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Enact Holdings, Inc.

ACT
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Business Summary

Enact Holdings, Inc. (ACT) operates as a leading private mortgage insurance company within the United States housing finance market, serving since 1981 across all 50 states and the District of Columbia. The company's core mission is to facilitate homeownership by providing residential mortgage guaranty insurance, primarily for Low Down Payment Loans where the loan amount exceeds 80% of the home's value. This insurance protects lenders and investors against losses from loan nonpayment, thereby enabling secondary market sales, particularly to Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac, which require such credit enhancement. Enact serves a diverse customer base of approximately 1,600 mortgage lenders, including national banks, non-bank lenders, and credit unions . The company emphasizes a rigorous underwriting approach, strong capital levels, and a credit risk transfer (CRT) program to manage loss volatility and optimize capital.

The company's business model is centered on generating revenue through premiums from mortgage credit protection and investment income from its portfolio. Premiums are set based on an evaluation of underlying risk and are generally recognized over the policy term. The majority of policies are primary mortgage insurance, providing protection on individual loans at specified coverage percentages, typically between 6% and 35% of the underlying primary insurance in-force (IIF) . Premiums are usually borrower-paid monthly, but can also be single, annual, or split payments. The company also performs fee-based contract underwriting services, indemnifying customers against material errors in underwriting decisions, subject to contractual limitations . A small portion of its operations includes a run-off insurance block with reference properties in Mexico, which is deemed immaterial to results .

For the fiscal year ended December 31, 2025, Enact reported total revenues of $1,235,827 thousand , a 3% increase from $1,201,774 thousand in 2024 . Net income for 2025 was $674,244 thousand , a 2% decrease from $688,068 thousand in 2024 . Diluted earnings per share (EPS) for 2025 was $4.52 , compared to $4.37 in 2024 . The company's loss ratio for 2025 was 11% , significantly higher than 4% in 2024 , primarily due to a lower net reserve release of $200 million in 2025 compared to $252 million in 2024 . Acquisition and operating expenses, net of deferrals, decreased slightly to $208,326 thousand in 2025 from $213,310 thousand in 2024 . Net investment income increased by 11% to $266,153 thousand in 2025 from $240,564 thousand in 2024 . Cash and cash equivalents stood at $582,493 thousand as of December 31, 2025 , a decrease from $599,432 thousand in 2024 . Long-term borrowings were $744,481 thousand in 2025 , up from $743,050 thousand in 2024 .

Year-over-year, total revenues increased by 3% driven by an 11% increase in net investment income and a marginal increase in premiums . Premiums increased by $401 thousand to $980,505 thousand in 2025, while net investment income grew by $25,589 thousand . Net investment losses decreased by 29% from $(22,807) thousand in 2024 to $(16,276) thousand in 2025 . Total losses and expenses increased by 16% to $376,990 thousand in 2025, primarily due to a 183% increase in losses incurred to $109,526 thousand . The expense ratio decreased slightly to 22% in 2025 from 23% in 2024 . Primary IIF increased by 2% to $273,147 million in 2025, and primary RIF increased to $71,363 million from $69,985 million in 2024 . The persistency rate decreased slightly to 82% in 2025 from 83% in 2024 .

During 2025, new insurance written (NIW) increased by 1% to $51.5 billion compared to $51.0 billion in 2024 . The company entered into two excess-of-loss reinsurance transactions on January 27, 2025, covering expected NIW from January 1, 2025, through December 31, 2025, and January 1, 2026, through December 31, 2026, providing reinsurance coverage of approximately $225 million and $260 million, respectively . On September 23, 2025, a quota share reinsurance agreement was signed to cede approximately 34% of a portion of expected NIW from January 1, 2027, through December 31, 2027 . A five-year, unsecured revolving credit facility of $435 million was entered into on September 30, 2025, replacing a previous $200 million facility . On October 27, 2025, another excess-of-loss reinsurance transaction was executed, covering expected NIW from January 1, 2027, through December 31, 2027, with approximately $170 million in reinsurance coverage . The company also increased its quarterly dividend to $0.21 per common share in April 2025 and authorized a new share repurchase program of up to an additional $350 million of common stock on April 30, 2025 .

Business Outlook

Management intends to continue paying regular quarterly cash dividends under the current program, with a dividend of $0.21 per share declared for the first quarter of 2026 . Future dividend payments are subject to quarterly review and approval by the Board of Directors and Genworth, and are targeted to be paid in the third month of each quarter .

A key growth area for Enact is the potential for increased demand for mortgage insurance if the private label securitization market expands in the future . Additionally, the company is investing in new opportunities for Enact through its subsidiaries . The company's strategy includes investing to increase differentiation, drive efficiencies, and enhance decision-making .

