Enact Q4 2025 Earnings Results & Report

Enact EPS Results

• Actual EPS: $1.23
• Consensus EPS: $1.09
• Beat/Miss: Beat by +$0.14
• One Year Ago EPS: N/A
• EPS Beat Rate: 5 of last 8 quarters

Enact Revenue Results

• Actual Revenue: $312.71 million
• Expected Revenue: $316.83 million
• Beat/Miss: Missed by -$4.13 million
• YoY Revenue Growth: N/A

Enact (NASDAQ:ACT) operates as a private mortgage insurance company in the United States. It engages in writing and assuming residential mortgage guaranty insurance. The company also offers private mortgage insurance products primarily insuring prime-based, individually underwritten residential mortgage loans; contract underwriting services for mortgage lenders; and mortgage-related reinsurance products. It primarily serves originators of residential mortgage loans. The company was formerly known as Genworth Mortgage Holdings, Inc. and changed its name to Enact Holdings, Inc. in May 2021. Enact Holdings, Inc. was founded in 1981 and is headquartered in Raleigh, North Carolina. Enact Holdings, Inc. operates as a subsidiary of Genworth Holdings Inc.

Enact Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Enact reported a strong finish to 2025 with Q4 adjusted operating income of $179 million and full-year adjusted operating income of $688 million, an 11% increase in year-end adjusted book value per share to $37.87, and over $500 million returned to shareholders in 2025.
• Positive Sentiment: Credit performance outpaced expectations, producing a net reserve release of $60 million, a reduction in the claim-rate assumption from 9% to 8%, and a Q4 loss ratio of 7% ($18 million in losses).
• Positive Sentiment: Capital and liquidity remain strong with PMIER sufficiency at 162% (about $1.9 billion above requirement), $1.9 billion of PMIERs credit from CRTs, a new credit facility, and the board authorizing a $500 million share repurchase program alongside ~ $500 million capital-return guidance for 2026.
• Neutral Sentiment: Growth and pricing were stable—new insurance written was $14 billion in Q4 ($52 billion full-year) and insurance-in-force reached $273 billion; management expects base premium rates to be roughly flat in 2026 and cites its Rate360 pricing engine for disciplined, granular pricing.
• Negative Sentiment: Management highlighted macro and regulatory uncertainties (mortgage-rate volatility, affordability policy proposals, potential FHA/GSE actions and other regulatory developments) that could pressure origination volumes, persistency, and the pace or form of capital returns.

Presentation

[Operator]

Hello, and thank you for standing by. Welcome to Enact Fourth Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. I would now like to turn the call over to Daniel Cole. You may begin.

[Daniel Kohl, Head of Investor Relations at Enact Holdings Inc.]

Thank you and good morning. Welcome to our fourth quarter earnings call. Joining me today are Rohit Gupta, President and Chief Executive Officer, and Dean Mitchell, Chief Financial Officer and Treasurer. Rohit will provide an overview of our business performance and progress against our strategy. Dean will then discuss the details of our quarterly results before turning the call back to Rohit for closing remarks. We will then take your questions. The earnings materials we issued after market close yesterday contain our financial results for the quarter, along with a comprehensive set of financial and operational metrics. These are available on the investor relations section of our website. Today's call is being recorded and will include the use of forward-looking statements. These statements are based on current assumptions, estimates, expectations, and projections as of today's date.

[Daniel Kohl, Head of Investor Relations at Enact Holdings Inc.]

Additionally, they are subject to risks and uncertainties, which may cause actual results to be materially different, and we undertake no obligation to update or revise such statements as a result of new information. For a discussion of these risks and uncertainties, please review the cautionary language regarding the forward-looking statements in today's press release, as well as in our filings with the SEC, which will be available on our website. Please keep in mind the earnings materials and management's prepared remarks today include certain non-GAAP measures. Reconciliations of these measures to the most relevant GAAP metrics can be found in the press release, our earnings presentation, and our upcoming SEC filing on our website. With that, I'll turn the call over to Rohit.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Thank you, Daniel. Good morning, everyone. Enact delivered a very strong finish to 2025 that reflected the disciplined execution of our strategy, robust credit performance, and our commitment to shareholder value creation. For the full year, we reported adjusted operating income of $688 million or $4.61 per diluted share. We returned over $500 million of capital to shareholders, and the year-end adjusted book value per share increased 11% to $37.87. Before discussing the quarter, I want to take a moment to highlight some of our accomplishments in 2025. In a complex housing environment, we helped over 134,000 borrowers buy a home and over 16,000 borrowers keep their home.

