Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36157 | ||
Entity Registrant Name | ESSENT GROUP LTD. | ||
Entity Incorporation, State or Country Code | D0 | ||
Entity Address, Address Line One | Clarendon House | ||
Entity Address, Address Line Two | 2 Church Street | ||
Entity Address, City or Town | Hamilton | ||
Entity Address, Postal Zip Code | HM11 | ||
Entity Address, Country | BM | ||
City Area Code | 441 | ||
Local Phone Number | 297-9901 | ||
Title of 12(b) Security | Common Shares, $0.015 par value | ||
Trading Symbol | ESNT | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,976,558,799 | ||
Entity Common Stock, Shares Outstanding | 112,840,615 | ||
Documents Incorporated by Reference | Portions of the registrant's proxy statement for the 2021 Annual General Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2020. | ||
Entity Central Index Key | 0001448893 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Total investments available for sale | $ 4,565,373 | $ 3,350,747 |
Other invested assets | 88,904 | 78,873 |
Total investments | 4,654,277 | 3,429,620 |
Cash | 102,830 | 71,350 |
Accrued investment income | 19,948 | 18,535 |
Accounts receivable | 50,140 | 40,655 |
Deferred policy acquisition costs | 17,005 | 15,705 |
Property and equipment (at cost, less accumulated depreciation of $60,967 in 2020 and $57,639 in 2019) | 15,095 | 17,308 |
Prepaid federal income tax | 302,636 | 261,885 |
Other assets | 40,793 | 18,367 |
Total assets | 5,202,724 | 3,873,425 |
Liabilities | ||
Reserve for losses and LAE | 374,941 | 69,362 |
Unearned premium reserve | 250,436 | 278,887 |
Net deferred tax liability | 305,109 | 249,620 |
Credit facility borrowings (at carrying value, less unamortized deferred costs of $3,280 in 2020 and $763 in 2019) | 321,720 | 224,237 |
Other accrued liabilities | 87,885 | 66,474 |
Total liabilities | 1,340,091 | 888,580 |
Commitments and contingencies (see Note 8) | ||
Stockholders' Equity | ||
Common shares, $0.015 par value: Authorized - 233,333; issued and outstanding - 112,423 shares in 2020 and 98,394 shares in 2019 | 1,686 | 1,476 |
Additional paid-in capital | 1,571,163 | 1,118,655 |
Accumulated other comprehensive income | 138,274 | 56,187 |
Retained earnings | 2,151,510 | 1,808,527 |
Total stockholders' equity | 3,862,633 | 2,984,845 |
Total liabilities and stockholders' equity | 5,202,724 | 3,873,425 |
Fixed maturities | ||
Investments | ||
Total investments available for sale | 3,838,513 | 3,035,385 |
Short-term investments | ||
Investments | ||
Total investments available for sale | $ 726,860 | $ 315,362 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Amortized Cost | $ 4,404,690 | $ 3,282,585 |
Property, Plant and Equipment, Net | ||
Accumulated depreciation | 60,967 | 57,639 |
Credit Facility Borrowings | ||
Unamortized deferred costs | $ 3,280 | $ 763 |
Stockholders' Equity | ||
Common Shares, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common Shares, authorized (in shares) | 233,333 | 233,333 |
Common Shares, issued (in shares) | 112,423 | 98,394 |
Common Shares, outstanding (in shares) | 112,423 | 98,394 |
Fixed maturities | ||
Investments | ||
Amortized Cost | $ 3,677,815 | $ 2,967,225 |
Short-term investments | ||
Investments | ||
Amortized Cost | $ 726,875 | $ 315,360 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Net premiums written | $ 834,113 | $ 760,845 | $ 685,287 |
Decrease (increase) in unearned premiums | 28,451 | 16,580 | (35,795) |
Net premiums earned | 862,564 | 777,425 | 649,492 |
Net investment income | 80,087 | 83,542 | 64,091 |
Realized investment gains, net | 2,697 | 3,229 | 1,318 |
Other income | 9,806 | 3,371 | 4,452 |
Total revenues | 955,154 | 867,567 | 719,353 |
Losses and expenses: | |||
Provision for losses and LAE | 301,293 | 32,986 | 11,575 |
Other underwriting and operating expenses | 154,691 | 165,369 | 150,900 |
Interest expense | 9,074 | 10,151 | 10,179 |
Total losses and expenses | 465,058 | 208,506 | 172,654 |
Income before income taxes | 490,096 | 659,061 | 546,699 |
Income tax expense | 77,055 | 103,348 | 79,336 |
Net income | $ 413,041 | $ 555,713 | $ 467,363 |
Earnings per share: | |||
Basic (in dollars per share) | $ 3.89 | $ 5.68 | $ 4.80 |
Diluted (in dollars per share) | $ 3.88 | $ 5.66 | $ 4.77 |
Weighted average shares outstanding: | |||
Basic (in shares) | 106,098 | 97,762 | 97,403 |
Diluted (in shares) | 106,376 | 98,227 | 97,974 |
Net income | $ 413,041 | $ 555,713 | $ 467,363 |
Other comprehensive income (loss): | |||
Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of $16,836 in 2020, $17,497 in 2019 and $(5,686) in 2018 | 82,087 | 85,180 | (25,741) |
Total other comprehensive income (loss) | 82,087 | 85,180 | (25,741) |
Comprehensive income | $ 495,128 | $ 640,893 | $ 441,622 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Stockholders equity, beginning of period at Dec. 31, 2017 | $ 1,476 | $ 1,127,137 | $ (3,252) | $ 815,075 | $ 0 | |
Changes in Stockholders' Equity | ||||||
Issuance of management incentive shares | 6 | (6) | ||||
Cancellation of treasury stock | (10) | (31,404) | 31,414 | |||
Stock-based compensation expense | 15,073 | |||||
Other comprehensive income (loss) | $ (25,741) | (25,741) | ||||
Net income | 467,363 | 467,363 | ||||
Treasury stock acquired | (31,414) | |||||
Stockholders equity, end of period at Dec. 31, 2018 | 2,365,717 | 1,472 | 1,110,800 | (28,993) | 1,282,438 | 0 |
Changes in Stockholders' Equity | ||||||
Issuance of management incentive shares | 7 | (7) | ||||
Cancellation of treasury stock | (3) | (9,002) | 9,005 | |||
Dividends and dividend equivalents declared | 276 | (29,624) | ||||
Stock-based compensation expense | 16,588 | |||||
Other comprehensive income (loss) | 85,180 | 85,180 | ||||
Net income | 555,713 | 555,713 | ||||
Treasury stock acquired | (9,005) | |||||
Stockholders equity, end of period at Dec. 31, 2019 | 2,984,845 | 1,476 | 1,118,655 | 56,187 | 1,808,527 | 0 |
Changes in Stockholders' Equity | ||||||
Issuance of common shares | 207 | 439,755 | ||||
Issuance of management incentive shares | 5 | (5) | ||||
Cancellation of treasury stock | (2) | (6,352) | 6,354 | |||
Dividends and dividend equivalents declared | 648 | (70,058) | ||||
Stock-based compensation expense | 18,462 | |||||
Other comprehensive income (loss) | 82,087 | 82,087 | ||||
Net income | 413,041 | 413,041 | ||||
Treasury stock acquired | (6,354) | |||||
Stockholders equity, end of period at Dec. 31, 2020 | $ 3,862,633 | $ 1,686 | $ 1,571,163 | $ 138,274 | $ 2,151,510 | $ 0 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Common stock, issuance cost | $ 18,888 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities | |||
Net income | $ 413,041 | $ 555,713 | $ 467,363 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Gain on the sale of investments, net | (2,697) | (3,229) | (1,318) |
Equity in net loss (income) of other invested assets | 215 | 199 | (111) |
Distribution of income from other invested assets | 1,277 | 648 | 211 |
Depreciation and amortization | 3,328 | 3,769 | 3,404 |
Stock-based compensation expense | 18,462 | 16,588 | 15,073 |
Amortization of premium on investment securities | 23,393 | 15,738 | 14,220 |
Deferred income tax provision | 38,653 | 59,481 | 50,692 |
Change in: | |||
Accrued investment income | (1,413) | (908) | (4,820) |
Accounts receivable | (8,848) | (3,767) | (7,118) |
Deferred policy acquisition costs | (1,300) | 344 | (695) |
Prepaid federal income tax | (40,751) | (59,500) | 49,772 |
Other assets | (16,840) | (2,921) | (5,060) |
Reserve for losses and LAE | 305,579 | 19,898 | 2,614 |
Unearned premium reserve | (28,451) | (16,580) | 35,795 |
Other accrued liabilities | 24,283 | 4,375 | 5,299 |
Net cash provided by operating activities | 727,931 | 589,848 | 625,321 |
Investing Activities | |||
Net change in short-term investments | (411,498) | (160,962) | 158,294 |
Purchase of investments available for sale | (1,575,082) | (1,044,964) | (1,126,032) |
Proceeds from maturity of investments available for sale | 262,321 | 88,025 | 114,651 |
Proceeds from sales of investments available for sale | 577,409 | 623,771 | 340,780 |
Purchase of other invested assets | (17,012) | (49,789) | (30,860) |
Return of investment from other invested assets | 11,891 | 2,252 | 316 |
Purchase of property and equipment | (2,446) | (3,409) | (4,054) |
Net cash used in investing activities | (1,154,417) | (545,076) | (546,905) |
Financing Activities | |||
Issuance of common shares, net of costs | 439,962 | 0 | 0 |
Credit facility borrowings | 200,000 | 0 | 15,000 |
Credit facility repayments | (100,000) | 0 | (40,000) |
Treasury stock acquired | (6,354) | (9,005) | (31,414) |
Payment of issuance costs for credit facility | (6,232) | (15) | (580) |
Dividends paid | (69,410) | (29,348) | 0 |
Net cash provided by (used in) financing activities | 457,966 | (38,368) | (56,994) |
Net increase in cash | 31,480 | 6,404 | 21,422 |
Cash at beginning of year | 71,350 | 64,946 | 43,524 |
Cash at end of year | 102,830 | 71,350 | 64,946 |
Supplemental Disclosure of Cash Flow Information | |||
Income tax payments | (38,705) | (41,505) | (29,275) |
Interest payments | (8,263) | (9,863) | (9,451) |
Noncash Transactions | |||
Repayment of borrowings with term loan proceeds | (325,000) | 0 | (100,000) |
Operating lease liabilities arising from obtaining right-of-use assets | $ 805 | $ 1,334 | $ 0 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Essent Group Ltd. (“Essent Group”) is a Bermuda-based holding company, which, through its wholly-owned subsidiaries, offers private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Mortgage insurance facilitates the sale of low down payment (generally less than 20%) mortgage loans into the secondary mortgage market, primarily to two government-sponsored enterprises ("GSEs"), Fannie Mae and Freddie Mac. The primary mortgage insurance operations are conducted through Essent Guaranty, Inc. ("Essent Guaranty"), which is domiciled in the state of Pennsylvania. Essent Guaranty is headquartered in Radnor, Pennsylvania and maintains operations centers in Winston-Salem, North Carolina and Irvine, California. Essent Guaranty is approved as a qualified mortgage insurer by the GSEs and is licensed to write mortgage insurance in all 50 states and the District of Columbia. Essent Guaranty reinsures 25% of new insurance written to Essent Reinsurance Ltd. (“Essent Re”), an affiliated Bermuda domiciled Class 3A Insurer licensed pursuant to Section 4 of the Bermuda Insurance Act 1978 that provides insurance and reinsurance coverage of mortgage credit risk. Essent Re also provides insurance and reinsurance to Freddie Mac and Fannie Mae. In 2016, Essent Re formed Essent Agency (Bermuda) Ltd., a wholly-owned subsidiary, which provides underwriting consulting services to third-party reinsurers. In accordance with certain state law requirements, Essent Guaranty also reinsures that portion of the risk that is in excess of 25% of the mortgage balance with respect to any loan insured prior to April 1, 2019, after consideration of other reinsurance, to Essent Guaranty of PA, Inc. (“Essent PA”), an affiliate domiciled in the state of Pennsylvania. In addition to offering mortgage insurance, we provide contract underwriting services on a limited basis through CUW Solutions, LLC ("CUW Solutions"), a Delaware limited liability company, that provides, among other things, mortgage contract underwriting services to lenders and mortgage insurance underwriting services to affiliates. CUW Solutions is headquartered in Radnor, Pennsylvania and it maintains operations centers in Winston-Salem, North Carolina and Irvine, California that are subleased from Essent Guaranty. The Company operates as a single segment for reporting purposes as substantially all business operations, assets and liabilities relate to the private mortgage insurance business and management reviews operating results for the Company as a whole to make operating decisions and assess performance. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of Essent Group and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Investments Our fixed maturity and short-term investments are classified as available for sale as we may sell securities from time to time to provide liquidity and in response to changes in the market. Debt securities classified as available for sale are reported at fair value with unrealized gains and losses on these securities reported in other comprehensive income, net of deferred income taxes. See Note 15 for a description of the valuation methods for investments available for sale. We monitor our fixed maturities for unrealized losses that appear to be other-than-temporary. A fixed maturity security is considered to be other-than-temporarily impaired when the security's fair value is less than its amortized cost basis and 1) we intend to sell the security, 2) it is more likely than not that we will be required to sell the security before recovery of the security's amortized cost basis, or 3) we believe we will be unable to recover the entire amortized cost basis of the security (i.e., a credit loss has occurred). When we determine that a credit loss has been incurred, but we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before recovery of the security's amortized cost basis, the portion of the other-than-temporary impairment that is credit related is recorded as a realized loss in the consolidated statements of comprehensive income, and the portion of the other-than-temporary impairment that is not credit related is included in other comprehensive income. For those fixed maturities for which an other-than-temporary impairment has occurred, we adjust the amortized cost basis of the security and record a realized loss in the consolidated statements of comprehensive income. We recognize purchase premiums and discounts in interest income using the interest method over the securities' estimated holding periods, until maturity, or call date, if applicable. Gains and losses on the sales of securities are recorded on the trade date and are determined using the specific identification method. Short-term investments are defined as short-term, highly liquid investments, both readily convertible to cash and having maturities at acquisition of twelve months or less. Other invested assets are comprised of limited partnership interests which are accounted for under the equity method of accounting with changes in value reported in other income. In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the partnership. We have elected to classify distributions received from these investments using the cumulative earnings approach. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. Long-Lived Assets Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance are charged to expense as incurred. Estimated useful lives are 5 years for furniture and fixtures and 2 to 3 years for equipment, computer hardware and purchased software. Certain costs associated with the acquisition or development of internal-use software are capitalized. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software's expected useful life, which is generally 3 years. We amortize leasehold improvements over the shorter of the lives of the leases or estimated service lives of the leasehold improvements. The balances by type were as follows at December 31: 2020 2019 (In thousands) Cost Accumulated Cost Accumulated Furniture and fixtures $ 2,220 $ (2,068) $ 2,148 $ (2,017) Office equipment 848 (772) 848 (700) Computer hardware 10,282 (8,987) 9,764 (7,728) Purchased software 38,434 (37,404) 37,909 (36,716) Costs of internal-use software 10,783 (8,959) 9,595 (8,185) Leasehold improvements 4,787 (2,777) 4,644 (2,293) Total $ 67,354 $ (60,967) $ 64,908 $ (57,639) Deferred Policy Acquisition Costs We defer certain personnel costs and premium tax expense directly related to the successful acquisition of new insurance policies and amortize these costs over the period the related estimated gross profits are recognized in order to match costs and revenues. We do not defer any underwriting costs associated with our contract underwriting services. Costs related to the acquisition of mortgage insurance business are initially deferred and reported as deferred policy acquisition costs. Consistent with industry accounting practice, amortization of these costs for each underwriting year book of business is recognized in proportion to estimated gross profits. Estimated gross profits are composed of earned premium, interest income, losses and loss adjustment expenses. The deferred costs are adjusted as appropriate for policy cancellations to be consistent with our revenue recognition policy. We estimate the rate of amortization to reflect actual experience and any changes to persistency or loss development. Deferred policy acquisition costs are reviewed periodically to determine that they do not exceed recoverable amounts, after considering investment income. Policy acquisition costs deferred were $10.1 million, $7.8 million and $7.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. Amortization of deferred policy acquisition costs totaled $8.8 million, $8.1 million and $6.7 million for the years ended December 31, 2020, 2019 and 2018, respectively, and was included in other underwriting and operating expenses on the consolidated statements of comprehensive income. Insurance Premium Revenue Recognition Mortgage guaranty insurance policies are contracts that are generally non-cancelable by the insurer, are renewable at a fixed price, and provide for payment of premium on a monthly, annual or single basis. Upon renewal, we are not able to re-underwrite or re-price our policies. Consistent with industry accounting practices, premiums written on a monthly basis are earned as coverage is provided. Monthly policies accounted for 84% of earned premium in 2020. Premiums written on an annual basis are amortized on a pro rata basis over the year of coverage. Primary mortgage insurance written on policies covering more than one year are referred to as single premium policies. A portion of the revenue from single premium policies is recognized in earned premium in the current period, and the remaining portion is deferred as unearned premium and earned over the expected life of the policy. If single premium policies related to insured loans are cancelled due to repayment by the borrower, and the premium is non-refundable, then the remaining unearned premium related to each cancelled policy is recognized as earned premium upon notification of the cancellation. The Company recorded $88.9 million and $42.5 million of earned premium related to policy cancellations for the years ended December 31, 2020 and 2019, respectively. Unearned premium represents the portion of premium written that is applicable to the estimated unexpired risk of insured loans. Rates used to determine the earning of single premium policies are estimates based on an analysis of the expiration of risk. Reserve for Losses and Loss Adjustment Expenses We establish reserves for losses based on our best estimate of ultimate claim costs for defaulted loans using the general principles contained in ASC No. 944, in accordance with industry practice. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loans are classified as in default when the borrower has missed two consecutive payments. Once we are notified that a borrower has defaulted, we will consider internal and third-party information and models, including the status of the loan as reported by its servicer and the type of loan product to determine the likelihood that a default will reach claim status. In addition, we will project the amount that we will pay if a default becomes a claim (referred to as "claim severity"). Based on this information, at each reporting date we determine our best estimate of loss reserves at a given point in time. Included in loss reserves are reserves for incurred but not reported ("IBNR") claims. IBNR reserves represent our estimated unpaid losses on loans that are in default, but have not yet been reported to us as delinquent by our customers. We will also establish reserves for associated loss adjustment expenses, consisting of the estimated cost of the claims administration process, including legal and other fees and expenses associated with administering the claims process. Establishing reserves is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Our estimates of claim rates and claim sizes will be strongly influenced by prevailing economic conditions, such as the overall state of the economy, current rates or trends in unemployment, changes in housing values and/or interest rates, and our best judgments as to the future values or trends of these macroeconomic factors. Losses incurred are also generally affected by the characteristics of our insured loans, such as the loan amount, loan-to-value ratio, the percentage of coverage on the insured loan and the credit quality of the borrower. Premium Deficiency Reserve We are required to establish a premium deficiency reserve if the net present value of the expected future losses and expenses for a particular group of policies exceeds the net present value of expected future premium, anticipated investment income and existing reserves for that specified group of policies. We reassess our expectations for premium, losses and expenses of our mortgage insurance business periodically and update our premium deficiency analysis accordingly. As of December 31, 2020 and 2019, we concluded that no premium deficiency reserve was required to be recorded in the accompanying consolidated financial statements. Derivative Instruments Derivative instruments, including embedded derivative instruments, are recognized at fair value in the consolidated balance sheets. The amount of monthly reinsurance premiums ceded under our reinsurance contracts will fluctuate due to changes in one-month LIBOR and changes in money market rates. As the reinsurance premium will vary based on changes in these rates, we concluded that these reinsurance agreements contain embedded derivatives that are accounted for separately like freestanding derivatives. Stock-Based Compensation We measure the cost of employee services received in exchange for awards of equity instruments at the grant date of the award using a fair value based method. Prior to our initial public offering, we estimated the fair value of each nonvested share grant on the date of grant based on management's best estimate using methods further described in Note 10 of our consolidated financial statements. Subsequent to our initial public offering, fair value is determined on the date of grant based on quoted market prices. We recognize compensation expense on nonvested shares over the vesting period of the award. Excess tax benefits and tax deficiencies associated with share-based payments are recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period. Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability (balance sheet) method. Under this method, we determine the net deferred tax asset or liability based on the tax effects of the temporary differences between the book and tax bases of the various assets and liabilities and give current recognition to changes in tax rates and laws. Changes in tax laws, rates, regulations and policies, or the final determination of tax audits or examinations, could materially affect our tax estimates. We evaluate the realizability of the deferred tax asset and recognize a valuation allowance if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. When evaluating the realizability of the deferred tax asset, we consider estimates of expected future taxable income, existing and projected book/tax differences, carryback and carryforward periods, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires management to forecast changes in the mortgage market, as well as the related impact on mortgage insurance, and the competitive and general economic environment in future periods. Changes in the estimate of deferred tax asset realizability, if applicable, are included in income tax expense on the consolidated statements of comprehensive income. ASC No. 740 provides a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In accordance with ASC No. 740, before a tax benefit can be recognized, a tax position is evaluated using a threshold that it is more likely than not that the tax position will be sustained upon examination. When evaluating the more-likely-than-not recognition threshold, ASC No. 740 provides that a company should presume the tax position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. If the tax position meets the more-likely-than-not recognition threshold, it is initially and subsequently measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As described in Note 12, we purchase non-interest-bearing United States Mortgage Guaranty Tax and Loss Bonds ("T&L Bonds") issued by the Treasury Department. These assets are carried at cost and are reported as prepaid federal income tax on the consolidated balance sheets. It is our policy to classify interest and penalties as income tax expense and to use the aggregate portfolio approach to release income tax effects from accumulated other comprehensive income. Earnings per Share Basic earnings per common share amounts are calculated based on income available to common stockholders and the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share amounts are calculated based on income available to common stockholders and the weighted average number of common and potential common shares outstanding during the reporting period. Potential common shares, composed of the incremental common shares issuable upon vesting of unvested common shares and common share units, are included in the earnings per share calculation to the extent that they are dilutive. Recently Issued Accounting Standards Accounting Standards Adopted During 2020 In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) . This update is intended to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected through the use of an allowance for credit losses. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance rather than as a write-down of the amortized cost of the securities. The accounting for insurance losses and loss adjustment expenses ("LAE") are not within the scope of this ASU. The provisions of this update were effective for annual and interim periods beginning after December 15, 2019 and we adopted this standard on January 1, 2020 using the modified retrospective approach. The adoption of this ASU did not have a material effect on the Company's consolidated operating results or financial position. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . The amendments in this update modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The provisions of this update were effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for the removed disclosures. We adopted this standard on January 1, 2020. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements. Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments in this update provide temporary optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. It provides optional expedients and exceptions for applying generally accepted accounting principles to contract, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. The adoption of, and future elections under, this ASU are not expected to have a material impact on our consolidated financial statements as the ASU will ease, if warranted, the requirements for accounting for the future effects of the rate reform. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts and other transactions. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments available for sale consist of the following: December 31, 2020 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 259,378 $ 9,088 $ (22) $ 268,444 U.S. agency securities 17,930 155 — 18,085 U.S. agency mortgage-backed securities 963,670 33,205 (970) 995,905 Municipal debt securities (1) 513,870 37,662 (15) 551,517 Non-U.S. government securities 56,045 5,562 — 61,607 Corporate debt securities (2) 1,070,027 56,864 (379) 1,126,512 Residential and commercial mortgage securities 391,921 18,641 (1,280) 409,282 Asset-backed securities 452,527 3,246 (1,056) 454,717 Money market funds 679,322 — (18) 679,304 Total investments available for sale $ 4,404,690 $ 164,423 $ (3,740) $ 4,565,373 December 31, 2019 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 239,087 $ 3,526 $ (407) $ 242,206 U.S. agency securities 33,620 36 (51) 33,605 U.S. agency mortgage-backed securities 836,710 13,956 (2,332) 848,334 Municipal debt securities (1) 339,511 22,245 (118) 361,638 Non-U.S. government securities 52,230 2,812 (47) 54,995 Corporate debt securities (2) 856,638 24,255 (592) 880,301 Residential and commercial mortgage securities 282,840 6,542 (1,101) 288,281 Asset-backed securities 326,589 857 (1,421) 326,025 Money market funds 315,360 2 — 315,362 Total investments available for sale $ 3,282,585 $ 74,231 $ (6,069) $ 3,350,747 _______________________________________________________________________________ December 31, December 31, (1) The following table summarizes municipal debt securities as of : 2020 2019 Special revenue bonds 76.8 % 74.5 % General obligation bonds 20.3 21.3 Certificate of participation bonds 2.3 3.4 Tax allocation bonds 0.6 0.8 Total 100.0 % 100.0 % December 31, December 31, (2) The following table summarizes corporate debt securities as of : 2020 2019 Financial 34.9 % 34.4 % Consumer, non-cyclical 19.1 20.1 Communications 9.3 10.3 Energy 8.2 8.3 Consumer, cyclical 8.0 7.6 Technology 6.1 4.8 Utilities 5.9 6.2 Industrial 5.3 4.2 Basic materials 3.1 4.1 Government 0.1 — Total 100.0 % 100.0 % The amortized cost and fair value of investments available for sale at December 31, 2020, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. (In thousands) Amortized Fair U.S. Treasury securities: Due in 1 year $ 78,956 $ 79,335 Due after 1 but within 5 years 130,312 134,802 Due after 5 but within 10 years 49,125 53,165 Due after 10 years 985 1,142 Subtotal 259,378 268,444 U.S. agency securities: Due in 1 year 8,906 8,958 Due after 1 but within 5 years 9,024 9,127 Subtotal 17,930 18,085 Municipal debt securities: Due in 1 year 6,881 6,892 Due after 1 but within 5 years 91,122 95,567 Due after 5 but within 10 years 235,030 254,387 Due after 10 years 180,837 194,671 Subtotal 513,870 551,517 Non-U.S. government securities: Due in 1 year — — Due after 1 but within 5 years 22,710 24,257 Due after 5 but within 10 years 24,246 27,680 Due after 10 years 9,089 9,670 Subtotal 56,045 61,607 Corporate debt securities: Due in 1 year 148,292 149,617 Due after 1 but within 5 years 576,987 602,286 Due after 5 but within 10 years 322,649 350,632 Due after 10 years 22,099 23,977 Subtotal 1,070,027 1,126,512 U.S. agency mortgage-backed securities 963,670 995,905 Residential and commercial mortgage securities 391,921 409,282 Asset-backed securities 452,527 454,717 Money market funds 679,322 679,304 Total investments available for sale $ 4,404,690 $ 4,565,373 Gross gains and losses realized on the sale of investments available for sale were as follows: Year Ended December 31, (In thousands) 2020 2019 2018 Realized gross gains $ 5,608 $ 5,238 $ 2,201 Realized gross losses 2,482 1,746 883 The fair value of investments available for sale in an unrealized loss position and the related unrealized losses for which no allowance for credit loss has been recorded were as follows: Less than 12 months 12 months or more Total December 31, 2020 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 28,776 $ (22) $ — $ — $ 28,776 $ (22) U.S. agency mortgage-backed securities 152,671 (924) 3,007 (46) 155,678 (970) Municipal debt securities 3,838 (15) — — 3,838 (15) Corporate debt securities 141,803 (379) — — 141,803 (379) Residential and commercial mortgage securities 63,203 (777) 9,516 (503) 72,719 (1,280) Asset-backed securities 124,165 (483) 65,897 (573) 190,062 (1,056) Money market funds 99,995 (18) — — 99,995 (18) Total $ 614,451 $ (2,618) $ 78,420 $ (1,122) $ 692,871 $ (3,740) Less than 12 months 12 months or more Total December 31, 2019 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 29,013 $ (331) $ 42,981 $ (76) $ 71,994 $ (407) U.S. agency securities — — 25,605 (51) 25,605 (51) U.S. agency mortgage-backed securities 101,684 (1,042) 113,866 (1,290) 215,550 (2,332) Municipal debt securities 10,651 (112) 624 (6) 11,275 (118) Non-U.S. government securities 9,664 (47) — — 9,664 (47) Corporate debt securities 83,013 (576) 14,531 (16) 97,544 (592) Residential and commercial mortgage securities 59,341 (1,059) 3,442 (42) 62,783 (1,101) Asset-backed securities 78,813 (202) 109,536 (1,219) 188,349 (1,421) Total $ 372,179 $ (3,369) $ 310,585 $ (2,700) $ 682,764 $ (6,069) At December 31, 2020 and 2019, we held 363 and 365 individual investment securities, respectively, that were in an unrealized loss position. We assess our intent to sell these securities and whether we will be required to sell these securities before the recovery of their amortized cost basis when determining whether to record an impairment on the securities in an unrealized loss position. In assessing whether the decline in the fair value at December 31, 2020 of any of these securities resulted from a credit loss or other factors, we made inquiries of our investment managers to determine that each issuer was current on its scheduled interest and principal payments. We reviewed the credit rating of these securities noting that over 98% of the securities at December 31, 2020 had investment-grade ratings. We concluded that gross unrealized losses noted above are principally associated with the changes in credit spreads subsequent to purchase rather than due to credit impairment. We recorded impairments of $0.4 million in the year ended December 31, 2020 and other-than-temporary impairments of $0.3 million in the year ended December 31, 2019 on securities in an unrealized loss position. The impairments resulted from our intent to sell these securities subsequent to the reporting dates. There were no other-than-temporary impairments in the year ended December 31, 2018. The Company's other invested assets at December 31, 2020 and December 31, 2019 totaled $88.9 million and $78.9 million, respectively. Other invested assets are comprised of limited partnership interests which are accounted for under the equity method of accounting with changes in value reported in other income. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $9.7 million at December 31, 2020 and $9.4 million at December 31, 2019. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. The fair value of the investments on deposit in these trusts was $1.1 billion at December 31, 2020 and $805.5 million at December 31, 2019. Essent Guaranty is required to maintain assets on deposit in connection with its fully collateralized reinsurance agreements (see Note 5). The fair value of the assets on deposit was $8.5 million at December 31, 2020 and $6.4 million at December 31, 2019. Essent Guaranty is also required to maintain assets on deposit for the benefit of the sponsor of a fixed income investment commitment. The fair value of the assets on deposit was $12.0 million at December 31, 2020 and $6.4 million at December 31, 2019. Net investment income consists of: Year Ended December 31, (In thousands) 2020 2019 2018 Fixed maturities $ 83,313 $ 82,194 $ 63,053 Short-term investments 1,669 5,049 3,873 Gross investment income 84,982 87,243 66,926 Investment expenses (4,895) (3,701) (2,835) Net investment income $ 80,087 $ 83,542 $ 64,091 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consists of the following at December 31: (In thousands) 2020 2019 Premiums receivable $ 46,974 $ 39,084 Other receivables 3,166 1,571 Total accounts receivable 50,140 40,655 Less: Allowance for doubtful accounts — — Accounts receivable, net $ 50,140 $ 40,655 Premiums receivable consists of premiums due on our mortgage insurance policies. If mortgage insurance premiums are unpaid for more than 90 days, the receivable is written off against earned premium and the related insurance policy is cancelled. For all periods presented, no provision or allowance for doubtful accounts was required. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance In the ordinary course of business, our insurance subsidiaries may use reinsurance to provide protection against adverse loss experience and to expand our capital sources. Reinsurance recoverables are recorded as assets and included in other assets on our consolidated balance sheets, predicated on a reinsurer's ability to meet their obligations under the reinsurance agreements. If the reinsurers are unable to satisfy their obligations under the agreements, our insurance subsidiaries would be liable for such defaulted amounts. The effect of reinsurance on net premiums written and earned is as follows: Year Ended December 31, (In thousands) 2020 2019 2018 Net premiums written: Direct $ 922,851 $ 796,344 $ 696,055 Ceded (1) (88,738) (35,499) (10,768) Net premiums written $ 834,113 $ 760,845 $ 685,287 Net premiums earned: Direct $ 951,302 $ 812,924 $ 660,260 Ceded (1) (88,738) (35,499) (10,768) Net premiums earned $ 862,564 $ 777,425 $ 649,492 _______________________________________________________________________________ (1) Net of profit commission. Quota Share Reinsurance Effective September 1, 2019, Essent Guaranty entered into a quota share reinsurance agreement with a panel of third-party reinsurers (the "QSR Agreement"). Each of the third-party reinsurers has an insurer financial strength rating of A or better by S&P Global Ratings, A.M. Best or both. Under the QSR Agreement, Essent Guaranty will cede premiums earned related to 40% of risk on eligible single premium policies and 20% of risk on all other eligible policies written September 1, 2019 through December 31, 2020, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a 20% ceding commission, and a profit commission of up to 60% that varies directly and inversely with ceded claims. The QSR Agreement is scheduled to terminate on December 31, 2030. Essent Guaranty has certain termination rights under the QSR Agreement, including the option to terminate the QSR Agreement with no termination fee on December 31, 2021, and the option, subject to a termination fee, to terminate the QSR Agreement on December 31, 2022, or annually thereafter. Should Essent Guaranty not exercise its option to terminate the QSR Agreement on December 31, 2021, the maximum profit commission that Essent Guaranty could earn would increase to 63% in 2022 and thereafter. RIF ceded under the QSR Agreement was $6.3 billion as of December 31, 2020. Excess of Loss Reinsurance Essent Guaranty has entered into fully collateralized reinsurance agreements ("Radnor Re Transactions") with unaffiliated special purpose insurers domiciled in Bermuda. For the reinsurance coverage periods, Essent Guaranty and its affiliates retain the first layer of the respective aggregate losses, and a Radnor Re special purpose insurer will then provide second layer coverage up to the outstanding reinsurance coverage amount. Essent Guaranty and its affiliates retain losses in excess of the outstanding reinsurance coverage amount. The reinsurance premium due to each Radnor Re special purpose insurer is calculated by multiplying the outstanding reinsurance coverage amount at the beginning of a period by a coupon rate, which is the sum of one-month LIBOR plus a risk margin, and then subtracting actual investment income collected on the assets in the related reinsurance trust during that period. The aggregate excess of loss reinsurance coverage decreases over a ten-year period as the underlying covered mortgages amortize. Essent Guaranty has rights to terminate the Radnor Re Transactions. The Radnor Re entities collateralized the coverage by issuing mortgage insurance-linked notes ("ILNs") in an aggregate amount equal to the initial coverage to unaffiliated investors. The notes have ten-year legal maturities and are non-recourse to any assets of Essent Guaranty or its affiliates. The proceeds of the notes were deposited into reinsurance trusts for the benefit of Essent Guaranty and will be the source of reinsurance claim payments to Essent Guaranty and principal repayments on the ILNs. Essent Guaranty has also entered into reinsurance agreements with panels of reinsurers that provide aggregate excess of loss coverage immediately above or pari-passu to the coverage provided by the Radnor Re Transactions. The aggregate excess of loss reinsurance coverage decreases over a ten-year period as the underlying covered mortgages amortize. Essent Guaranty has rights to terminate these reinsurance agreements. The following tables summarizes Essent Guaranty's excess of loss reinsurance agreements as of December 31, 2020: Vintage Year Reinsurer Effective Date Optional Termination Date 2015 & 2016 Radnor Re 2019-2 Ltd. June 20, 2019 June 25, 2024 2017 Radnor Re 2018-1 Ltd. March 22, 2018 March 25, 2023 (1) 2017 Panel of Reinsurers November 1, 2018 October 1, 2023 (2) 2018 Radnor Re 2019-1 Ltd. February 28, 2019 February 25, 2026 2018 Panel of Reinsurers February 28, 2019 February 25, 2026 2019 Radnor Re 2020-1 Ltd. January 30, 2020 January 25, 2027 2019 Panel of Reinsurers January 30, 2020 January 25, 2027 2019 & 2020 Radnor Re 2020-2 Ltd. October 8, 2020 October 25, 2027 _______________________________________________________________________________ (1) If the reinsurance agreement is not terminated at the optional termination date, the risk margin component of the reinsurance premium increases by 50%. (2) If the reinsurance agreement is not terminated at the optional termination date, the reinsurance premium increases by 50%. The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions as of December 31, 2020: (In thousands) Remaining Vintage Year Remaining Remaining ILN Other Reinsurance Total Remaining 2015 & 2016 $ 16,329,165 $ 4,411,094 $ 216,480 $ — $ 216,480 $ 207,787 2017 15,856,384 4,052,481 242,123 165,167 (5) 407,290 218,838 2018 18,295,450 4,646,734 325,537 76,144 (6) 401,681 251,262 2019 (3) 22,137,416 5,643,954 495,889 55,102 (7) 550,991 215,509 2019 & 2020 (4) 48,570,459 12,141,563 399,159 — 399,159 465,690 Total $ 121,188,874 $ 30,895,826 $ 1,679,188 $ 296,413 $ 1,975,601 $ 1,359,086 _______________________________________________________________________________ (3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019. (4) Reinsurance coverage on new insurance written from September 1, 2019 through July 31, 2020. (5) Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd. (6) Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd. (7) Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd. Based on the level of delinquencies reported to us, the ILN transactions entered into prior to March 31, 2020 became subject to a "trigger event" as of June 25, 2020. The amortization of principal of the notes issued by the unaffiliated special purpose insurers in connection with those ILN transactions is suspended and the aggregate excess of loss reinsurance coverage will not amortize during the continuation of a trigger event. The amount of monthly reinsurance premiums ceded to the Radnor Re entities will fluctuate due to changes in one-month LIBOR and changes in money market rates that affect investment income collected on the assets in the reinsurance trusts. As the reinsurance premium will vary based on changes in these rates, we concluded that the Radnor Re Transactions contain embedded derivatives that will be accounted for separately like freestanding derivatives. In connection with the Radnor Re Transactions, we concluded that the risk transfer requirements for reinsurance accounting were met as each Radnor Re entity is assuming significant insurance risk and a reasonable possibility of a significant loss. In addition, we assessed whether each Radnor Re entity was a variable interest entity ("VIE") and the appropriate accounting for the Radnor Re entities if they were VIEs. A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. A VIE is consolidated by its primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of the decision-making ability and ability to influence activities that significantly affect the economic performance of the VIE. We concluded that the Radnor Re entities are VIEs. However, given that Essent Guaranty (1) does not have the unilateral power to direct the activities that most significantly affect their economic performance and (2) does not have the obligation to absorb losses or the right to receive benefits that could be potentially significant to these entities, the Radnor Re entities are not consolidated in these financial statements. The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivatives, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trusts, each as of December 31, 2020: Maximum Exposure to Loss (In thousands) Total VIE Assets On - Balance Sheet Off - Balance Sheet Total Radnor Re 2018-1 Ltd. $ 242,123 $ 462 $ 32 $ 494 Radnor Re 2019-1 Ltd. 325,537 (2,071) 56 (2,015) Radnor Re 2019-2 Ltd. 216,480 (1,509) 26 (1,483) Radnor Re 2020-1 Ltd. 495,889 (1,046) 123 (923) Radnor Re 2020-2 Ltd. 399,159 (181) 109 (72) Total $ 1,679,188 $ (4,345) $ 346 $ (3,999) The assets of Radnor Re are the source of reinsurance claim payments to Essent Guaranty and provide capital relief under the PMIERs financial strength requirements (see Note 16). A decline in the assets available to pay claims would reduce the capital relief available to Essent Guaranty. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses ("LAE") for the years ended December 31: ($ in thousands) 2020 2019 2018 Reserve for losses and LAE at beginning of year $ 69,362 $ 49,464 $ 46,850 Less: Reinsurance recoverables 71 — — Net reserve for losses and LAE at beginning of year 69,291 49,464 46,850 Add provision for losses and LAE, net of reinsurance, occurring in: Current year 317,516 50,562 36,438 Prior years (16,223) (17,576) (24,863) Net incurred losses and LAE during the current year 301,293 32,986 11,575 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current year 1,018 1,288 1,310 Prior years 13,686 11,871 7,651 Net loss and LAE payments during the current year 14,704 13,159 8,961 Net reserve for losses and LAE at end of year 355,880 69,291 49,464 Plus: Reinsurance recoverables 19,061 71 — Reserve for losses and LAE at end of year $ 374,941 $ 69,362 $ 49,464 Loans in default at end of year 31,469 5,947 4,024 For the year ended December 31, 2020, $13.7 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $16.2 million favorable prior year development during the year ended December 31, 2020. Reserves remaining as of December 31, 2020 for prior years are $39.4 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the year ended December 31, 2019, $11.9 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $17.6 million favorable prior year development during the year ended December 31, 2019. Reserves remaining as of December 31, 2019 for prior years were $20.0 million as a result of re-estimation of unpaid losses and loss adjustment expenses. In both periods, the favorable prior years' loss development was the result of a re-estimation of amounts ultimately to be paid on prior year defaults in the default inventory, including the impact of previously identified defaults that cured. Original estimates are increased or decreased as additional information becomes known regarding individual claims. Due to business restrictions, stay-at-home orders and travel restrictions initially implemented in March 2020 as a result of COVID-19, unemployment in the United States increased significantly in the second quarter of 2020 and remained elevated at December 31, 2020. As unemployment is one of the most common reasons for borrowers to default on their mortgage, the increase in unemployment has increased the number of delinquencies on the mortgages that we insure and has the potential to increase claim frequencies on defaults. As of December 31, 2020, insured loans in default totaled 31,469 and included 28,922 defaults classified as COVID-19 defaults. For borrowers that have the ability to begin to pay their mortgage at the end of the forbearance period, we expect that mortgage servicers will work with them to modify their loans at which time the mortgage will be removed from delinquency status. We believe that the forbearance process could have a favorable effect on the frequency of claims that we ultimately pay. Based on the forbearance programs in place and the credit characteristics of the COVID-19 defaulted loans, we expect the ultimate number of COVID-19-related defaults that result in claims will be less than our historical default-to-claim experience. Accordingly, we recorded a reserve equal to approximately 7% of the risk in force for the COVID-19 default notices received in April 2020 through September 2020. The credit characteristics of defaults reported in October 2020 through December 2020 have trended towards those of the pre-pandemic periods and we have observed the normalization of other default patterns during this period. In addition, we observed a normalization during the fourth quarter of 2020 of the proportion of unemployment claims related to permanent layoffs as compared to a higher proportion of temporary layoffs during the second and third quarters of 2020. We believe that while defaults in October 2020 through December 2020 were impacted by the pandemic’s effect on the economy, the underlying credit performance of these defaults may not be the same as the expected performance for default notices received in April 2020 through September 2020 that occurred following the onset of the pandemic and these defaults are more likely to transition like pre-pandemic defaults. Accordingly, although these defaults are classified as COVID-19 defaults, we established reserves for defaults reported in October 2020 through December 2020 using our normal reserve methodology. The reserve for losses and LAE on COVID-19 defaults was $316.3 million at December 31, 2020. It is reasonably possible that our estimate of the losses for the COVID-19 defaults could change in the near term as a result of the continued impact of the pandemic on the economic environment, the results of existing and future governmental programs designed to assist individuals and businesses impacted by the virus and the performance of the COVID-19 defaults in the forbearance programs. A 100 basis point increase or decrease in the reserve rate applied to COVID-19 default notices received in April 2020 through September 2020 would result in a corresponding increase or decrease in our reserve for loss and LAE of approximately $35 million as of December 31, 2020. The impact on our reserves in future periods will be dependent upon the amount of delinquent notices received from loan servicers, the performance of COVID-19 defaults and our expectations for the amount of ultimate losses on these delinquencies. During the third quarter of 2017, certain regions of the U.S. experienced hurricanes which have impacted our insured portfolio’s performance. Loans in default identified as hurricane-related defaults totaled 2,288 as of December 31, 2017 and in the fourth quarter of 2017, we provided reserves of $11.1 million for losses and LAE on these hurricane-related defaults. In the year ended December 31, 2018, 2,150 of the 2,288 defaults previously identified as hurricane-related cured. In the fourth quarter of 2018, we reduced the reserves on hurricane-related defaults by $9.9 million based on the performance to date and our expectations of the amount of ultimate losses on the remaining delinquencies. The following table summarizes incurred loss and allocated loss adjustment expense development, IBNR plus expected development on reported defaults and the cumulative number of reported defaults. The information about incurred loss development for the years ended December 31, 2011 to 2019 is presented as supplementary information. Incurred Loss and Allocated LAE, As of December 31, 2020 ($ in thousands) Total of IBNR plus Expected Development on Reported Defaults Cumulative Number of Reported Defaults (1) Unaudited Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 57 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 1 2012 1,523 858 814 781 748 809 808 808 808 — 19 2013 2,986 2,461 2,008 1,997 2,060 2,058 2,058 2,058 — 51 2014 6,877 4,312 3,323 2,984 2,930 2,897 2,882 1 92 2015 14,956 9,625 8,893 8,439 8,461 8,323 18 214 2016 21,889 11,890 9,455 9,219 8,972 45 252 2017 38,178 16,261 12,202 11,488 85 365 2018 36,438 23,168 19,536 424 606 2019 50,562 39,085 2,151 1,551 2020 317,516 23,023 29,834 Total $ 410,668 (1) Cumulative number of reported defaults includes cumulative paid claims plus loans in default by accident year as of December 31, 2020. The following table summarizes cumulative paid losses and allocated loss adjustment expenses, net of reinsurance. The information about paid loss development for the years ended December 31, 2011 through 2019 is presented as supplementary information. ($ in thousands) Cumulative Paid Losses and Allocated LAE Unaudited Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 2012 24 535 659 665 665 808 808 808 808 2013 239 928 1,501 1,775 1,880 2,058 2,058 2,058 2014 138 1,587 2,463 2,787 2,897 2,882 2,867 2015 544 3,610 6,960 7,535 7,961 8,055 2016 927 4,896 6,947 7,864 8,270 2017 633 5,370 9,156 10,257 2018 1,310 8,067 13,406 2019 1,288 8,049 2020 1,018 Total $ 54,788 All outstanding liabilities before 2011, net of reinsurance — Reserve for losses and LAE, net of reinsurance $ 355,880 The following table provides a reconciliation of the net incurred losses and paid claims development tables above to the reserve for losses and LAE at December 31, 2020: ($ in thousands) December 31, 2020 Reserve for losses and LAE, net of reinsurance $ 355,880 Reinsurance recoverables on unpaid claims 19,061 Total gross reserve for losses and LAE $ 374,941 For our mortgage insurance portfolio, our average annual payout of losses as of December 31, 2020 is as follows: Average Annual Percentage Payout of Incurred Losses and Allocated LAE by Year Year 1 2 3 4 5 6 7 8 9 Average Payout 6 % 40 % 28 % 9 % 4 % 7 % 0 % 0 % 0 % |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Credit Facility On October 14, 2020, Essent Group and its subsidiaries, Essent Irish Intermediate Holdings Limited and Essent US Holdings, Inc. (collectively, the "Borrowers"), entered into a second amended and restated, three-year secured credit facility with a committed capacity of $625 million (the “Credit Facility”). The Credit Facility amends and restates the three-year, secured revolving credit facility entered into on May 2, 2018, and provides for an increase in the revolving credit facility from $275 million to $300 million. At closing, $325 million of new term loans were issued, with $225 million of the proceeds used to repay the existing term loans outstanding and remaining $100 million along with Essent Group cash were used to pay down all amounts outstanding under the revolving component of the Credit Facility. The Credit Facility also provides an option to increase the capacity to $775 million. Borrowings under the Credit Facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries. Borrowings accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. A commitment fee is due quarterly on the average daily amount of the undrawn revolving commitment. The applicable margin and the commitment fee are based on the senior unsecured debt rating or long-term issuer rating of Essent Group to the extent available, or the insurer financial strength rating of Essent Guaranty. The annual commitment fee rate at December 31, 2020 was 0.35%. The obligations under the Credit Facility are secured by certain assets of the Borrowers, excluding the stock and assets of its insurance and reinsurance subsidiaries. The Credit Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and Essent Guaranty's compliance with the PMIERs (see Note 16). The borrowings under the Credit Facility contractually mature on October 16, 2023. As of December 31, 2020, the Company was in compliance with the covenants and $325 million had been borrowed under the Credit Facility with a weighted average interest rate of 2.19%. As of December 31, 2019, $225 million had been borrowed with a weighted average interest rate of 3.51%. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Obligations under Guarantees Under the terms of CUW Solutions' contract underwriting agreements with lenders and subject to contractual limitations on liability, we agree to indemnify certain lenders against losses incurred in the event that we make an error in determining whether loans processed meet specified underwriting criteria, to the extent that such error materially restricts or impairs the salability of such loan, results in a material reduction in the value of such loan or results in the lender repurchasing the loan. The indemnification may be in the form of monetary or other remedies. For each of the years ended December 31, 2020 and 2019, we paid less than $0.1 million related to remedies. As of December 31, 2020, management believes any potential claims for indemnification related to contract underwriting services through December 31, 2020 are not material to our consolidated financial position or results of operations. In addition to the indemnifications discussed above, in the normal course of business, we enter into agreements or other relationships with third parties pursuant to which we may be obligated under specified circumstances to indemnify the counterparties with respect to certain matters. Our contractual indemnification obligations typically arise in the context of agreements entered into by us to, among other things, purchase or sell services, finance our business and business transactions, lease real property and license intellectual property. The agreements we enter into in the normal course of business generally require us to pay certain amounts to the other party associated with claims or losses if they result from our breach of the agreement, including the inaccuracy of representations or warranties. The agreements we enter into may also contain other indemnification provisions that obligate us to pay amounts upon the occurrence of certain events, such as the negligence or willful misconduct of our employees, infringement of third-party intellectual property rights or claims that performance of the agreement constitutes a violation of law. Generally, payment by us under an indemnification provision is conditioned upon the other party making a claim, and typically we can challenge the other party's claims. Further, our indemnification obligations may be limited in time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us under an indemnification agreement or obligation. As of December 31, 2020, contingencies triggering material indemnification obligations or payments have not occurred historically and are not expected to occur. The nature of the indemnification provisions in the various types of agreements and relationships described above are believed to be low risk and pervasive, and we consider them to have a remote risk of loss or payment. We have not recorded any provisions on the consolidated balance sheets related to these indemnifications. Commitments We lease office space for use in our operations under leases accounted for as operating leases. These leases generally include options to extend them for periods of up to ten years. Our option to extend the term of our primary office locations at the greater of existing or prevailing market rates was not recognized in our right-of-use asset and lease liability. When establishing the value of our right-of-use asset and lease liability, we determine the discount rate for the underlying leases using the prevailing market interest rate for a borrowing of the same duration of the lease plus the risk premium inherent in the borrowings under our Credit Facility. Operating lease right-of-use assets of $8.7 million and $10.0 million as of December 31, 2020 and 2019, respectively, are reported on our consolidated balance sheet as property and equipment. Operating lease liabilities of $10.9 million and $12.6 million as of December 31, 2020 and 2019, respectively, are reported on our consolidated balance sheet as other accrued liabilities. Total rent expense was $2.4 million, $2.5 million and $2.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. The following table presents lease cost and other lease information as of and for the years ended December 31: Year Ended December 31, ($ in thousands) 2020 2019 Lease cost: Operating lease cost $ 2,532 $ 2,479 Short-term lease cost 19 101 Sublease income (131) (129) Total lease cost $ 2,420 $ 2,451 Other information: Weighted average remaining lease term - operating leases 3.8 years 4.8 years Weighted average discount rate - operating leases 3.9 % 4.0 % The following table presents a maturity analysis of our lease liabilities as follows at December 31, 2020: Year Ended December 31 (In thousands) 2021 $ 3,261 2022 3,309 2023 3,017 2024 1,334 2025 793 2026 and thereafter — Total lease payments to be paid 11,714 Less: Future interest expense (864) Present value of lease liabilities $ 10,850 The maturity analysis of our lease liabilities shown above have not been reduced by minimum sublease rental income of $0.1 million due in 2021 under the non-cancelable sublease. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Capital Stock | Capital Stock Our authorized share capital consists of 233.3 million shares of a single class of common shares. The common shares have no pre-emptive rights or other rights to subscribe for additional shares, and no rights of redemption, conversion or exchange. Under certain circumstances and subject to the provisions of Bermuda law and our bye-laws, we may be required to make an offer to repurchase shares held by members. The common shares rank pari passu with one another in all respects as to rights of payment and distribution. In general, holders of common shares will have one vote for each common share held by them and will be entitled to vote, on a non-cumulative basis, at all meetings of shareholders. In the event that a shareholder is considered a 9.5% Shareholder under our bye-laws, such shareholder's votes will be reduced by whatever amount is necessary so that after any such reduction the votes of such shareholder will not result in any other person being treated as a 9.5% Shareholder with respect to the vote on such matter. Under these provisions certain shareholders may have their voting rights limited to less than one vote per share, while other shareholders may have voting rights in excess of one vote per share. In June 2020, Essent Group completed the sale of 13.8 million common shares in a public offering at a price of $33.25 per share. The total net proceeds from this offering were approximately $440.0 million after deducting underwriting discounts, commissions and other offering expenses. Dividends During the third quarter of 2019, the Board of Directors declared Essent's inaugural quarterly cash dividend of $0.15 per common share which was paid in September 2019. In each subsequent quarter, we declared and paid quarterly cash dividends on our common shares. The following table presents the amounts declared and paid per common share each quarter: Quarter Ended 2020 2019 March 31 $ 0.16 $ — June 30 0.16 — September 30 0.16 0.15 December 31 0.16 0.15 Total dividends per common share declared and paid $ 0.64 $ 0.30 In February 2021, the Board of Directors declared a quarterly cash dividend of $0.16 per common share payable on March 19, 2021, to shareholders of record on March 10, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In 2013, Essent Group's Board of Directors adopted, and Essent Group's shareholders approved, the Essent Group Ltd. 2013 Long-Term Incentive Plan (the "2013 Plan"), which was effective upon completion of the initial public offering. The types of awards available under the 2013 Plan include nonvested shares, nonvested share units, non-qualified share options, incentive stock options, share appreciation rights, and other share-based or cash-based awards. Nonvested shares and nonvested share units granted under the 2013 Plan have rights to dividends, which entitle the holders to the same dividend value per share as holders of common shares in the form of dividend equivalent units ("DEUs"). DEUs are subject to the same vesting and other terms and conditions as the corresponding nonvested shares and nonvested share units. DEUs vest when the underlying shares or share units vest and are forfeited if the underlying share or share units forfeit prior to vesting. The maximum number of shares and share units available for issuance is 7.5 million under the 2013 Plan. As of December 31, 2020, there were 3.7 million common shares available for future grant under the 2013 Plan. In September 2013, certain members of senior management were granted nonvested common shares under the 2013 Plan that were subject to time-based and performance-based vesting. The time-based share awards granted in September 2013 vested in four In May 2015, nonvested common shares were granted to an employee in connection with an employment agreement that were subject to time-based and performance-based vesting. The time-based share award vested in four In February of each year, 2015 through 2020, certain members of senior management were granted nonvested common shares under the 2013 Plan that were subject to time-based and performance-based vesting. The time-based share awards vest in three The portion of the nonvested performance-based share awards that will be earned based upon the achievement of compounded annual book value per share growth is as follows: 2017 Performance-Based Grants 2016 Performance-Based Grants 2013, 2014 and 2015 Performance-Based Grants Performance Compounded Nonvested Compounded Nonvested Compounded Nonvested <16 % 0 % <13 % 0 % <11 % 0 % Threshold 16 % 25 % 13 % 25 % 11 % 10 % 17 % 50 % 14 % 50 % 12 % 36 % 18 % 75 % 15 % 75 % 13 % 61 % 14 % 87 % Maximum ≥19 % 100 % ≥16 % 100 % ≥15 % 100 % 2020 Performance-Based Grants 2019 Performance-Based Grants 2018 Performance-Based Grants Performance Compounded Nonvested Compounded Nonvested Compounded Nonvested <13 % 0 % <14 % 0 % <15 % 0 % Threshold 13 % 10 % 14 % 10 % 15 % 25 % 14 % 35 % 15 % 35 % 16 % 50 % 15 % 60 % 16 % 60 % 17 % 75 % 16 % 85 % 17 % 85 % Maximum ≥17 % 100 % ≥18 % 100 % ≥18 % 100 % In the event that the compounded annual book value per share growth falls between the performance levels shown above, the nonvested common shares earned will be determined on a straight-line basis between the respective levels shown. The compounded annual book value per share growth for each of the 2013, 2014, 2015, 2016 and 2017 performance-based grants exceeded the maximum performance level and have vested or will vest at 100%. In January 2017, time-based share units were issued to all vice president and staff level employees that vested in three three three In May of each year, 2017 through 2020, time-based share units were granted to non-employee directors that vest one year from the date of grant. The following tables summarize nonvested common share, nonvested common share unit and DEU activity for the year ended December 31: 2020 Time and Performance- Time-Based Share Units DEUs (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Dividend Equivalent Units Weighted Outstanding at beginning of year 394 $ 42.02 169 $ 41.31 351 $ 39.78 5 $ 51.11 Granted 109 51.52 69 51.52 350 48.75 19 35.42 Vested (140) 36.29 (85) 40.47 (192) 37.76 (3) 49.79 Forfeited — N/A — N/A (17) 50.04 — 33.86 Outstanding at end of year 363 $ 47.09 153 $ 46.34 492 $ 46.59 21 $ 37.66 2019 Time and Performance- Time-Based Share Units DEUs (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Dividend Equivalent Units Weighted Outstanding at beginning of year 482 $ 29.49 207 $ 32.82 449 $ 34.35 — N/A Granted 141 45.32 90 40.98 143 42.08 5 $ 51.09 Vested (229) 17.69 (128) 27.37 (232) 30.85 — 48.63 Forfeited — N/A — N/A (9) 35.53 — 49.27 Outstanding at end of year 394 $ 42.02 169 $ 41.31 351 $ 39.78 5 $ 51.11 2018 Time and Performance- Time-Based Share Units (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Outstanding at beginning of year 1,595 $ 17.03 410 $ 21.12 536 $ 29.13 Granted 113 45.02 73 45.02 161 42.19 Vested (1,226) 14.71 (276) 18.67 (238) 28.02 Forfeited — N/A — N/A (10) 31.59 Outstanding at end of year 482 $ 29.49 207 $ 32.82 449 $ 34.35 Quoted market prices are used for the valuation of common shares granted subsequent to our initial public offering. For nonvested common shares granted in September 2013, prior to our IPO, the valuation estimate was based on analysis provided by the underwriters regarding the estimated fair value of Essent and the estimated IPO price range. Factors considered in determining the IPO price range and common share valuation included prevailing market conditions, estimates of the Company's business potential and earnings prospects, the Company's historical operating results, market valuations of companies deemed comparable to the Company and an assessment of risks and opportunities. The total fair value of nonvested shares, share units or DEUs that vested was $18.5 million, $25.5 million and $75.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $24.2 million of total unrecognized compensation expense related to nonvested shares or share units outstanding at December 31, 2020 and we expect to recognize the expense over a weighted average period of 1.8 years. In connection with our incentive program covering bonus awards for performance year 2020, in February 2021, 86,058 nonvested common share units were issued to certain employees and are subject to time-based vesting. In February 2021, 373,552 nonvested common shares were granted to certain members of senior management and are subject to time-based and performance-based vesting. In February 2021, the performance-based share awards granted in 2019 and 2020 to certain members of senior management were amended to provide that such awards will no longer be subject to the achievement of the compounded annual book value per share growth metrics and will be subject to only service-based vesting. As a result, the unvested shares subject to the amended 2019 and 2020 awards will vest on March 1, 2022 and March 1, 2023, respectively, subject to the continued service requirements and other terms and conditions set forth in the applicable award agreements, without taking into consideration any performance metrics. Compensation expense related to amending these awards will be recognized over the remaining vesting period. Employees have the option to tender shares to Essent Group to pay the minimum employee statutory withholding taxes associated with shares upon vesting. Common shares tendered by employees to pay employee withholding taxes totaled 141,801, 208,947 and 718,726 in 2020, 2019 and 2018, respectively. The tendered shares were recorded at cost and included in treasury stock. All treasury stock has been cancelled as of December 31, 2020 and 2019. Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares and share units were as follows for the years ended December 31: (In thousands) 2020 2019 2018 Compensation expense $ 18,462 $ 16,588 $ 15,073 Income tax benefit 3,511 3,125 2,805 |
Dividends Restrictions
Dividends Restrictions | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments [Abstract] | |