Operationally, the company is regularly upgrading and enhancing its systems and technology to expand capabilities, improve productivity, and enhance customer experience. This includes policy administration, billing, delinquency and claims processes and systems, enhancing the speed and efficiency of pricing and auto-decisioning capabilities, ensuring optimal integration capabilities to customer loan origination and mortgage insurance ordering and rate quoting processes, and utilizing artificial intelligence and machine learning in risk and portfolio management . Technology costs are managed through continued automation of key business processes, reducing the application portfolio, and using contract employees to scale resource capacity as needed .

Planned capital allocation priorities include supporting existing policyholders, growing the mortgage insurance business, funding attractive new business opportunities, and returning capital to shareholders . The company authorized a new share repurchase program on February 3, 2026, allowing for the repurchase of up to an additional $500 million of common stock . This is in addition to the $350 million share repurchase program authorized on April 30, 2025 , under which the company had $61,082 thousand remaining as of December 31, 2025 . The company also entered into two excess-of-loss reinsurance transactions on January 27, 2025, providing reinsurance coverage of approximately $225 million for 2025 NIW and $260 million for 2026 NIW . On October 27, 2025, another excess-of-loss reinsurance transaction was entered into, providing approximately $170 million in reinsurance coverage for 2027 NIW . A quota share reinsurance agreement was also signed on September 23, 2025, to cede approximately 34% of a portion of expected NIW from January 1, 2027, through December 31, 2027 .

Management explicitly flagged several structural headwinds and execution risks. The U.S. economy faces lingering uncertainty due to continued inflationary pressure, the geopolitical environment, U.S. national debt and ongoing budget deficits, and macroeconomic concerns, including international trade and escalating tariffs . Housing affordability has deteriorated due to elevated mortgage rates and home price appreciation outpacing median family income, although affordability pressures eased slightly at the end of 2025 as mortgage rates declined and national house price growth slowed . Regulatory changes, such as the FHFA's implementation of VantageScore 4.0 for mortgages delivered to Fannie Mae and Freddie Mac, introduce uncertainty regarding their full impact on the business, processes, and financial results . The potential for changes to the charters or practices of the GSEs, including actions to decrease or discontinue the use of mortgage insurance, could adversely affect the business . The Basel III Endgame rule, as originally proposed, would have eliminated the 50% risk-based capital benefit for high-LTV portfolio mortgages with private mortgage insurance for banking organizations with $100 billion or more in total assets, which, if adopted, could reduce demand for mortgage insurance . However, U.S. banking regulators have since withdrawn that proposal and indicated it will be re-proposed with significant revisions, leaving the timing, substance, and ultimate impact uncertain .

Risk Factors

The company faces material risks including the inability to meet PMIERs requirements, which could result in ineligibility to write new insurance on GSE-acquired loans and materially adverse effects on business, results of operations, and financial condition . A deterioration in economic conditions, a severe recession, or a decline in home prices may adversely affect loss experience, increasing the likelihood and severity of borrower defaults . Loss reserves are subject to inherent uncertainty and significant judgment, with small changes in assumptions or deviations from actual experience potentially having material impacts on reserves and net income . Inaccurate models or variability in loss development compared to model estimates and actuarial assumptions could also materially adversely affect the business . Intense competition within the mortgage insurance industry, including from government agencies and other private mortgage insurers, could lead to loss of market share, lower premiums, wider credit guidelines, and other adverse changes . Changes to GSE charters or practices, including decisions to decrease or discontinue the use of mortgage insurance, could significantly reduce the number of mortgages insured by the company . The amount of mortgage insurance written could decline if alternatives to private mortgage insurance are used or lower coverage levels are selected . Undue concentration by customer or geographic region may increase exposure to business loss or adverse portfolio performance . The company's risk management programs may not be effective in identifying or mitigating all risks . Changes in interest rates could materially adversely affect the business by reducing new mortgage originations and refinances, increasing defaults, or impacting the investment portfolio . The company may be unable to maintain or increase capital needed in a timely manner, on anticipated terms or at all, including through CRT transactions, which may not be available, affordable, or adequate to protect against losses . Adverse rating agency actions could result in business loss and negatively affect financial condition . Failure to effectively manage investment portfolio risks could adversely affect the business . If servicers fail to adhere to appropriate servicing standards or experience disruptions, losses could increase . The delegated underwriting program may subject the business to unanticipated claims if customers exceed authority or fail to follow guidelines . Premiums charged may not adequately compensate for risks and costs, as rates cannot be adjusted after issuance . A decrease in Low Down Payment Loan originations or an increase in mortgage insurance cancellations could result in revenue decline . Cybersecurity incidents or failures to protect consumer information could damage reputation and adversely affect the business . Extensive regulation and changes in regulation may reduce profitability and limit growth . Inability to maintain sufficient regulatory capital could lead to restrictions on doing business or impact financial strength ratings . The company is jointly and severally liable for U.S. federal income taxes owed by the Genworth Consolidated Group , and leaving this group could result in higher future income tax payments due to unified loss rules .

