reserve development ($37 million released in 2Q26 versus $48 million in 2Q25). PMIERs sufficiency was 161%, or approximately $1.9 billion above requirements.

Strategy

Management's stated priorities are differentiating Enact through underwriting to a deep, diversified customer base, investing in efficiencies and decision-making, and maintaining strong capital and earnings. It relies on a diversified credit risk transfer program to reduce loss volatility and manage capital efficiently. The company returned capital via a $0.24 quarterly dividend and, on August 5, 2026, raised full-year capital return guidance to $550–$600 million. It also began accepting VantageScore 4.0 mortgages in 2Q26, though volume is immaterial to date.

Risks

• PMIERs eligibility — Failure to meet PMIERs or GSE-imposed requirements could bar Enact from writing new insurance on GSE-acquired loans, materially harming results.
• Economic and home price decline — A severe recession or falling home prices would likely worsen loss experience on the insured portfolio.
• Reserve estimation uncertainty — Loss reserves are based on management estimates of claim rates and sizes, and actual claim payments may differ materially.
• Industry competition — Mortgage insurance is highly competitive, and competition could cost Enact market share, customers or premium pricing, or force wider credit guidelines.

Outlook

Management cites continued macroeconomic volatility and uncertainty, with CPI inflation at 3.5% year over year in June 2026 and unemployment at 4.2%, and mortgage rates remaining elevated. It describes current market and underwriting conditions, including pricing, as within its risk-adjusted return appetite. The company raised full-year 2026 capital return guidance to $550–$600 million.