Dividends Restrictions | Dividends Restrictions Our U.S. insurance subsidiaries are subject to certain capital and dividend rules and regulations as prescribed by jurisdictions in which they are authorized to operate. Under the insurance laws of the Commonwealth of Pennsylvania, Essent Guaranty and Essent PA may pay dividends during any 12-month period in an amount equal to the greater of (i) 10% of the preceding year-end statutory policyholders' surplus or (ii) the preceding year's statutory net income. The Pennsylvania statute also specifies that dividends and other distributions can be paid out of positive unassigned surplus without prior approval. At December 31, 2020, Essent Guaranty had unassigned surplus of approximately $343.6 million. Essent Guaranty paid no dividends to Essent Group or any intermediate holding companies in the years ended December 31, 2020 or 2019. During the year ended December 31, 2018, Essent Guaranty paid to its parent, Essent US Holdings, Inc. ("Essent Holdings"), a $40 million dividend which was used to repay the borrowings remaining under the revolving component of the Credit Facility. As a result of PMIERs guidance issued by the GSEs, through June 30, 2021, Essent Guaranty is required to obtain GSE written approval before paying a dividend. Essent PA had unassigned surplus of approximately $15.4 million as of December 31, 2020. Essent PA did not pay a dividend in 2020, 2019 or 2018. Essent Re is subject to certain dividend restrictions as prescribed by the Bermuda Monetary Authority and under certain agreements with counterparties. In connection with the quota share reinsurance agreement with Essent Guaranty, Essent Re has agreed to maintain a minimum total equity of $100 million. As of December 31, 2020, Essent Re had total equity of $1.1 billion. At December 31, 2020, our insurance subsidiaries were in compliance with these rules, regulations and agreements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesFor the year ended December 31, 2020, the statutory income tax rates of the countries where the Company does business are 21% in the United States and 0.0% in Bermuda. The statutory income tax rate of each country is applied against the taxable income from each country to calculate the income tax expense. Income tax expense which is generated in the U.S. consists of the following components for the years ended December 31: (In thousands) 2020 2019 2018 Current $ 38,402 $ 43,867 $ 28,644 Deferred 38,653 59,481 50,692 Total income tax expense $ 77,055 $ 103,348 $ 79,336 For the year ended December 31, 2020, pre-tax income attributable to Bermuda and U.S. operations was $129.3 million and $360.8 million, respectively, as compared to $162.8 million and $496.3 million, respectively, for the year ended December 31, 2019 and $128.5 million and $418.2 million, respectively, for the year ended December 31, 2018. Income tax expense is different from that which would be obtained by applying the applicable statutory income tax rates to income before taxes by jurisdiction (i.e. U.S. 21%; Bermuda 0.0%). The reconciliation of the difference between income tax expense and the expected tax provision at the weighted average tax rate was as follows for the years ended December 31: 2020 2019 2018 ($ in thousands) $ % of pretax $ % of pretax $ % of pretax Tax provision at weighted average statutory rates $ 75,763 15.5 % $ 104,213 15.8 % $ 87,815 16.1 % Non-deductible expenses 2,482 0.5 2,595 0.4 1,483 0.3 Tax exempt interest, net of proration (1,462) (0.3) (1,541) (0.2) (1,741) (0.3) Excess tax benefits from stock-based compensation (599) (0.1) (1,997) (0.3) (9,644) (1.8) Other 871 0.1 78 0.0 1,423 0.2 Total income tax expense $ 77,055 15.7 % $ 103,348 15.7 % $ 79,336 14.5 % We provide deferred taxes to reflect the estimated future tax effects of the differences between the financial statement and tax bases of assets and liabilities using currently enacted tax laws. The net deferred tax liability was comprised of the following at December 31: (In thousands) 2020 2019 Deferred tax assets $ 29,577 $ 29,392 Deferred tax liabilities (334,686) (279,012) Net deferred tax liability $ (305,109) $ (249,620) The components of the net deferred tax liability were as follows at December 31: (In thousands) 2020 2019 Contingency reserves $ (300,281) $ (261,855) Unrealized (gain) loss on investments (30,050) (13,214) Unearned premium reserve 15,192 16,641 Accrued expenses 4,202 3,391 Deferred policy acquisition costs (3,571) (3,298) Unearned ceding commissions 2,951 3,227 Loss reserves 2,529 416 Nonvested shares 1,767 2,426 Start-up expenditures, net 1,137 1,410 Change in fair market value of derivatives 912 370 Fixed assets 880 1,502 Investments in limited partnerships (561) (400) Prepaid expenses (129) (132) Loss reserves - TCJA transition adjustment (94) (113) Organizational expenditures 7 9 Net deferred tax liability $ (305,109) $ (249,620) As a mortgage guaranty insurer, we are eligible for a tax deduction, subject to certain limitations, under Section 832(e) of the Internal Revenue Code ("IRC") for amounts required by state law or regulation to be set aside in statutory contingency reserves. The deduction is allowed only to the extent that we purchase T&L Bonds in an amount equal to the tax benefit derived from deducting any portion of our statutory contingency reserves. During the year ended December 31, 2020, we had net purchases of T&L Bonds in the amount of $40.8 million and had net purchases of T&L Bonds in the amount of $59.5 million during the year ended December 31, 2019. As of December 31, 2020 and 2019, we held $302.6 million and $261.9 million of T&L Bonds, respectively. In evaluating our ability to realize the benefit of our deferred tax assets, we consider the relevant impact of all available positive and negative evidence including our past operating results and our forecasts of future taxable income. At December 31, 2020 and 2019, after weighing all the evidence, management concluded that it was more likely than not that our deferred tax assets would be realized. Under current Bermuda law, the parent company, Essent Group, and its Bermuda subsidiary, Essent Re, are not required to pay any taxes on income and capital gains. In the event that there is a change such that these taxes are imposed, these companies would be exempted from any such tax until March of 2035 pursuant to the Bermuda Exempt Undertakings Tax Protection Act of 1966, and the Exempt Undertakings Tax Protection Amendment Act of 2011. Essent Holdings and its subsidiaries are subject to income taxes imposed by U.S. law and file a U.S. Consolidated Income Tax Return. Should Essent Holdings pay a dividend to its parent company, Essent Irish Intermediate Holdings Limited, withholding taxes at a rate of 5% under the U.S./Ireland tax treaty would likely apply assuming the Company avails itself of Treaty benefits under the U.S./Ireland tax treaty. Absent treaty benefits, the withholding rate on outbound dividends would be 30%. Currently, however, no withholding taxes are accrued with respect to such unremitted earnings as management has no intention of remitting these earnings. Similarly, no foreign income taxes have been provided on the un-remitted earnings of the Company's U.S. subsidiaries as management has neither the intention of remitting these earnings, nor would any Ireland tax be due, as any Irish tax would be expected to be fully offset by credit for taxes paid to the U.S. An estimate of the cumulative amount of U.S. earnings that would be subject to withholding tax, if distributed outside of the U.S., is approximately $2.1 billion. The associated withholding tax liability under the U.S./Ireland tax treaty would be approximately $103.5 million. Essent is not subject to income taxation other than as stated above. There can be no assurance that there will not be changes in applicable laws, regulations, or treaties which might require Essent to change the way it operates or becomes subject to taxation. |
Earnings per Share (EPS)
Earnings per Share (EPS) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share (EPS) | Earnings per Share (EPS) The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share for the years ended December 31: (In thousands, except per share amounts) 2020 2019 2018 Net income $ 413,041 $ 555,713 $ 467,363 Basic weighted average shares outstanding 106,098 97,762 97,403 Dilutive effect of nonvested shares 278 465 571 Diluted weighted average shares outstanding 106,376 98,227 97,974 Basic earnings per share $ 3.89 $ 5.68 $ 4.80 Diluted earnings per share $ 3.88 $ 5.66 $ 4.77 There were 324,813, 39,490 and 128,575 antidilutive shares for the years ended December 31, 2020, 2019 and 2018, respectively. The nonvested performance-based share awards are considered contingently issuable for purposes of the EPS calculation. Based on the compounded annual book value per share growth as of December 31, 2020, the following percentages of the performance-based share awards would be issuable under the terms of the arrangements if December 31, 2020 was the end of the contingency period: 2018 Performance-Based Grants 100 % 2019 Performance-Based Grants 100 % 2020 Performance-Based Grants 25 % Based on the compounded annual book value per share growth as of December 31, 2019 and 2018, 100% of all performance-based share awards would have been issuable under the terms of the arrangements at each date if December 31 was the end of the contingency period. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table shows the rollforward of accumulated other comprehensive income (loss) for the year ended December 31: 2020 2019 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of year $ 69,401 $ (13,214) $ 56,187 $ (33,276) $ 4,283 $ (28,993) Other comprehensive income (loss): Unrealized holding gains (losses) on investments: Unrealized holding gains arising during the year 101,620 (17,286) 84,334 105,906 (17,995) 87,911 Less: Reclassification adjustment for gains included in net income (1) (2,697) 450 (2,247) (3,229) 498 (2,731) Net unrealized gains on investments 98,923 (16,836) 82,087 102,677 (17,497) 85,180 Other comprehensive gain 98,923 (16,836) 82,087 102,677 (17,497) 85,180 Balance at end of year $ 168,324 $ (30,050) $ 138,274 $ 69,401 $ (13,214) $ 56,187 _______________________________________________________________________________ (1) Included in net realized investments gains on our consolidated statements of comprehensive income. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We carry certain of our financial instruments at fair value. We define fair value as the current amount that would be exchanged to sell an asset or transfer a liability, other than in a forced liquidation. Fair Value Hierarchy ASC No. 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The level within the fair value hierarchy to measure the financial instrument shall be determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: • Level 1—Quoted prices for identical instruments in active markets accessible at the measurement date. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and valuations in which all significant inputs are observable in active markets. Inputs are observable for substantially the full term of the financial instrument. • Level 3—Valuations derived from one or more significant inputs that are unobservable. Determination of Fair Value When available, we generally use quoted market prices to determine fair value and classify the financial instrument in Level 1. In cases where quoted market prices for similar financial instruments are available, we utilize these inputs for valuation techniques and classify the financial instrument in Level 2. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flows, present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows and we classify the financial instrument in Level 3. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. We used the following methods and assumptions in estimating fair values of financial instruments: • Investments available for sale—Investments available for sale are valued using quoted market prices in active markets, when available, and those investments are classified as Level 1 of the fair value hierarchy. Level 1 investments available for sale include investments such as U.S. Treasury securities and money market funds. Investments available for sale are classified as Level 2 of the fair value hierarchy if quoted market prices are not available and fair values are estimated using quoted prices of similar securities or recently executed transactions for the securities. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities, corporate debt securities, residential and commercial mortgage securities and asset-backed securities are classified as Level 2 investments. We use independent pricing sources to determine the fair value of securities available for sale in Level 1 and Level 2 of the fair value hierarchy. We use one primary pricing service to provide individual security pricing based on observable market data and receive one quote per security. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing service and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities, and corporate debt securities are valued by our primary vendor using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves and credit risk. Residential and commercial mortgage securities and asset-backed securities are valued by our primary vendor using proprietary models based on observable inputs, such as interest rate spreads, prepayment speeds and credit risk. As part of our evaluation of investment prices provided by our primary pricing service, we obtained and reviewed their pricing methodologies which include a description of how each security type is evaluated and priced. We review the reasonableness of prices received from our primary pricing service by comparison to prices obtained from additional pricing sources. We have not made any adjustments to the prices obtained from our primary pricing service. Assets and Liabilities Measured at Fair Value All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis. December 31, 2020 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 268,444 $ — $ — $ 268,444 U.S. agency securities — 18,085 — 18,085 U.S. agency mortgage-backed securities — 995,905 — 995,905 Municipal debt securities — 551,517 — 551,517 Non-U.S. government securities — 61,607 — 61,607 Corporate debt securities — 1,126,512 — 1,126,512 Residential and commercial mortgage securities — 409,282 — 409,282 Asset-backed securities — 454,717 — 454,717 Money market funds 679,304 — — 679,304 Total assets at fair value (1) $ 947,748 $ 3,617,625 $ — $ 4,565,373 December 31, 2019 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 242,206 $ — $ — $ 242,206 U.S. agency securities — 33,605 — 33,605 U.S. agency mortgage-backed securities — 848,334 — 848,334 Municipal debt securities — 361,638 — 361,638 Non-U.S. government securities — 54,995 — 54,995 Corporate debt securities — 880,301 — 880,301 Residential and commercial mortgage securities — 288,281 — 288,281 Asset-backed securities — 326,025 — 326,025 Money market funds 315,362 — — 315,362 Total assets at fair value (1) $ 557,568 $ 2,793,179 $ — $ 3,350,747 _______________________________________________________________________________ (1) Does not include the fair value of embedded derivatives, which we have accounted for separately as freestanding derivatives and included in other assets or other accrued liabilities in our consolidated balance sheet. See Note 5 for more information. |
Statutory Accounting
Statutory Accounting | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Statutory Accounting | Statutory Accounting Our U.S. insurance subsidiaries prepare statutory-basis financial statements in accordance with the accounting practices prescribed or permitted by their respective state’s department of insurance, which is a comprehensive basis of accounting other than GAAP. We did not use any prescribed or permitted statutory accounting practices (individually or in the aggregate) that resulted in reported statutory surplus or capital that was significantly different from the statutory surplus or capital that would have been reported had National Association of Insurance Commissioners’ statutory accounting practices been followed. The following table presents Essent Guaranty’s and Essent PA’s statutory net income, statutory surplus and contingency reserve liability as of and for the years ended December 31: (In thousands) 2020 2019 2018 Essent Guaranty Statutory net income $ 312,091 $ 443,675 $ 379,119 Statutory surplus 1,048,878 1,032,416 872,105 Contingency reserve liability 1,499,782 1,197,279 916,568 Essent PA Statutory net income $ 4,560 $ 8,073 $ 9,306 Statutory surplus 54,354 52,936 49,336 Contingency reserve liability 56,032 52,957 48,545 Net income determined in accordance with statutory accounting practices differs from GAAP. In 2020 and 2019, the more significant differences between net income determined under statutory accounting practices and GAAP for Essent Guaranty and Essent PA relate to policy acquisition costs and income taxes. Under statutory accounting practices, policy acquisition costs are expensed as incurred while such costs are capitalized and amortized to expense over the life of the policy under GAAP. As discussed in Note 12, we are eligible for a tax deduction, subject to certain limitations for amounts required by state law or regulation to be set aside in statutory contingency reserves when we purchase T&L Bonds. Under statutory accounting practices, this deduction reduces the tax provision recorded by Essent Guaranty and Essent PA and, as a result, increases statutory net income and surplus as compared to net income and equity determined in accordance with GAAP. At December 31, 2020 and 2019, the statutory capital of our U.S. insurance subsidiaries, which is defined as the total of statutory surplus and contingency reserves, was in excess of the statutory capital necessary to satisfy their regulatory requirements. Effective December 31, 2015, Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, implemented new coordinated Private Mortgage Insurer Eligibility Requirements, which we refer to as the "PMIERs." The PMIERs represent the standards by which private mortgage insurers are eligible to provide mortgage insurance on loans owned or guaranteed by Fannie Mae and Freddie Mac. The PMIERs include financial strength requirements incorporating a risk-based framework that require approved insurers to have a sufficient level of liquid assets from which to pay claims. The PMIERs also include enhanced operational performance expectations and define remedial actions that apply should an approved insurer fail to comply with these requirements. In 2018, the GSEs released revised PMIERs framework ("PMIERs 2.0") which became effective on March 31, 2019. As of December 31, 2020, Essent Guaranty, our GSE-approved mortgage insurance company, was in compliance with PMIERs 2.0. Statement of Statutory Accounting Principles No. 58, Mortgage Guaranty Insurance, requires mortgage insurers to establish a special contingency reserve for statutory accounting purposes included in total liabilities equal to 50% of earned premium for that year. During 2020, Essent Guaranty increased its contingency reserve by $302.5 million and Essent PA increased its contingency reserve by $3.1 million. This reserve is required to be maintained for a period of 120 months to protect against the effects of adverse economic cycles. After 120 months, the reserve is released to unassigned funds. In the event an insurer’s loss ratio in any calendar year exceeds 35%, however, the insurer may, after regulatory approval, release from its contingency reserves an amount equal to the excess portion of such losses. During the year ended December 31, 2020, Essent Guaranty and Essent PA released contingency reserves of $0.1 million and less than $0.1 million, respectively, to unassigned funds upon completion of the 120 month holding period. Essent Guaranty and Essent PA did not release any amounts from their contingency reserves in 2019 or 2018. Under The Insurance Act 1978, as amended, and related regulations of Bermuda (the "Insurance Act"), Essent Re is required to annually prepare statutory financial statements and a statutory financial return in accordance with the financial reporting provisions of the Insurance Act, which is a basis other than GAAP. The Insurance Act also requires that Essent Re maintain minimum share capital of $1 million and must ensure that the value of its general business assets exceeds the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margins and enhanced capital requirement pertaining to its general business. At December 31, 2020 and 2019, all such requirements were met. Essent Re's statutory capital and surplus was $1.1 billion and $939.2 million as of December 31, 2020 and 2019, respectively, and statutory net income was $143.5 million and $176.4 million, respectively. Statutory capital and surplus and net income determined in accordance with statutory accounting practices were not significantly different than the amounts determined under GAAP. |
