ESNT Q2 Earnings & Revenues Top Estimates on Strong Reinsurance Growth

Essent Group ESNT reported second-quarter 2026 operating net income per share of $2.08, which beat the Zacks Consensus Estimate by 17.5%. The bottom line improved 7.8% year over year.

The quarterly results benefited from higher total revenues, stronger net premiums earned in the reinsurance segment, and increased income from other invested assets, partly offset by higher provisions for losses and LAE, as well as higher operating expenses.

Behind the Headlines

Revenues were $362.7 million, up 13.6% year over year. The top line exceeded the Zacks Consensus Estimate by 10.5%.

Net premiums earned rose 11.2% year over year to $276.8 million.

Net investment income increased 3.9% year over year to $61.6 million. Income from other invested assets jumped to $19.4 million from $4.5 million a year ago.

Mortgage insurance in force (IIF) was $249.7 billion, up 1.2%. New insurance written (NIW) was $14.1 billion, up 12.8% year over year.

Segment Performance and Mix Shift

Mortgage Insurance: Net premiums earned were $215.7 million, down 2.1% year over year. The MI loss ratio deteriorated to 13.6% from 7% a year ago, while the expense ratio improved to 14.8% from 15.3%. The MI combined ratio deteriorated to 28.4% from 22.3%. Pretax income totaled $212.6 million, down 3.4% year over year.

Reinsurance: Net premiums earned rose to $43.6 million, soared 214.5% year over year, reflecting continued expansion of the reinsurance business. The Reinsurance combined ratio deteriorated to 77.9% from 19.4%, driven by higher loss provisions and acquisition costs. Segment pretax income totaled $17.1 million compared with $18.3 million a year ago.

Credit performance and portfolio dynamics

MI IIF increased to $249.7 billion with NIW of $14.1 billion. Annual persistency was 84%, compared with 85.8% a year ago. The default rate increased to 2.53% from 2.12% a year ago, while the number of loans in default rose to 20,278 from 17,255.

The provision for losses and LAE increased to $48.9 million from $17 million. Within Mortgage Insurance, the provision increased to $29.3 million from $15.3 million, while Reinsurance losses increased to $18.7 million from $0.36 million a year ago. 

Operating expenses and seasonality

Other underwriting and operating expenses were $75.3 million, up 19.9% year over year. The increase reflected higher compensation and benefits, acquisition costs and other underwriting and operating expenses.

ESNT's Capital, Liquidity & Risk Transfer

As of June 30, 2026, book value per share rose to $63.01 from $56.98 a year ago. Cash and investments available for sale at the holding companies totaled $1.1 billion. Debt-to-capital was 8.1%, with $500 million of outstanding borrowings and $500 million of undrawn committed capacity.

Capital return: The company’s board declared a 35 cents per share quarterly dividend, payable on Sept. 10, 2026. Through July 31, Essent repurchased 5.8 million common shares for $348 million.

Essent Guaranty can pay up to $330 million of ordinary dividends in 2026.

Zacks Rank

ESNT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industry Players

Selective Insurance Group, Inc. SIGI reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%.

Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines and a 2% decline in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.

NMI Holdings, Inc. NMIH reported second-quarter 2026 adjusted earnings of $1.38 per share, which rose 13.1% year over year. The bottom line beat the Zacks Consensus Estimate of $1.28 by 7.81%.

Revenues rose 8.1% year over year to $188 million and surpassed the consensus mark of $185 million by 1.73%. Primary insurance in force increased 5.8% to $227.1 billion. Net premiums earned increased 5.7% year over year to $157.5 million, reflecting continued expansion in the insured portfolio. Our estimate was $157 million. Net investment income climbed 21.6% to $30.3 million, providing another meaningful lift to the top line. Our estimate was $27 million.

Mercury General Corporation (MCY) reported second-quarter 2026 operating income of $3.52 per share, which surged 31.8% year over year and beat the Zacks Consensus Estimate of $1.80 by 95.6%. Revenues of $1.67 billion surpassed the consensus mark by 5.8%.

Net premiums earned increased 9.6% year over year to $1.5 billion. Net premiums written rose 5.3% to $1.56 billion, while direct premiums written advanced 9.3% to $1.62 billion. Net investment income before taxes increased 14% year over year to $89.8 million. After-tax investment income rose 16.1% to $76.6 million.

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This article originally published on Zacks Investment Research (zacks.com).

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