[Rohit Gupta, CEO at Enact Holdings Inc.]

We continued to innovate our risk selection and pricing capabilities, leveraging advanced modeling and machine learning to deploy the latest version of our pricing engine, Rate360. We generated $52 billion of new insurance written and ended the year with record insurance in force of $273 billion. We maintained our commitment to expense discipline with full-year operating expenses at $217 million, excluding restructuring charges. We delivered record levels of capital returns to our shareholders, and we enhanced our financial flexibility by entering a new $435 million revolving credit facility and protected our forward books at attractive cost of capital through new CRT deals. Our execution continued to be recognized by the market, evidenced by receiving multiple credit ratings upgrades.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Finally, Enact received multiple industry and local awards, a testament to our commitment to excellence and providing an exceptional employee experience. Taken together, these accomplishments underscore the progress we made in 2025 and reinforce our confidence in Enact's long-term strategy. Turning to our fourth quarter results, we reported adjusted operating income of $179 million or $1.23 per diluted share, while adjusted return on equity was 13.5%, and we generated robust new insurance written of over $14 billion, driven by an increase in refinance originations as mortgage rates declined. However, 59% of loans in our book have rates below 6%, providing support for continued elevated persistency. The long-term drivers of housing demand remain strong, and we are confident that mortgage insurance will continue to play an essential role for both buyers and lenders.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Pricing remained constructive in the quarter, and our dynamic risk-adjusted pricing engine, Rate360, is enabling us to prudently price risk with discipline as market conditions continue to evolve. Our insurance in-force portfolio remains resilient, with risk-weighted average FICO score of 746. The risk-weighted average loan-to-value ratio was 93%, and layered risk was 1.2% of insurance in force. Credit performance continues to outperform our expectations, driven by favorable credit performance and effective loss mitigation efforts. This resulted in a net reserve release of $60 million in the quarter, partially driven by a claim rate reduction from 9% to 8%. Dean will touch more on this shortly.

[Rohit Gupta, CEO at Enact Holdings Inc.]

We also continued to advance our capital allocation priorities of supporting existing policyholders by maintaining a strong balance sheet, investing in our business to drive organic growth and efficiencies, funding attractive new business opportunities, and returning excess capital to shareholders. At the end of the quarter, our PMIER sufficiency ratio was 162%, providing significant financial flexibility, and our credit and investment portfolios are in excellent shape. Our strong capital position is further reinforced by the effective implementation of our CRT program and the backing of our credit facility. We continue to make steady progress against our strategic initiatives, advancing innovation in the MI business and continuing to expand into attractive adjacencies. Enact Re continued to perform well and participated in attractive GSE single and multifamily deals in the quarter, while maintaining strong underwriting standards and generating attractive risk-adjusted returns.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Enact Re remains a long-term growth opportunity that is both capital and expense efficient. Finally, as it relates to capital returns, during the fourth quarter, we returned $157 million to shareholders through share repurchases and dividends. We remain committed to our capital allocation priorities, and we are pleased to announce our 2026 capital return expectations of approximately $500 million. Additionally, we issued a press release last night announcing that our board of directors authorized a new share repurchase program that is the largest in Enact's history. In closing, we believe we are well positioned to continue navigating the uncertain macro environment, supporting our customers, and delivering sustainable value for shareholders, none of which would be possible without the hard work and talent of our employees, and I would like to take a moment to thank them for their continued efforts and contributions.

[Rohit Gupta, CEO at Enact Holdings Inc.]