Capital Maintenance Agreement
Capital Maintenance Agreement | 12 Months Ended |
Dec. 31, 2020 | |
Insurance Ratios [Abstract] | |
Capital Maintenance Agreement | Capital Maintenance AgreementEssent Guaranty has a capital maintenance agreement with Essent PA under which Essent Guaranty agreed to contribute funds, under specified conditions, to maintain Essent PA's risk-to-capital ratio at or below 25.0 to 1 in return for a surplus note. As of December 31, 2020, Essent PA's risk-to-capital ratio was 1.7:1 and there were no amounts outstanding related to this agreement. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following table summarizes the unaudited results of operations for each quarter of 2020 and 2019. 2020 (In thousands, except per share amounts) December 31 September 30 June 30 March 31 Net premiums earned $ 222,339 $ 222,258 $ 211,471 $ 206,496 Other revenues 24,860 20,780 24,606 22,344 Provision for losses and LAE 62,073 55,280 175,877 8,063 Other underwriting and operating expenses 36,825 37,100 38,819 41,947 Interest expense 2,149 2,227 2,566 2,132 Income before income taxes 146,152 148,431 18,815 176,698 Net income 123,602 124,536 15,380 149,523 Basic earnings per common share $ 1.10 $ 1.11 $ 0.15 $ 1.53 Diluted earnings per common share $ 1.10 $ 1.11 $ 0.15 $ 1.52 Basic weighted average shares outstanding 111,908 111,908 102,500 97,949 Diluted weighted average shares outstanding 112,310 112,134 102,605 98,326 2019 (In thousands, except per share amounts) December 31 September 30 June 30 March 31 Net premiums earned $ 207,671 $ 203,473 $ 188,490 $ 177,791 Other revenues 21,091 22,914 23,402 22,735 Provision for losses and LAE 10,929 9,990 4,960 7,107 Other underwriting and operating expenses 41,231 41,588 41,520 41,030 Interest expense 2,218 2,584 2,679 2,670 Income before income taxes 174,384 172,225 162,733 149,719 Net income 146,958 144,630 136,405 127,720 Basic earnings per common share $ 1.50 $ 1.48 $ 1.39 $ 1.31 Diluted earnings per common share $ 1.49 $ 1.47 $ 1.39 $ 1.30 Basic weighted average shares outstanding 97,830 97,822 97,798 97,595 Diluted weighted average shares outstanding 98,376 98,257 98,170 98,104 |
Schedule I - Summary of Investm
Schedule I - Summary of Investments-Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments-Other Than Investments in Related Parties | Schedule I—Summary of Investments—Other Than Investments in Related Parties December 31, 2020 Type of Investment Amortized Fair Amount at which Fixed maturities: Bonds: United States Government and government agencies and authorities $ 1,212,622 $ 1,254,075 $ 1,254,075 States, municipalities and political subdivisions 513,870 551,517 551,517 Residential and commercial mortgage securities 391,921 409,282 409,282 Asset-backed securities 452,527 454,717 454,717 Foreign government and agency securities 56,045 61,607 61,607 All other corporate bonds 1,050,830 1,107,315 1,107,315 Total fixed maturities 3,677,815 3,838,513 3,838,513 Short-term investments 726,875 726,860 726,860 Other invested assets 81,263 88,904 88,904 Total investments $ 4,485,953 $ 4,654,277 $ 4,654,277 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II - Condensed Financial Information of Registrant | Schedule II—Condensed Financial Information of Registrant Parent Company Only December 31, (In thousands) 2020 2019 Assets Investments Fixed maturities available for sale, at fair value (amortized cost: 2020 — $201,527; 2019 — $0) $ 202,129 $ — Short-term investments available for sale, at fair value (amortized cost: 2020 — $352,412; 2019 — $96,531) 352,415 96,531 Total investments available for sale 554,544 96,531 Cash 8,688 1,845 Due from affiliates 1,278 875 Investment in consolidated subsidiaries 3,518,029 3,009,447 Other assets 4,512 1,608 Total Assets $ 4,087,051 $ 3,110,306 Liabilities and stockholders' equity Liabilities Due to affiliates $ — $ 301 Credit facility borrowings (at carrying value, less unamortized deferred costs of $2,287 in 2020 and $564 in 2019) 222,713 124,436 Other accrued liabilities 1,705 724 Total liabilities 224,418 125,461 Commitments and contingencies Stockholders' Equity Common shares 1,686 1,476 Additional paid-in capital 1,571,163 1,118,655 Accumulated other comprehensive income 138,274 56,187 Retained earnings 2,151,510 1,808,527 Total stockholders' equity 3,862,633 2,984,845 Total liabilities and stockholders' equity $ 4,087,051 $ 3,110,306 See accompanying supplementary notes to Parent Company condensed financial information and the consolidated financial statements and notes thereto. Schedule II—Condensed Financial Information of Registrant Condensed Statements of Comprehensive Income Parent Company Only Year Ended December 31, (In thousands) 2020 2019 2018 Revenues: Net investment income $ 1,181 $ 1,601 $ 980 Realized investment losses, net (10) — — Administrative service fees from subsidiaries 872 649 551 Total revenues 2,043 2,250 1,531 Expenses: Administrative service fees to subsidiaries 3,728 3,053 2,510 Other operating expenses 5,929 6,925 5,076 Interest expense 6,446 5,742 5,462 Total expenses 16,103 15,720 13,048 Loss before income taxes and equity in undistributed net income in subsidiaries (14,060) (13,470) (11,517) Loss before equity in undistributed net income of subsidiaries (14,060) (13,470) (11,517) Equity in undistributed net income of subsidiaries 427,101 569,183 478,880 Net income $ 413,041 $ 555,713 $ 467,363 Other comprehensive income (loss): Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of $16,836 in 2020, $17,497 in 2019 and $(5,686) in 2018 82,087 85,180 (25,741) Total other comprehensive income (loss) 82,087 85,180 (25,741) Comprehensive income $ 495,128 $ 640,893 $ 441,622 See accompanying supplementary notes to Parent Company condensed financial information and the consolidated financial statements and notes thereto. Schedule II—Condensed Financial Information of Registrant Condensed Statements of Cash Flows Parent Company Only Year Ended December 31, (In thousands) 2020 2019 2018 Operating Activities Net income $ 413,041 $ 555,713 $ 467,363 Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income of subsidiaries (427,101) (569,183) (478,880) Loss on the sale of investments, net 10 — — Stock-based compensation expense 935 830 843 Amortization of premium on investment securities 435 — — Changes in assets and liabilities: Other assets (319) 416 911 Other accrued liabilities 18,208 15,562 15,537 Net cash provided by operating activities 5,209 3,338 5,774 Investing Activities Net change in short-term investments (255,884) (24,727) 26,122 Investments in subsidiaries — 55,001 — Purchase of investments available for sale (205,668) — — Proceeds from maturity of investments available for sale 838 — — Proceeds from sales of investments available for sale 3,386 — — Net cash (used in) provided by investing activities (457,328) 30,274 26,122 Financing Activities Issuance of common shares, net of costs 439,962 — — Credit facility borrowings 200,000 — — Credit facility repayments (100,000) — — Treasury stock acquired (6,354) (9,005) (31,414) Payment of issuance costs for credit facility (5,236) (15) (131) Dividends paid (69,410) (29,348) — Net cash provided by (used in) financing activities 458,962 (38,368) (31,545) Net increase (decrease) in cash 6,843 (4,756) 351 Cash at beginning of year 1,845 6,601 6,250 Cash at end of year $ 8,688 $ 1,845 $ 6,601 Supplemental Disclosure of Cash Flow Information Interest payments $ (5,714) $ (5,509) $ (4,984) Noncash Transactions Repayment of borrowings with term loan proceeds $ (225,000) $ — $ — See accompanying supplementary notes to Parent Company condensed financial information and the consolidated financial statements and notes thereto. Schedule II—Condensed Financial Information of Registrant Parent Company Only Supplementary Notes Note A The accompanying Parent Company financial statements should be read in conjunction with the consolidated financial statements and notes to consolidated financial statements. These financial statements have been prepared on the same basis and using the same accounting policies as described in the consolidated financial statements included herein, except that the Parent Company uses the equity method of accounting for its majority-owned subsidiaries. Note B Under the insurance laws of the Commonwealth of Pennsylvania, the insurance subsidiaries may pay dividends during any 12-month period in an amount equal to the greater of (i) 10% of the preceding year-end statutory policyholders' surplus or (ii) the preceding year's statutory net income. The Pennsylvania statute also requires that dividends and other distributions be paid out of positive unassigned surplus without prior approval. As of December 31, 2020, Essent Guaranty had unassigned surplus of approximately $343.6 million. Essent PA had unassigned surplus of approximately $15.4 million as of December 31, 2020. During the years ended December 31, 2020 and 2018, the Parent Company did not receive any dividends from its subsidiaries. During the year ended December 31, 2019, the Parent Company received dividends from Essent Re totaling $55.0 million. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV - Reinsurance | Schedule IV—Reinsurance Insurance Premiums Earned Years Ended December 31, 2020, 2019 and 2018 ($ in thousands) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Assumed Premiums as a Percentage of Net Premiums 2020 951,302 (88,738) — 862,564 0.0 % 2019 812,924 (35,499) — 777,425 0.0 % 2018 660,260 (10,768) — 649,492 0.0 % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Investments, Available for Sale and Investments | Investments Our fixed maturity and short-term investments are classified as available for sale as we may sell securities from time to time to provide liquidity and in response to changes in the market. Debt securities classified as available for sale are reported at fair value with unrealized gains and losses on these securities reported in other comprehensive income, net of deferred income taxes. See Note 15 for a description of the valuation methods for investments available for sale. We monitor our fixed maturities for unrealized losses that appear to be other-than-temporary. A fixed maturity security is considered to be other-than-temporarily impaired when the security's fair value is less than its amortized cost basis and 1) we intend to sell the security, 2) it is more likely than not that we will be required to sell the security before recovery of the security's amortized cost basis, or 3) we believe we will be unable to recover the entire amortized cost basis of the security (i.e., a credit loss has occurred). When we determine that a credit loss has been incurred, but we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before recovery of the security's amortized cost basis, the portion of the other-than-temporary impairment that is credit related is recorded as a realized loss in the consolidated statements of comprehensive income, and the portion of the other-than-temporary impairment that is not credit related is included in other comprehensive income. For those fixed maturities for which an other-than-temporary impairment has occurred, we adjust the amortized cost basis of the security and record a realized loss in the consolidated statements of comprehensive income. We recognize purchase premiums and discounts in interest income using the interest method over the securities' estimated holding periods, until maturity, or call date, if applicable. Gains and losses on the sales of securities are recorded on the trade date and are determined using the specific identification method. Short-term investments are defined as short-term, highly liquid investments, both readily convertible to cash and having maturities at acquisition of twelve months or less. |
Investments, Other Invested Assets | Other invested assets are comprised of limited partnership interests which are accounted for under the equity method of accounting with changes in value reported in other income. In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the partnership. We have elected to classify distributions received from these investments using the cumulative earnings approach. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. |
Long-Lived Assets | Long-Lived AssetsProperty and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance are charged to expense as incurred. Estimated useful lives are 5 years for furniture and fixtures and 2 to 3 years for equipment, computer hardware and purchased software. Certain costs associated with the acquisition or development of internal-use software are capitalized. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software's expected useful life, which is generally 3 years. We amortize leasehold improvements over the shorter of the lives of the leases or estimated service lives of the leasehold improvements. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs We defer certain personnel costs and premium tax expense directly related to the successful acquisition of new insurance policies and amortize these costs over the period the related estimated gross profits are recognized in order to match costs and revenues. We do not defer any underwriting costs associated with our contract underwriting services. Costs related to the acquisition of mortgage insurance business are initially deferred and reported as deferred policy acquisition costs. Consistent with industry accounting practice, amortization of these costs for each underwriting year book of business is recognized in |
Insurance Premium Revenue Recognition | Insurance Premium Revenue Recognition Mortgage guaranty insurance policies are contracts that are generally non-cancelable by the insurer, are renewable at a fixed price, and provide for payment of premium on a monthly, annual or single basis. Upon renewal, we are not able to re-underwrite or re-price our policies. Consistent with industry accounting practices, premiums written on a monthly basis are earned as coverage is provided. Monthly policies accounted for 84% of earned premium in 2020. Premiums written on an annual basis are amortized on a pro rata basis over the year of coverage. Primary mortgage insurance written on policies covering more than one year are referred to as single premium policies. A portion of the revenue from single premium policies is recognized in earned premium in the current period, and the remaining portion is deferred as unearned premium and earned over the expected life of the policy. If single premium policies related to insured loans are cancelled due to repayment by the borrower, and the premium is non-refundable, then the remaining unearned premium related to each cancelled policy is recognized as earned premium upon notification of the cancellation. The Company recorded $88.9 million and $42.5 million of earned premium related to policy cancellations for the years ended December 31, 2020 and 2019, respectively. Unearned premium represents the portion of premium written that is applicable to the estimated unexpired risk of insured loans. Rates used to determine the earning of single premium policies are estimates based on an analysis of the expiration of risk. |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses We establish reserves for losses based on our best estimate of ultimate claim costs for defaulted loans using the general principles contained in ASC No. 944, in accordance with industry practice. However, consistent with industry standards for mortgage insurers, we do not establish loss reserves for future claims on insured loans which are not currently in default. Loans are classified as in default when the borrower has missed two consecutive payments. Once we are notified that a borrower has defaulted, we will consider internal and third-party information and models, including the status of the loan as reported by its servicer and the type of loan product to determine the likelihood that a default will reach claim status. In addition, we will project the amount that we will pay if a default becomes a claim (referred to as "claim severity"). Based on this information, at each reporting date we determine our best estimate of loss reserves at a given point in time. Included in loss reserves are reserves for incurred but not reported ("IBNR") claims. IBNR reserves represent our estimated unpaid losses on loans that are in default, but have not yet been reported to us as delinquent by our customers. We will also establish reserves for associated loss adjustment expenses, consisting of the estimated cost of the claims administration process, including legal and other fees and expenses associated with administering the claims process. Establishing reserves is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Our estimates of claim rates and claim sizes will be strongly influenced by prevailing economic conditions, such as the overall state of the economy, current rates or trends in unemployment, changes in housing values and/or interest rates, and our best judgments as to the future values or trends of these macroeconomic factors. Losses incurred are also generally affected by the characteristics of our insured loans, such as the loan amount, loan-to-value ratio, the percentage of coverage on the insured loan and the credit quality of the borrower. |