Management Priorities

Management's message to shareholders emphasizes a commitment to supporting its mission of helping people buy and keep their homes, while leveraging competitive strengths to maximize stockholder value. This strategy is underpinned by priorities to differentiate Enact from competitors through best-in-class underwriting and investment in efficiencies, maintain strong capital levels and earnings through robust underwriting, stress testing, conservative leverage, and a diversified CRT program, and deliver attractive risk-adjusted returns by writing profitable new business and a disciplined capital allocation policy . The company intends to continue to pay regular quarterly cash dividends under the current program, with a dividend of $0.21 per share declared for the first quarter of 2026 . Future dividend payments are subject to quarterly review and approval by the Board of Directors and Genworth, and will be targeted to be paid in the third month of each quarter . Management also highlighted the authorization of a new share repurchase program on February 3, 2026, allowing for the repurchase of up to an additional $500 million of EHI's common stock . Returning capital to shareholders, balanced with growth and risk management priorities, remains a key commitment to drive shareholder value .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Our Products and Services
  3. [3] Item 1, Business — Contract Underwriting Services
  4. [4] Item 1, Business — Our Corporate Information
  5. [5] Item 7, MD&A — Results of Operations
  6. [6] Item 7, MD&A — Results of Operations
  7. [7] Item 7, MD&A — Results of Operations
  8. [8] Item 7, MD&A — Results of Operations
  9. [9] Item 7, MD&A — Results of Operations
  10. [10] Item 7, MD&A — Results of Operations
  11. [11] Item 7, MD&A — Results of Operations
  12. [12] Item 7, MD&A — Results of Operations
  13. [13] Item 7, MD&A — Loss experience
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Revenues
  17. [17] Item 7, MD&A — Revenues
  18. [18] Item 8, Consolidated Balance Sheets
  19. [19] Item 8, Consolidated Balance Sheets
  20. [20] Item 8, Consolidated Balance Sheets
  21. [21] Item 8, Consolidated Balance Sheets
  22. [22] Item 7, MD&A — Revenues
  23. [23] Item 7, MD&A — Revenues
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 7, MD&A — Revenues
  26. [26] Item 7, MD&A — Revenues
  27. [27] Item 7, MD&A — Revenues
  28. [28] Item 7, MD&A — Revenues
  29. [29] Item 7, MD&A — Results of Operations
  30. [30] Item 7, MD&A — Results of Operations
  31. [31] Item 7, MD&A — Results of Operations
  32. [32] Item 7, MD&A — Results of Operations
  33. [33] Item 7, MD&A — Results of Operations
  34. [34] Item 7, MD&A — Results of Operations
  35. [35] Item 7, MD&A — Our portfolio
  36. [36] Item 7, MD&A — Insurance in-force and Risk in-force
  37. [37] Item 7, MD&A — Insurance in-force and Risk in-force
  38. [38] Item 7, MD&A — Insurance in-force and Risk in-force
  39. [39] Item 7, MD&A — Our portfolio
  40. [40] Item 7, MD&A — Our portfolio
  41. [41] Item 7, MD&A — Our portfolio
  42. [42] Item 7, MD&A — Our portfolio
  43. [43] Item 7, MD&A — Recent transactions
  44. [44] Item 7, MD&A — Recent transactions
  45. [45] Item 7, MD&A — Recent transactions
  46. [46] Item 7, MD&A — Recent transactions
  47. [47] Item 7, MD&A — Capital returns
  48. [48] Item 7, MD&A — Capital returns
  49. [49] Item 5, Dividends
  50. [50] Item 7, MD&A — Capital returns
  51. [51] Item 1, Business — Private Mortgage Insurance
  52. [52] Item 1, Business — Our Corporate Information
  53. [53] Item 1, Business — Our Strategy
  54. [54] Item 1, Business — Information Technology
  55. [55] Item 1, Business — Information Technology
  56. [56] Item 7, MD&A — Capital returns
  57. [57] Item 7, MD&A — Capital returns
  58. [58] Item 5, Issuer Purchases of Equity Securities
  59. [59] Item 7, MD&A — Macroeconomic environment
  60. [60] Item 7, MD&A — Macroeconomic environment
  61. [61] Item 7, MD&A — Regulatory developments
  62. [62] Item 1A, Risk Factors — Changes to the charters or practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, results of operations and financial condition.
  63. [63] Item 1A, Risk Factors — Changes in regulations that adversely affect the insurance markets in which we operate could affect our operations significantly and could reduce the demand for our products.
  64. [64] Item 1A, Risk Factors — Changes in regulations that adversely affect the insurance markets in which we operate could affect our operations significantly and could reduce the demand for our products.
  65. [65] Item 1A, Risk Factors — If we are unable to continue to meet the requirements mandated by PMIERs, or any additional restrictions which may be imposed on us by the GSEs, we may not be eligible to write new insurance on loans acquired by the GSEs, which would have a material adverse effect on our business, results of operations and financial condition.