With that, I will now hand the call over to Dean.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Thanks, Rohit, and good morning, everyone. We are pleased with the very strong results we delivered in the fourth quarter of 2025, which concluded an excellent year for Enact. Adjusted operating income was $179 million, or $1.23 per diluted share, compared to $1.09 per diluted share in the same period last year and $1.12 per diluted share in the third quarter of 2025. Adjusted operating return on equity was 13.5%. For the full year, adjusted operating income totaled $688 million, or $4.61 per diluted share, compared to $718 million, or $4.56 per diluted share in 2024. A detailed reconciliation of GAAP net income to adjusted operating income can be found in our earnings release.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Turning to the fourth quarter, new insurance written was $14 billion for the fourth quarter, up 2% sequentially and up 8% year-over-year. This new business is well priced, has a strong credit risk profile, and is comprised of loans that are well underwritten to prudent market standards. Persistency was 80% in the fourth quarter, down 3 points sequentially and down 2 points year-over-year on lower prevailing mortgage rates. While mortgage rates have fallen recently, only 22% of our mortgages in our portfolio have rates at least 50 basis points above December's average of 6.2%, providing support for continued elevated persistency.

[Dean Mitchell, CFO at Enact Holdings Inc.]

The combination of solid new insurance written and lower but still elevated persistency drove primary insurance in force of $273 billion in the fourth quarter, up $1 billion from the third quarter of 2025, and $4 billion, or approximately 1% year-over-year. Total net premiums earned were $246 million, up $1 million sequentially and flat year-over-year. Our base premium rate of 39.6 basis points was down 0.1 basis points sequentially, in line with our expectations. As a reminder, our base premium rate is impacted by several factors and tends to modestly fluctuate from quarter to quarter. Given our current expectations for the MI market size and mortgage rates, we anticipate our base premium rate in 2026 to be relatively flat versus 2025.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Our net earned premium rate was 34.8 basis points, down slightly sequentially, driven by higher ceded premiums. Investment income in the fourth quarter was $69 million, flat sequentially and up $6 million, or 10% year-over-year. Our new money investment yield of approximately 5% contributed to an increase in the weighted average portfolio book yield of 4.4% for the quarter. While we typically hold investments to maturity, we may selectively pursue income enhancement opportunities. During the quarter, we sold certain assets that will allow us to recoup realized losses through future higher net investment income. Turning to credit, we continue to see strong loss performance across our overall portfolio.

[Dean Mitchell, CFO at Enact Holdings Inc.]

New delinquencies increased sequentially to 13,700 in the quarter from 13,000 in the third quarter of 2025, in line with expected seasonal trends. Our new delinquency rate for the quarter remained consistent with pre-pandemic levels at 1.5%, an increase of 10 basis points from the third quarter of 2025, and flat versus the fourth quarter of 2024. Total delinquencies in the fourth quarter increased sequentially to 24,900 from 23,400, as new outpaced cures and the delinquency rate increased 10 basis points sequentially to 2.6%. Losses in the fourth quarter of 2025 were $18 million, and the loss ratio was 7%, compared to $36 million and 15% respectively in the third quarter of 2025, and $24 million and 10% respectively in the fourth quarter of 2024.

[Dean Mitchell, CFO at Enact Holdings Inc.]

We reduced our claim rate in the quarter for new and recent delinquencies from 9% to 8%, after factoring in the continued strong cure performance sustained throughout 2025. We believe the 8% claim rate is well aligned with the current macroeconomic uncertainties and remains consistent with our measured and prudent reserve philosophy. The net reserve release of $60 million in the fourth quarter was driven by favorable cure performance, our loss mitigation activities, and the reduction in our claim rate assumption. This compares to reserve releases of $45 million and $56 million in the third quarter of 2025 and fourth quarter of 2024, respectively. We maintain our focus on disciplined cost management in 2025.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Operating expenses for the fourth quarter of 2025 were $59 million, and the expense ratio was 24%, compared to $53 million and 22% respectively in the third quarter of 2025, and $57 million and 24% respectively in the fourth quarter of 2024. For the full year, our operating expenses of $218 million or $217 million, excluding reorganization costs, were favorable to our updated guidance of approximately $219 million. For 2026, we anticipate an operating expense range of $215 million-$220 million, excluding any reorganization costs, as we continue to prudently manage our expense base, balancing our continued focus to drive further efficiencies in our business while also investing in our growth initiatives.

[Dean Mitchell, CFO at Enact Holdings Inc.]