Premium Deficiency Reserve | Premium Deficiency ReserveWe are required to establish a premium deficiency reserve if the net present value of the expected future losses and expenses for a particular group of policies exceeds the net present value of expected future premium, anticipated investment income and existing reserves for that specified group of policies. We reassess our expectations for premium, losses and expenses of our mortgage insurance business periodically and update our premium deficiency analysis accordingly. |
Derivative Instruments | Derivative Instruments Derivative instruments, including embedded derivative instruments, are recognized at fair value in the consolidated balance sheets. The amount of monthly reinsurance premiums ceded under our reinsurance contracts will fluctuate due to changes in one-month LIBOR and changes in money market rates. As the reinsurance premium will vary based on changes in these rates, we concluded that these reinsurance agreements contain embedded derivatives that are accounted for separately like freestanding derivatives. |
Stock-Based Compensation | Stock-Based Compensation We measure the cost of employee services received in exchange for awards of equity instruments at the grant date of the award using a fair value based method. Prior to our initial public offering, we estimated the fair value of each nonvested share grant on the date of grant based on management's best estimate using methods further described in Note 10 of our consolidated financial statements. Subsequent to our initial public offering, fair value is determined on the date of grant based on quoted market prices. We recognize compensation expense on nonvested shares over the vesting period of the award. Excess tax benefits and tax deficiencies associated with share-based payments are recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability (balance sheet) method. Under this method, we determine the net deferred tax asset or liability based on the tax effects of the temporary differences between the book and tax bases of the various assets and liabilities and give current recognition to changes in tax rates and laws. Changes in tax laws, rates, regulations and policies, or the final determination of tax audits or examinations, could materially affect our tax estimates. We evaluate the realizability of the deferred tax asset and recognize a valuation allowance if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. When evaluating the realizability of the deferred tax asset, we consider estimates of expected future taxable income, existing and projected book/tax differences, carryback and carryforward periods, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis is inherently subjective, as it requires management to forecast changes in the mortgage market, as well as the related impact on mortgage insurance, and the competitive and general economic environment in future periods. Changes in the estimate of deferred tax asset realizability, if applicable, are included in income tax expense on the consolidated statements of comprehensive income. ASC No. 740 provides a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In accordance with ASC No. 740, before a tax benefit can be recognized, a tax position is evaluated using a threshold that it is more likely than not that the tax position will be sustained upon examination. When evaluating the more-likely-than-not recognition threshold, ASC No. 740 provides that a company should presume the tax position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. If the tax position meets the more-likely-than-not recognition threshold, it is initially and subsequently measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As described in Note 12, we purchase non-interest-bearing United States Mortgage Guaranty Tax and Loss Bonds ("T&L Bonds") issued by the Treasury Department. These assets are carried at cost and are reported as prepaid federal income tax on the consolidated balance sheets. It is our policy to classify interest and penalties as income tax expense and to use the aggregate portfolio approach to release income tax effects from accumulated other comprehensive income. |
Earnings per Share | Earnings per Share Basic earnings per common share amounts are calculated based on income available to common stockholders and the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share amounts are calculated based on income available to common stockholders and the weighted average number of common and potential common shares outstanding during the reporting period. Potential common shares, composed of the incremental common shares issuable upon vesting of unvested common shares and common share units, are included in the earnings per share calculation to the extent that they are dilutive. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Adopted During 2020 In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) . This update is intended to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected through the use of an allowance for credit losses. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance rather than as a write-down of the amortized cost of the securities. The accounting for insurance losses and loss adjustment expenses ("LAE") are not within the scope of this ASU. The provisions of this update were effective for annual and interim periods beginning after December 15, 2019 and we adopted this standard on January 1, 2020 using the modified retrospective approach. The adoption of this ASU did not have a material effect on the Company's consolidated operating results or financial position. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . The amendments in this update modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The provisions of this update were effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for the removed disclosures. We adopted this standard on January 1, 2020. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements. Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments in this update provide temporary optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. It provides optional expedients and exceptions for applying generally accepted accounting principles to contract, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. The adoption of, and future elections under, this ASU are not expected to have a material impact on our consolidated financial statements as the ASU will ease, if warranted, the requirements for accounting for the future effects of the rate reform. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts and other transactions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We carry certain of our financial instruments at fair value. We define fair value as the current amount that would be exchanged to sell an asset or transfer a liability, other than in a forced liquidation. Fair Value Hierarchy ASC No. 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The level within the fair value hierarchy to measure the financial instrument shall be determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: • Level 1—Quoted prices for identical instruments in active markets accessible at the measurement date. • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and valuations in which all significant inputs are observable in active markets. Inputs are observable for substantially the full term of the financial instrument. • Level 3—Valuations derived from one or more significant inputs that are unobservable. Determination of Fair Value When available, we generally use quoted market prices to determine fair value and classify the financial instrument in Level 1. In cases where quoted market prices for similar financial instruments are available, we utilize these inputs for valuation techniques and classify the financial instrument in Level 2. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flows, present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows and we classify the financial instrument in Level 3. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. We used the following methods and assumptions in estimating fair values of financial instruments: • Investments available for sale—Investments available for sale are valued using quoted market prices in active markets, when available, and those investments are classified as Level 1 of the fair value hierarchy. Level 1 investments available for sale include investments such as U.S. Treasury securities and money market funds. Investments available for sale are classified as Level 2 of the fair value hierarchy if quoted market prices are not available and fair values are estimated using quoted prices of similar securities or recently executed transactions for the securities. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities, corporate debt securities, residential and commercial mortgage securities and asset-backed securities are classified as Level 2 investments. We use independent pricing sources to determine the fair value of securities available for sale in Level 1 and Level 2 of the fair value hierarchy. We use one primary pricing service to provide individual security pricing based on observable market data and receive one quote per security. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing service and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities, and corporate debt securities are valued by our primary vendor using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves and credit risk. Residential and commercial mortgage securities and asset-backed securities are valued by our primary vendor using proprietary models based on observable inputs, such as interest rate spreads, prepayment speeds and credit risk. As part of our evaluation of investment prices provided by our primary pricing service, we obtained and reviewed their pricing methodologies which include a description of how each security type is evaluated and priced. We review the reasonableness of prices received from our primary pricing service by comparison to prices obtained from additional pricing sources. We have not made any adjustments to the prices obtained from our primary pricing service. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of balances by type of long-lived assets | The balances by type were as follows at December 31: 2020 2019 (In thousands) Cost Accumulated Cost Accumulated Furniture and fixtures $ 2,220 $ (2,068) $ 2,148 $ (2,017) Office equipment 848 (772) 848 (700) Computer hardware 10,282 (8,987) 9,764 (7,728) Purchased software 38,434 (37,404) 37,909 (36,716) Costs of internal-use software 10,783 (8,959) 9,595 (8,185) Leasehold improvements 4,787 (2,777) 4,644 (2,293) Total $ 67,354 $ (60,967) $ 64,908 $ (57,639) |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investments available for sale | Investments available for sale consist of the following: December 31, 2020 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 259,378 $ 9,088 $ (22) $ 268,444 U.S. agency securities 17,930 155 — 18,085 U.S. agency mortgage-backed securities 963,670 33,205 (970) 995,905 Municipal debt securities (1) 513,870 37,662 (15) 551,517 Non-U.S. government securities 56,045 5,562 — 61,607 Corporate debt securities (2) 1,070,027 56,864 (379) 1,126,512 Residential and commercial mortgage securities 391,921 18,641 (1,280) 409,282 Asset-backed securities 452,527 3,246 (1,056) 454,717 Money market funds 679,322 — (18) 679,304 Total investments available for sale $ 4,404,690 $ 164,423 $ (3,740) $ 4,565,373 December 31, 2019 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 239,087 $ 3,526 $ (407) $ 242,206 U.S. agency securities 33,620 36 (51) 33,605 U.S. agency mortgage-backed securities 836,710 13,956 (2,332) 848,334 Municipal debt securities (1) 339,511 22,245 (118) 361,638 Non-U.S. government securities 52,230 2,812 (47) 54,995 Corporate debt securities (2) 856,638 24,255 (592) 880,301 Residential and commercial mortgage securities 282,840 6,542 (1,101) 288,281 Asset-backed securities 326,589 857 (1,421) 326,025 Money market funds 315,360 2 — 315,362 Total investments available for sale $ 3,282,585 $ 74,231 $ (6,069) $ 3,350,747 _______________________________________________________________________________ December 31, December 31, (1) The following table summarizes municipal debt securities as of : 2020 2019 Special revenue bonds 76.8 % 74.5 % General obligation bonds 20.3 21.3 Certificate of participation bonds 2.3 3.4 Tax allocation bonds 0.6 0.8 Total 100.0 % 100.0 % December 31, December 31, (2) The following table summarizes corporate debt securities as of : 2020 2019 Financial 34.9 % 34.4 % Consumer, non-cyclical 19.1 20.1 Communications 9.3 10.3 Energy 8.2 8.3 Consumer, cyclical 8.0 7.6 Technology 6.1 4.8 Utilities 5.9 6.2 Industrial 5.3 4.2 Basic materials 3.1 4.1 Government 0.1 — Total 100.0 % 100.0 % |
Schedule of amortized cost and fair value of investments available for sale by contractual maturity | The amortized cost and fair value of investments available for sale at December 31, 2020, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. (In thousands) Amortized Fair U.S. Treasury securities: Due in 1 year $ 78,956 $ 79,335 Due after 1 but within 5 years 130,312 134,802 Due after 5 but within 10 years 49,125 53,165 Due after 10 years 985 1,142 Subtotal 259,378 268,444 U.S. agency securities: Due in 1 year 8,906 8,958 Due after 1 but within 5 years 9,024 9,127 Subtotal 17,930 18,085 Municipal debt securities: Due in 1 year 6,881 6,892 Due after 1 but within 5 years 91,122 95,567 Due after 5 but within 10 years 235,030 254,387 Due after 10 years 180,837 194,671 Subtotal 513,870 551,517 Non-U.S. government securities: Due in 1 year — — Due after 1 but within 5 years 22,710 24,257 Due after 5 but within 10 years 24,246 27,680 Due after 10 years 9,089 9,670 Subtotal 56,045 61,607 Corporate debt securities: Due in 1 year 148,292 149,617 Due after 1 but within 5 years 576,987 602,286 Due after 5 but within 10 years 322,649 350,632 Due after 10 years 22,099 23,977 Subtotal 1,070,027 1,126,512 U.S. agency mortgage-backed securities 963,670 995,905 Residential and commercial mortgage securities 391,921 409,282 Asset-backed securities 452,527 454,717 Money market funds 679,322 679,304 Total investments available for sale $ 4,404,690 $ 4,565,373 |
Schedule of realized gross gains and losses on sale of investments available for sale | Gross gains and losses realized on the sale of investments available for sale were as follows: Year Ended December 31, (In thousands) 2020 2019 2018 Realized gross gains $ 5,608 $ 5,238 $ 2,201 Realized gross losses 2,482 1,746 883 |
Schedule of fair value of investments in an unrealized loss position and related unrealized losses | The fair value of investments available for sale in an unrealized loss position and the related unrealized losses for which no allowance for credit loss has been recorded were as follows: Less than 12 months 12 months or more Total December 31, 2020 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 28,776 $ (22) $ — $ — $ 28,776 $ (22) U.S. agency mortgage-backed securities 152,671 (924) 3,007 (46) 155,678 (970) Municipal debt securities 3,838 (15) — — 3,838 (15) Corporate debt securities 141,803 (379) — — 141,803 (379) Residential and commercial mortgage securities 63,203 (777) 9,516 (503) 72,719 (1,280) Asset-backed securities 124,165 (483) 65,897 (573) 190,062 (1,056) Money market funds 99,995 (18) — — 99,995 (18) Total $ 614,451 $ (2,618) $ 78,420 $ (1,122) $ 692,871 $ (3,740) Less than 12 months 12 months or more Total December 31, 2019 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 29,013 $ (331) $ 42,981 $ (76) $ 71,994 $ (407) U.S. agency securities — — 25,605 (51) 25,605 (51) U.S. agency mortgage-backed securities 101,684 (1,042) 113,866 (1,290) 215,550 (2,332) Municipal debt securities 10,651 (112) 624 (6) 11,275 (118) Non-U.S. government securities 9,664 (47) — — 9,664 (47) Corporate debt securities 83,013 (576) 14,531 (16) 97,544 (592) Residential and commercial mortgage securities 59,341 (1,059) 3,442 (42) 62,783 (1,101) Asset-backed securities 78,813 (202) 109,536 (1,219) 188,349 (1,421) Total $ 372,179 $ (3,369) $ 310,585 $ (2,700) $ 682,764 $ (6,069) |
Schedule of net investment income | Net investment income consists of: Year Ended December 31, (In thousands) 2020 2019 2018 Fixed maturities $ 83,313 $ 82,194 $ 63,053 Short-term investments 1,669 5,049 3,873 Gross investment income 84,982 87,243 66,926 Investment expenses (4,895) (3,701) (2,835) Net investment income $ 80,087 $ 83,542 $ 64,091 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable consists of the following at December 31: (In thousands) 2020 2019 Premiums receivable $ 46,974 $ 39,084 Other receivables 3,166 1,571 Total accounts receivable 50,140 40,655 Less: Allowance for doubtful accounts — — Accounts receivable, net $ 50,140 $ 40,655 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Schedule of effects of reinsurance | The effect of reinsurance on net premiums written and earned is as follows: Year Ended December 31, (In thousands) 2020 2019 2018 Net premiums written: Direct $ 922,851 $ 796,344 $ 696,055 Ceded (1) (88,738) (35,499) (10,768) Net premiums written $ 834,113 $ 760,845 $ 685,287 Net premiums earned: Direct $ 951,302 $ 812,924 $ 660,260 Ceded (1) (88,738) (35,499) (10,768) Net premiums earned $ 862,564 $ 777,425 $ 649,492 _______________________________________________________________________________ (1) Net of profit commission. |