  66. [66] Item 1A, Risk Factors — A deterioration in economic conditions, a severe recession or a decline in home prices may adversely affect our loss experience.
  67. [67] Item 1A, Risk Factors — When we are notified that an insured loan is in default, we establish loss reserves based on management’s estimate of claim rates and claim sizes, which are subject to uncertainties and are based on assumptions about certain estimation parameters that may be volatile. As a result, the actual claim payments we make may materially differ from the amount of our corresponding loss reserves.
  68. [68] Item 1A, Risk Factors — If the models used in our business are inaccurate or there are differences and/or variability in loss development compared to our model estimates and actuarial assumptions, it could have a material adverse effect on our business, results of operations and financial condition.
  69. [69] Item 1A, Risk Factors — Competition within the mortgage insurance industry could result in the loss of market share, loss of customers, lower premiums, wider credit guidelines and other changes that could have a material adverse effect on our business, results of operations and financial condition.
  70. [70] Item 1A, Risk Factors — Changes to the charters or practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance, could adversely affect our business, results of operations and financial condition.
  71. [71] Item 1A, Risk Factors — The amount of mortgage insurance we write could decline significantly if alternatives to private mortgage insurance are used or lower coverage levels of mortgage insurance are selected.
  72. [72] Item 1A, Risk Factors — Changes in the composition of our business or undue concentration by customer or geographic region may adversely affect us by increasing our exposure to loss of business or adverse performance of a small segment of our portfolio.
  73. [73] Item 1A, Risk Factors — Our risk management programs may not be effective in identifying or adequate in controlling or mitigating the risks we face.
  74. [74] Item 1A, Risk Factors — Changes in interest rates could materially adversely affect our business, results of operations and financial condition.
  75. [75] Item 1A, Risk Factors — We may be unable to maintain or increase the capital needed in our business in a timely manner, on anticipated terms or at all, including through improved business performance, CRT transactions, securities offerings or otherwise, in each case as and when required.
  76. [76] Item 1A, Risk Factors — Adverse rating agency actions may result in a loss of business and adversely affect our business, results of operations and financial condition.
  77. [77] Item 1A, Risk Factors — If we are unable to effectively manage risks in our investment portfolio, it could adversely affect our business, results of operations and financial condition.
  78. [78] Item 1A, Risk Factors — If servicers fail to adhere to appropriate servicing standards or experience disruptions to their businesses, our losses could increase.
  79. [79] Item 1A, Risk Factors — Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims.
  80. [80] Item 1A, Risk Factors — The premiums we agree to charge for our mortgage insurance coverage may not adequately compensate us for the risks and costs associated with the coverage we provide.
  81. [81] Item 1A, Risk Factors — A decrease in the volume of Low Down Payment Loan originations or an increase in the volume of mortgage insurance cancellations could result in a decline in our revenue.
  82. [82] Item 1A, Risk Factors — We collect, process, store, share, disclose and use consumer information and other data, and an actual or perceived failure to protect such information and data or respect users’ privacy could damage our reputation and brand and adversely affect our business, results of operations and financial condition.
  83. [83] Item 1A, Risk Factors — Our business is extensively regulated and changes in regulation may reduce our profitability and limit our growth.
  84. [84] Item 1A, Risk Factors — Inability to maintain sufficient regulatory capital could result in restrictions or prohibitions on our doing business or impact our financial strength ratings, which could have a material adverse impact on our business, results of operations and financial condition.
  85. [85] Item 1A, Risk Factors — We are jointly and severally liable for any U.S. federal income taxes owed by the Genworth Consolidated Group for taxable periods in which we are a member of the group.
  86. [86] Item 1A, Risk Factors — If we leave the Genworth Consolidated Group, we may be required to pay more income tax in the future.
  87. [87] Item 1, Business — Our Strategy

Analysis on 5/19/2026