We continue to operate from a strong capital and liquidity position, reinforced by our robust PMIER sufficiency and the successful execution of our diversified CRT program. Our PMIER sufficiency was 162%, or $1.9 billion above PMIERs requirements at the end of the fourth quarter. As of December 31, 2025, our third-party CRT program provides $1.9 billion of PMIERs capital credit. Turning now to capital allocation. During the quarter, we paid out $30 million or $0.21 per share through our quarterly dividend, and we bought back 3.4 million shares at an average price of $37.66 for $127 million.

[Dean Mitchell, CFO at Enact Holdings Inc.]

For the full year 2025, we returned $503 million to shareholders, $121 million through our quarterly dividends, and we repurchased 10.5 million shares at an average price of $36.25, for a total of $382 million. Through January 30, we have repurchased an additional 0.8 million shares for $31 million. For 2026, we expect capital returns of approximately $500 million. As in the past, the ultimate amount and form of capital return to shareholders will be dependent on business performance, market conditions, and regulatory approvals. As we announced yesterday, the board has authorized a new $500 million share repurchase program and declared a quarterly dividend of $0.21 per common share, payable March 19.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Overall, we are pleased with our performance in 2025, and we believe we are well positioned for another strong year in 2026. We remain focused on prudently managing risk, maintaining a strong balance sheet, and delivering solid returns for our shareholders. With that, let me turn the call back to Rohit.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Thanks, Dean. Looking ahead to 2026, our strong balance sheet, the portfolio of significant embedded equity, and our disciplined operating approach position us to effectively navigate uncertainty and capitalize on long-term opportunities. Additionally, demographic tailwinds, particularly among first-time homebuyers, support long-term demand for housing and for private mortgage insurance. Finally, as housing affordability and supply constraints shape policy discussions, we continue to actively engage with our lending partners, the GSEs, the FHFA, and the administration, and believe we remain well positioned to navigate and adapt to an evolving policy environment. We remain committed to helping people responsibly achieve the dream of homeownership and deliver long-term value for all our stakeholders. Operator, we are now ready for Q&A.

[Operator]

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Doug Harter with UBS. Your line is open.

[Douglas Harter, Director and Equity Analyst at UBS]

... Thanks, and good morning. Appreciate the guidance on the capital return. You know, in the past couple of years, you were able to exceed your initial capital return goal. Like, how do you think about, you know, the sensitivities to that capital return goal for 2026? And what could cause that to, you know, come in better, or, you know, what would be the factors that might cause you to need to slow it down?

[Dean Mitchell, CFO at Enact Holdings Inc.]

Yeah, Doug. Hey, it's Dean. Thanks for the question. Yeah, we're much like we said in our prepared remarks, we set a capital return guidance for the beginning of the year. We're very confident in delivering $500 million back to shareholders. But we'll continue to evaluate dynamics in the marketplace, namely our business performance, how the business continues to perform, how we continue to grow the business, and certainly loss performance during 2026. We're also gonna be looking at the macroeconomic environment. Obviously, we're looking at the prevailing macroeconomic environment, the uncertainties that exist today, and still feel confident in our ability to return $500 million. But we're gonna look and see how that evolves over the course of the remainder of the year, and that could have an effect.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Then lastly, and maybe a little bit less in this market right now, is the regulatory environment. Is there anything going on either in the context of PMIERs or with state regulatory environments or otherwise, that would cause us to rethink and adjust our planned $500 million capital return in 2026? But we're confident that right now, given those dynamics, we're confident in the ability to return $500 million to shareholders in 2026.

[Douglas Harter, Director and Equity Analyst at UBS]

Great. Appreciate that, Dean. Thank you.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Thanks, Doug.

[Operator]

Thank you. Please stand by for our next question. Our next question comes from the line of Mihir Bhatia with Bank of America. Your line is open.

[Mihir Bhatia, Stock Analyst and Equity Research at Bank of America Merrill Lynch]

Hi, good morning. Thank you for taking my question. I wanted to start actually where you ended that last answer, Dean, just about regulatory environment. Obviously, I think everyone's been hearing about a potential for an FHA re-rate cut, affordability agenda, and other such things. Are there a few things that you guys are particularly paying attention to from a regulatory or government action standpoint that maybe are worth highlighting for investors, that they should just keep an eye out for?

[Rohit Gupta, CEO at Enact Holdings Inc.]

