MGIC Investment Corporation

What they do

Through wholly-owned subsidiaries the company provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services. Primary mortgage insurance provides default protection on individual low down payment residential loans, covering a percentage of unpaid loan principal, delinquent interest and certain expenses. MGIC was licensed in all 50 states, the District of Columbia, Puerto Rico and Guam as of December 31, 2025, and wrote new insurance in each of those jurisdictions in 2025.

Revenue drivers

• Net premiums earned — The core revenue line: premiums on primary mortgage insurance on low down payment loans, largely delivered to Fannie Mae and Freddie Mac. Net premiums earned were $238.1 million in Q2 2026, versus $244.3 million in Q2 2025, with a net premium yield of 31.3 bps.
• Primary insurance in force (IIF) — The earnings base. Primary IIF was $304.8 billion as of June 30, 2026, up from $297.0 billion a year earlier, supported by Q2 2026 new insurance written of $17.8 billion.
• Reinsurance / credit risk transfer — Excess-of-loss and quota share reinsurance transactions cede a portion of risk, reduce PMIERs Minimum Required Assets and diversify capital sources, in exchange for ceded premium. MGIC renegotiated a seasoned reinsurance transaction in 2025 to recapture risk and reduce future ceded premium.
• Investment portfolio — Income on the investment portfolio that funds claims and PMIERs Available Assets, which totaled $5.6 billion at June 30, 2026; the company reports a holding company cash and investments balance separate from subsidiary assets.

Recent performance

Q2 2026 net income was $182.1 million, or $0.86 per diluted share, with adjusted net operating income of $183.7 million, or $0.87 per diluted share. That compared with net income of $192.5 million ($0.81 per diluted share) in Q2 2025, while sequential Q1 2026 net income was $165.3 million. Annualized return on equity was 14.5% for Q2 2026, and losses incurred, net were $11.0 million with a 4.6% loss ratio, versus a $(2.8) million loss benefit and (1.2)% loss ratio a year earlier. The primary delinquency inventory rose to 26,152 loans (2.37% count-based rate) from 24,444 (2.21%) at June 30, 2025. Book value per common share outstanding was $24.27, or $25.08 tangible book value per share.

Strategy

Management's stated 2026 strategies are to maximize value from mortgage credit enhancement, differentiate through customer experience, advance digital and analytical capabilities, excel at acquiring and distributing mortgage credit risk and capital, maintain financial strength through economic cycles, and attract and retain talent. In 2025 the company returned approximately $915 million to shareholders, repurchased 12% of shares outstanding, paid $0.56 per share in dividends and reduced total underwriting and other expenses, net by 8%. It retired legacy data platforms and established a new environment for MI operations technology, and expanded reinsurance protection for existing and future NIW. In Q2 2026 the board authorized an additional $750 million of share repurchases through December 31, 2028, and in Q3 2026 the company executed an excess-of-loss reinsurance transaction providing up to $168 million of coverage on eligible 2027 NIW.

Risks

• Economic and home price sensitivity — The company states its business is sensitive to macroeconomic conditions and housing, and that recession, unemployment, inflation or home price declines could increase delinquencies and claims.
• PMIERs capital requirements — MGIC must keep Available Assets at or above Minimum Required Assets to remain eligible to insure GSE loans; at June 30, 2026 Available Assets were $5.6 billion, $2.7 billion in excess of requirements, and both the requirements and the credit given for ceded reinsurance are subject to GSE amendment.
• Reinsurance availability and capital credit — The company's own risk factors note reinsurance may be unavailable at current levels and prices and that the GSEs may reduce the capital credit received for reinsurance transactions.
• GSE conservatorship and reform — FHFA placed the GSEs into conservatorship on September 7, 2008, and Congress and executive branch officials have periodically proposed GSE reform plans; the GSEs are the major purchasers of the mortgages underlying the company's new insurance written.

Outlook

Management characterized Q2 2026 as strong, citing a 14.5% return on equity and continued disciplined execution. The company continued returning capital after quarter end, repurchasing 1.5 million shares for $42.4 million through July 24, 2026 and declaring a $0.17 per common share dividend payable August 20, 2026. It also added up to $168 million of excess-of-loss reinsurance coverage on eligible 2027 new insurance written. Revenue has drifted down sequentially across the last four reported quarters, from $304.5 million in Q3 2025 to $295.4 million in Q2 2026.