Yeah, good morning, Mihir. Thank you for the question. This is Rohit. I would say we remain actively engaged with the new administration, and that includes Treasury, FHFA, the GSE, as well as policymakers. And our focus continues to be on the topics that are in discussion. So the most macro basis, we are talking about limited inventory challenges as well as affordability challenges. So as ideas come up, we actually provide our input on the pros and cons of those ideas, but also equally important in our market, we provide input on implementation of those ideas and what that entails.

[Rohit Gupta, CEO at Enact Holdings Inc.]

So, but ideas like credit scores come up, what are the pros and cons of different credit score ideas, all the way to some of the recent ideas that are being discussed from the announcement of GSEs buying mortgage-backed securities, ban on institutional investors buying single-family homes. So I would say those ideas are more on the table, as already announced. Any future ideas that come up, and there's a list of ideas that you mentioned that are in discussion, we are actively engaged on all those places. I couldn't call out any specific idea which is high up on the list from an execution perspective. I think it's just a list of ideas right now, but that's how I, I would frame it.

[Mihir Bhatia, Stock Analyst and Equity Research at Bank of America Merrill Lynch]

Okay. And then maybe just, like a little bit more just from 2026 thoughts. What type of mortgage market are you planning for in 2026? What does that mean for NIW or insurance in force? I think you talked about premium rate and OpEx, but just like, what are, what are you assuming for the mortgage market and NIW in that scenario?

[Rohit Gupta, CEO at Enact Holdings Inc.]

Yes. Yeah, Mihir, thank you for the question. So I would say in this environment, when there is a good amount of rate volatility and mortgage rate volatility specifically, it's tough to forecast origination, so I'll just give you that caveat upfront. But with that being said, we look at external originations forecast to figure out what the market originations are, overall mortgage originations are, and just to kind of index the market on the purchase origination side. So our take is that 90+% of the market in 2025 was, for MI market size, was purchase origination. And if you look at 2026, purchase origination forecasts in the market between Fannie Mae, MBA, Moody's, you see a range of an 8% increase all the way to a 24% increase, between those three external parties.

[Rohit Gupta, CEO at Enact Holdings Inc.]

So as we think about those external forecasts and convert that to a mortgage insurance market, we can see an increase of approximately 10%-15% from 2025 to 2026. Again, with the caveat being that that's based on our current forecast of mortgage rate expectations, affordability expectations, but that environment continues to be dynamic. So as the environment evolves, we will come back and update that forecast, but at this point of time, that feels like the most updated view, for us.

[Mihir Bhatia, Stock Analyst and Equity Research at Bank of America Merrill Lynch]

Right. No, that's quite helpful. And just one last one from me, and then I'll get back in queue. Just on default rates, where, where do you think they trend from here? Is it just like you read stability and seasonality from here? Anything we should be keeping in mind, whether from a vintage seasoning, vintage size type of view? Thanks.

[Dean Mitchell, CFO at Enact Holdings Inc.]

... Yeah, I'm here. Dean again. Hey, you know, from a delq perspective, I think we're seeing what we would expect to see. So, you know, just in terms of vintage contribution to delqs, you continue to see, you know, book years age up their loss development pattern. And so as newer books season or age towards higher, you know, parts of the loss development patterns, they're contributing more delinquencies, as you would expect, to the overall delq. I think the portfolio now stands at about 4 years, about 4.1 years on a weighted average basis. That's kinda towards that plateauing of-

[Rohit Gupta, CEO at Enact Holdings Inc.]

Mm-hmm.

[Dean Mitchell, CFO at Enact Holdings Inc.]

The loss development pattern, the normal loss development pattern. So I think what we'd expect heading into—and, you know, before we get to 2026, you know, what we saw in 2025 is kind of in line with what we expected. We expected year-over-year change in new delinquencies to slow. From 2023 to 2024, it was in the mid-teens. When you went from 2024 to 2025, it was in the mid-single digits. So very much in line with expectations. I think as we think about going from 2025 to 2026, we can still see it continue to moderate, so might still increase in terms of new delinquencies year over year, but moderating from its current level, recognizing that, you know, year over year, there were only 2,000 incremental new delinquencies, so we're dealing with pretty small numbers.

[Mihir Bhatia, Stock Analyst and Equity Research at Bank of America Merrill Lynch]

Right. No, understood. Thank you so much.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Thank you. Thanks, Mihir.

[Operator]

Please stand by for our next question. Our next question comes from the line of Rick Shane with J.P. Morgan. Your line is open.

[Richard Shane, Analyst at JPMorgan Chase & Co.]

Hey, guys. Thanks for taking my questions this morning. Look, in some ways, you guys have two books. You have the sort of pre-2022 legacy book with credit that's going to be sort of the best in a generation. You have a subsequent book that I think is evolving to be in line to better with your sort of underwritten expectations. As you look at the second part of that book, the new, the front book, I am curious if you can sort of put credit performance in some terms versus your expectations. How are things tracking? But specifically, are there things that you are seeing within certain cohorts, whether it's DTI, LTV, geography, that stand out in terms of elevated risks?

[Dean Mitchell, CFO at Enact Holdings Inc.]

Yeah, Rick. Hey, it's Dean. Thanks for the question. You know, if we think about vintage performance, I'd probably start off by saying it's kind of redundant to your question a little bit, but let me start off by saying all of our recent book years have been performing in line with or better than our pricing expectations. Obviously, to your a little bit underpinning your question, our newer books, so think, you know, 2022 through 2024, have been originated in primarily a purchase market, which tend to have higher risk attributes, like a little bit higher LTV, a little bit higher DTI than refi markets. And in addition to that, they have had much more modest home price appreciation, and in certain instances, depreciation, depending on the geography, compared to prior book years.

[Dean Mitchell, CFO at Enact Holdings Inc.]

We price for those attributes, so we price for our view of risk, we price for our future view of home prices, all in an objective to achieve an attractive return on equity. So on new vintages, we haven't seen performance differ from our pricing expectations that we established at policy inception, and we still believe, you know, we're onboarding, you know, the right risk at the right price, if you will, across vintages, across book years, based on a vintage performance to date. You know, yes, are there differences across attributes? Of course, at-risk attributes matter, geographies matter. Again, we factor that into our price, and we haven't seen anything that, you know, worked against our expectations and created negative variation.

[Richard Shane, Analyst at JPMorgan Chase & Co.]

Got it. Anything going forward that you're going to be... And I realize you have to be sensitive about this from a competitive perspective, but any areas that you would highlight where you're being a little bit more circumspect about risk?

[Dean Mitchell, CFO at Enact Holdings Inc.]

Yeah, I mean, we don't wanna go into our pricing schema, if you will, but let me just, I mean, I think it's the things that you would expect, Rick. So there's certainly areas of the country where housing supply has increased and home prices have either moderated or declined. You know, think parts of the Sun Belt, particularly, kind of, you know, Florida, Texas, California, Arizona. I don't think those are states that would surprise you as having pulled back a little bit in terms of home prices. You know, that's in contrast to the Northeast, where you still have low housing supply and home prices continue to appreciate, quite meaningfully.

[Dean Mitchell, CFO at Enact Holdings Inc.]

So, you know, we're monitoring housing markets as an example of something that we're keeping our eye on for affordability, supply, demand, dynamics, and we'll continue to consider that as we think about how to, again, crystallize our philosophy of the right risk and the right price.

[Rohit Gupta, CEO at Enact Holdings Inc.]

And Rick, just to add to Dean's point, we have talked about this in the past and also mentioned it in our prepared remarks on the call. We have very deep analytics and a lot of capabilities, even from a forecasting perspective, to incorporate those views in our pricing, and we have the ability to make those pricing changes on a very frequent basis when we think those are appropriate. So to Dean's point, not only historically speaking, but also looking forward, we continue to incorporate that view of risk, performance, geographic differences, or risk attributes at a loan level into our pricing, and now we have the mechanism to charge that price at a very granular level.

[Richard Shane, Analyst at JPMorgan Chase & Co.]

Got it. Okay, very helpful as always, guys. Thank you very much.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Thanks.

[Dean Mitchell, CFO at Enact Holdings Inc.]

Thanks, Rick.

[Operator]

Please stand by for our next question. Our next question comes from the line of Bose George with KBW. Your line is open.

[Bose George, Managing Direxctor at Keefe, Bruyette & Woods]

Hey, guys. Good morning. Actually, on expenses, you guys continue to do a good job there. Kept it flat now for a few years, and it seems to be the case again in 2026. Is technology the main driver? And then longer term, could we see the expense ratio continue to decline as expenses stay flat-ish or at least increase by less than revenues?

[Rohit Gupta, CEO at Enact Holdings Inc.]

Yeah. Thank you, Bose. Appreciate your question. So I would say from an expense perspective, you are correct. We have actually, not only kept our expenses flat in the last year, two years, but since our IPO, our expenses are, on a dollar basis, are probably down $30+ million on an annualized run rate basis. So we continue to, invest in technology, invest in, different amounts of innovation to drive that improvement. And that is meant to drive, all aspects of our business, drive productivity, drive better customer experience, and drive smarter decisions. So when you think about our expenses in 2025 coming in below, our original guidance, that is driven by us actually harvesting those benefits, harvesting those gains from, from our investments, and we see the same thing happening in 2026.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Now, in terms of long-term expectations on expense ratio, I think it's tougher to give that guidance. Our aspiration is to always be prudent managers of expenses. So yes, we will always try to actually improve our expense ratio, both through growing our premiums, by actually getting to a larger, more profitable book, and at the same time, getting the right efficiencies from the business. But how those premiums play out and how those expense dollars play out are difficult to forecast beyond 2026. So yes, directionally, you're absolutely correct. And then as we navigate through 2026 and get to 2027, we'll provide updated guidance.

[Bose George, Managing Direxctor at Keefe, Bruyette & Woods]

Okay, great. Thanks. And then just on the reinsurance transactions that you guys did, can you just talk about the attachment and detachment points? And then how is the pricing on that market, you know, just the trend in pricing?

[Dean Mitchell, CFO at Enact Holdings Inc.]

Yeah, Bose, we. So let me start with the pricing, and then I'll go to the nature of the agreement. You know, from a pricing perspective, we're seeing a tremendous amount of demand in the traditional reinsurance market for mortgage credit default risk. That has benefited the terms of our, some of our most recent reinsurance transactions, going all the way back to, you know, the coverage we've secured on both the 2026 book as well as now the two-year forward, 2027 book. So we've typically talked about that in low- to mid-single digits cost of capital. If you go prior to those transactions, we were probably on the higher end of that cost range. In these most recent transactions, we're on the lower end of that continuum from a cost range perspective.

[Dean Mitchell, CFO at Enact Holdings Inc.]

You know, from an attachment and detachment perspective, you know, our objective with our CRT program and, and certainly our CRT transactions is twofold. It's to provide cost-efficient capital relief, and then also, obviously, to protect the balance sheet from a volatility perspective. If we think about that first objective, what that means for our XOLs is we secure coverage inside the PMIERs tier. And so we typically attach around the 3%. It's not always 3% of our risk in force, but it's generally in that ballpark, and then detach within PMIERs, and that's typically... Again, PMIERs on requirements on new business are generally around that 7%. So you can see our transactions evolve through time, but generally, in broad strokes, attachment and detachment are around those, those points that I just gave you, Bose.

[Bose George, Managing Direxctor at Keefe, Bruyette & Woods]

Okay. Great. Thanks.

[Operator]

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Rohit for closing remarks.

[Rohit Gupta, CEO at Enact Holdings Inc.]

Thank you, Tawanda, and thank you, everyone. We appreciate your interest in Enact, and I look forward to seeing many of you this quarter in Florida at UBS's Financial Services Conference on February ninth and at Bank of America's Financial Conference on February tenth. We also plan to attend the RBC Capital Markets Global Financial Institutions Conference in New York on March eleventh. With that, we will wrap up the call. Thank you.

[Operator]

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Daniel Kohl, Head of Investor Relations
• Dean Mitchell, CFO
• Rohit Gupta, CEO

Analysts

• Bose George, Managing Direxctor at Keefe, Bruyette & Woods
• Douglas Harter, Director and Equity Analyst at UBS
• Mihir Bhatia, Stock Analyst and Equity Research at Bank of America Merrill Lynch
• Richard Shane, Analyst at JPMorgan Chase & Co.