Schedule of coverages and retentions | The following tables summarizes Essent Guaranty's excess of loss reinsurance agreements as of December 31, 2020: Vintage Year Reinsurer Effective Date Optional Termination Date 2015 & 2016 Radnor Re 2019-2 Ltd. June 20, 2019 June 25, 2024 2017 Radnor Re 2018-1 Ltd. March 22, 2018 March 25, 2023 (1) 2017 Panel of Reinsurers November 1, 2018 October 1, 2023 (2) 2018 Radnor Re 2019-1 Ltd. February 28, 2019 February 25, 2026 2018 Panel of Reinsurers February 28, 2019 February 25, 2026 2019 Radnor Re 2020-1 Ltd. January 30, 2020 January 25, 2027 2019 Panel of Reinsurers January 30, 2020 January 25, 2027 2019 & 2020 Radnor Re 2020-2 Ltd. October 8, 2020 October 25, 2027 _______________________________________________________________________________ (1) If the reinsurance agreement is not terminated at the optional termination date, the risk margin component of the reinsurance premium increases by 50%. (2) If the reinsurance agreement is not terminated at the optional termination date, the reinsurance premium increases by 50%. The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions as of December 31, 2020: (In thousands) Remaining Vintage Year Remaining Remaining ILN Other Reinsurance Total Remaining 2015 & 2016 $ 16,329,165 $ 4,411,094 $ 216,480 $ — $ 216,480 $ 207,787 2017 15,856,384 4,052,481 242,123 165,167 (5) 407,290 218,838 2018 18,295,450 4,646,734 325,537 76,144 (6) 401,681 251,262 2019 (3) 22,137,416 5,643,954 495,889 55,102 (7) 550,991 215,509 2019 & 2020 (4) 48,570,459 12,141,563 399,159 — 399,159 465,690 Total $ 121,188,874 $ 30,895,826 $ 1,679,188 $ 296,413 $ 1,975,601 $ 1,359,086 _______________________________________________________________________________ (3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019. (4) Reinsurance coverage on new insurance written from September 1, 2019 through July 31, 2020. (5) Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd. (6) Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd. (7) Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd. |
Schedule of VIE assets and total maximum exposure to loss | The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivatives, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trusts, each as of December 31, 2020: Maximum Exposure to Loss (In thousands) Total VIE Assets On - Balance Sheet Off - Balance Sheet Total Radnor Re 2018-1 Ltd. $ 242,123 $ 462 $ 32 $ 494 Radnor Re 2019-1 Ltd. 325,537 (2,071) 56 (2,015) Radnor Re 2019-2 Ltd. 216,480 (1,509) 26 (1,483) Radnor Re 2020-1 Ltd. 495,889 (1,046) 123 (923) Radnor Re 2020-2 Ltd. 399,159 (181) 109 (72) Total $ 1,679,188 $ (4,345) $ 346 $ (3,999) |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
Schedule of reconciliation of beginning and ending reserve balances for losses and loss adjustment expenses (LAE) | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses ("LAE") for the years ended December 31: ($ in thousands) 2020 2019 2018 Reserve for losses and LAE at beginning of year $ 69,362 $ 49,464 $ 46,850 Less: Reinsurance recoverables 71 — — Net reserve for losses and LAE at beginning of year 69,291 49,464 46,850 Add provision for losses and LAE, net of reinsurance, occurring in: Current year 317,516 50,562 36,438 Prior years (16,223) (17,576) (24,863) Net incurred losses and LAE during the current year 301,293 32,986 11,575 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current year 1,018 1,288 1,310 Prior years 13,686 11,871 7,651 Net loss and LAE payments during the current year 14,704 13,159 8,961 Net reserve for losses and LAE at end of year 355,880 69,291 49,464 Plus: Reinsurance recoverables 19,061 71 — Reserve for losses and LAE at end of year $ 374,941 $ 69,362 $ 49,464 Loans in default at end of year 31,469 5,947 4,024 The following table summarizes incurred loss and allocated loss adjustment expense development, IBNR plus expected development on reported defaults and the cumulative number of reported defaults. The information about incurred loss development for the years ended December 31, 2011 to 2019 is presented as supplementary information. Incurred Loss and Allocated LAE, As of December 31, 2020 ($ in thousands) Total of IBNR plus Expected Development on Reported Defaults Cumulative Number of Reported Defaults (1) Unaudited Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ 57 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 1 2012 1,523 858 814 781 748 809 808 808 808 — 19 2013 2,986 2,461 2,008 1,997 2,060 2,058 2,058 2,058 — 51 2014 6,877 4,312 3,323 2,984 2,930 2,897 2,882 1 92 2015 14,956 9,625 8,893 8,439 8,461 8,323 18 214 2016 21,889 11,890 9,455 9,219 8,972 45 252 2017 38,178 16,261 12,202 11,488 85 365 2018 36,438 23,168 19,536 424 606 2019 50,562 39,085 2,151 1,551 2020 317,516 23,023 29,834 Total $ 410,668 (1) Cumulative number of reported defaults includes cumulative paid claims plus loans in default by accident year as of December 31, 2020. The following table summarizes cumulative paid losses and allocated loss adjustment expenses, net of reinsurance. The information about paid loss development for the years ended December 31, 2011 through 2019 is presented as supplementary information. ($ in thousands) Cumulative Paid Losses and Allocated LAE Unaudited Accident Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — 2012 24 535 659 665 665 808 808 808 808 2013 239 928 1,501 1,775 1,880 2,058 2,058 2,058 2014 138 1,587 2,463 2,787 2,897 2,882 2,867 2015 544 3,610 6,960 7,535 7,961 8,055 2016 927 4,896 6,947 7,864 8,270 2017 633 5,370 9,156 10,257 2018 1,310 8,067 13,406 2019 1,288 8,049 2020 1,018 Total $ 54,788 All outstanding liabilities before 2011, net of reinsurance — Reserve for losses and LAE, net of reinsurance $ 355,880 The following table provides a reconciliation of the net incurred losses and paid claims development tables above to the reserve for losses and LAE at December 31, 2020: ($ in thousands) December 31, 2020 Reserve for losses and LAE, net of reinsurance $ 355,880 Reinsurance recoverables on unpaid claims 19,061 Total gross reserve for losses and LAE $ 374,941 For our mortgage insurance portfolio, our average annual payout of losses as of December 31, 2020 is as follows: Average Annual Percentage Payout of Incurred Losses and Allocated LAE by Year Year 1 2 3 4 5 6 7 8 9 Average Payout 6 % 40 % 28 % 9 % 4 % 7 % 0 % 0 % 0 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease cost and other information | The following table presents lease cost and other lease information as of and for the years ended December 31: Year Ended December 31, ($ in thousands) 2020 2019 Lease cost: Operating lease cost $ 2,532 $ 2,479 Short-term lease cost 19 101 Sublease income (131) (129) Total lease cost $ 2,420 $ 2,451 Other information: Weighted average remaining lease term - operating leases 3.8 years 4.8 years Weighted average discount rate - operating leases 3.9 % 4.0 % |
Schedule of lease liability maturity | The following table presents a maturity analysis of our lease liabilities as follows at December 31, 2020: Year Ended December 31 (In thousands) 2021 $ 3,261 2022 3,309 2023 3,017 2024 1,334 2025 793 2026 and thereafter — Total lease payments to be paid 11,714 Less: Future interest expense (864) Present value of lease liabilities $ 10,850 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of dividends declared and paid | In each subsequent quarter, we declared and paid quarterly cash dividends on our common shares. The following table presents the amounts declared and paid per common share each quarter: Quarter Ended 2020 2019 March 31 $ 0.16 $ — June 30 0.16 — September 30 0.16 0.15 December 31 0.16 0.15 Total dividends per common share declared and paid $ 0.64 $ 0.30 In February 2021, the Board of Directors declared a quarterly cash dividend of $0.16 per common share payable on March 19, 2021, to shareholders of record on March 10, 2021. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of portion of nonvested common shares earned based upon achievement of compounded annual book value per share growth | The portion of the nonvested performance-based share awards that will be earned based upon the achievement of compounded annual book value per share growth is as follows: 2017 Performance-Based Grants 2016 Performance-Based Grants 2013, 2014 and 2015 Performance-Based Grants Performance Compounded Nonvested Compounded Nonvested Compounded Nonvested <16 % 0 % <13 % 0 % <11 % 0 % Threshold 16 % 25 % 13 % 25 % 11 % 10 % 17 % 50 % 14 % 50 % 12 % 36 % 18 % 75 % 15 % 75 % 13 % 61 % 14 % 87 % Maximum ≥19 % 100 % ≥16 % 100 % ≥15 % 100 % 2020 Performance-Based Grants 2019 Performance-Based Grants 2018 Performance-Based Grants Performance Compounded Nonvested Compounded Nonvested Compounded Nonvested <13 % 0 % <14 % 0 % <15 % 0 % Threshold 13 % 10 % 14 % 10 % 15 % 25 % 14 % 35 % 15 % 35 % 16 % 50 % 15 % 60 % 16 % 60 % 17 % 75 % 16 % 85 % 17 % 85 % Maximum ≥17 % 100 % ≥18 % 100 % ≥18 % 100 % |
Summary of nonvested common share and nonvested common share unit activity | The following tables summarize nonvested common share, nonvested common share unit and DEU activity for the year ended December 31: 2020 Time and Performance- Time-Based Share Units DEUs (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Dividend Equivalent Units Weighted Outstanding at beginning of year 394 $ 42.02 169 $ 41.31 351 $ 39.78 5 $ 51.11 Granted 109 51.52 69 51.52 350 48.75 19 35.42 Vested (140) 36.29 (85) 40.47 (192) 37.76 (3) 49.79 Forfeited — N/A — N/A (17) 50.04 — 33.86 Outstanding at end of year 363 $ 47.09 153 $ 46.34 492 $ 46.59 21 $ 37.66 2019 Time and Performance- Time-Based Share Units DEUs (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Dividend Equivalent Units Weighted Outstanding at beginning of year 482 $ 29.49 207 $ 32.82 449 $ 34.35 — N/A Granted 141 45.32 90 40.98 143 42.08 5 $ 51.09 Vested (229) 17.69 (128) 27.37 (232) 30.85 — 48.63 Forfeited — N/A — N/A (9) 35.53 — 49.27 Outstanding at end of year 394 $ 42.02 169 $ 41.31 351 $ 39.78 5 $ 51.11 2018 Time and Performance- Time-Based Share Units (Shares in thousands) Number of Weighted Number of Weighted Number of Weighted Outstanding at beginning of year 1,595 $ 17.03 410 $ 21.12 536 $ 29.13 Granted 113 45.02 73 45.02 161 42.19 Vested (1,226) 14.71 (276) 18.67 (238) 28.02 Forfeited — N/A — N/A (10) 31.59 Outstanding at end of year 482 $ 29.49 207 $ 32.82 449 $ 34.35 |
Schedule of compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares | Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares and share units were as follows for the years ended December 31: (In thousands) 2020 2019 2018 Compensation expense $ 18,462 $ 16,588 $ 15,073 Income tax benefit 3,511 3,125 2,805 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | Income tax expense which is generated in the U.S. consists of the following components for the years ended December 31: (In thousands) 2020 2019 2018 Current $ 38,402 $ 43,867 $ 28,644 Deferred 38,653 59,481 50,692 Total income tax expense $ 77,055 $ 103,348 $ 79,336 |
Schedule of reconciliation of difference between income tax expense and expected tax provision at weighted average tax rate | The reconciliation of the difference between income tax expense and the expected tax provision at the weighted average tax rate was as follows for the years ended December 31: 2020 2019 2018 ($ in thousands) $ % of pretax $ % of pretax $ % of pretax Tax provision at weighted average statutory rates $ 75,763 15.5 % $ 104,213 15.8 % $ 87,815 16.1 % Non-deductible expenses 2,482 0.5 2,595 0.4 1,483 0.3 Tax exempt interest, net of proration (1,462) (0.3) (1,541) (0.2) (1,741) (0.3) Excess tax benefits from stock-based compensation (599) (0.1) (1,997) (0.3) (9,644) (1.8) Other 871 0.1 78 0.0 1,423 0.2 Total income tax expense $ 77,055 15.7 % $ 103,348 15.7 % $ 79,336 14.5 % |
Schedule of net deferred tax (liability) asset and components | The net deferred tax liability was comprised of the following at December 31: (In thousands) 2020 2019 Deferred tax assets $ 29,577 $ 29,392 Deferred tax liabilities (334,686) (279,012) Net deferred tax liability $ (305,109) $ (249,620) The components of the net deferred tax liability were as follows at December 31: (In thousands) 2020 2019 Contingency reserves $ (300,281) $ (261,855) Unrealized (gain) loss on investments (30,050) (13,214) Unearned premium reserve 15,192 16,641 Accrued expenses 4,202 3,391 Deferred policy acquisition costs (3,571) (3,298) Unearned ceding commissions 2,951 3,227 Loss reserves 2,529 416 Nonvested shares 1,767 2,426 Start-up expenditures, net 1,137 1,410 Change in fair market value of derivatives 912 370 Fixed assets 880 1,502 Investments in limited partnerships (561) (400) Prepaid expenses (129) (132) Loss reserves - TCJA transition adjustment (94) (113) Organizational expenditures 7 9 Net deferred tax liability $ (305,109) $ (249,620) |
Earnings per Share (EPS) (Table
Earnings per Share (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of net income and weighted average common shares outstanding used in computations of basic and diluted earnings per common share | The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share for the years ended December 31: (In thousands, except per share amounts) 2020 2019 2018 Net income $ 413,041 $ 555,713 $ 467,363 Basic weighted average shares outstanding 106,098 97,762 97,403 Dilutive effect of nonvested shares 278 465 571 Diluted weighted average shares outstanding 106,376 98,227 97,974 Basic earnings per share $ 3.89 $ 5.68 $ 4.80 Diluted earnings per share $ 3.88 $ 5.66 $ 4.77 |
Disclosure of share-based compensation arrangements by share-based payment award | Based on the compounded annual book value per share growth as of December 31, 2020, the following percentages of the performance-based share awards would be issuable under the terms of the arrangements if December 31, 2020 was the end of the contingency period: 2018 Performance-Based Grants 100 % 2019 Performance-Based Grants 100 % 2020 Performance-Based Grants 25 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Rollforward of accumulated other comprehensive income (loss) | The following table shows the rollforward of accumulated other comprehensive income (loss) for the year ended December 31: 2020 2019 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of year $ 69,401 $ (13,214) $ 56,187 $ (33,276) $ 4,283 $ (28,993) Other comprehensive income (loss): Unrealized holding gains (losses) on investments: Unrealized holding gains arising during the year 101,620 (17,286) 84,334 105,906 (17,995) 87,911 Less: Reclassification adjustment for gains included in net income (1) (2,697) 450 (2,247) (3,229) 498 (2,731) Net unrealized gains on investments 98,923 (16,836) 82,087 102,677 (17,497) 85,180 Other comprehensive gain 98,923 (16,836) 82,087 102,677 (17,497) 85,180 Balance at end of year $ 168,324 $ (30,050) $ 138,274 $ 69,401 $ (13,214) $ 56,187 _______________________________________________________________________________ (1) Included in net realized investments gains on our consolidated statements of comprehensive income. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair vale on a recurring basis | All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis. December 31, 2020 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 268,444 $ — $ — $ 268,444 U.S. agency securities — 18,085 — 18,085 U.S. agency mortgage-backed securities — 995,905 — 995,905 Municipal debt securities — 551,517 — 551,517 Non-U.S. government securities — 61,607 — 61,607 Corporate debt securities — 1,126,512 — 1,126,512 Residential and commercial mortgage securities — 409,282 — 409,282 Asset-backed securities — 454,717 — 454,717 Money market funds 679,304 — — 679,304 Total assets at fair value (1) $ 947,748 $ 3,617,625 $ — $ 4,565,373 December 31, 2019 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 242,206 $ — $ — $ 242,206 U.S. agency securities — 33,605 — 33,605 U.S. agency mortgage-backed securities — 848,334 — 848,334 Municipal debt securities — 361,638 — 361,638 Non-U.S. government securities — 54,995 — 54,995 Corporate debt securities — 880,301 — 880,301 Residential and commercial mortgage securities — 288,281 — 288,281 Asset-backed securities — 326,025 — 326,025 Money market funds 315,362 — — 315,362 Total assets at fair value (1) $ 557,568 $ 2,793,179 $ — $ 3,350,747 _______________________________________________________________________________ (1) Does not include the fair value of embedded derivatives, which we have accounted for separately as freestanding derivatives and included in other assets or other accrued liabilities in our consolidated balance sheet. See Note 5 for more information. |
Statutory Accounting (Tables)
Statutory Accounting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Schedule of statutory net income, statutory surplus and contingency reserve liability | The following table presents Essent Guaranty’s and Essent PA’s statutory net income, statutory surplus and contingency reserve liability as of and for the years ended December 31: (In thousands) 2020 2019 2018 Essent Guaranty Statutory net income $ 312,091 $ 443,675 $ 379,119 Statutory surplus 1,048,878 1,032,416 872,105 Contingency reserve liability 1,499,782 1,197,279 916,568 Essent PA Statutory net income $ 4,560 $ 8,073 $ 9,306 Statutory surplus 54,354 52,936 49,336 Contingency reserve liability 56,032 52,957 48,545 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of unaudited quarterly results of operations | The following table summarizes the unaudited results of operations for each quarter of 2020 and 2019. 2020 (In thousands, except per share amounts) December 31 September 30 June 30 March 31 Net premiums earned $ 222,339 $ 222,258 $ 211,471 $ 206,496 Other revenues 24,860 20,780 24,606 22,344 Provision for losses and LAE 62,073 55,280 175,877 8,063 Other underwriting and operating expenses 36,825 37,100 38,819 41,947 Interest expense 2,149 2,227 2,566 2,132 Income before income taxes 146,152 148,431 18,815 176,698 Net income 123,602 124,536 15,380 149,523 Basic earnings per common share $ 1.10 $ 1.11 $ 0.15 $ 1.53 Diluted earnings per common share $ 1.10 $ 1.11 $ 0.15 $ 1.52 Basic weighted average shares outstanding 111,908 111,908 102,500 97,949 Diluted weighted average shares outstanding 112,310 112,134 102,605 98,326 2019 (In thousands, except per share amounts) December 31 September 30 June 30 March 31 Net premiums earned $ 207,671 $ 203,473 $ 188,490 $ 177,791 Other revenues 21,091 22,914 23,402 22,735 Provision for losses and LAE 10,929 9,990 4,960 7,107 Other underwriting and operating expenses 41,231 41,588 41,520 41,030 Interest expense 2,218 2,584 2,679 2,670 Income before income taxes 174,384 172,225 162,733 149,719 Net income 146,958 144,630 136,405 127,720 Basic earnings per common share $ 1.50 $ 1.48 $ 1.39 $ 1.31 Diluted earnings per common share $ 1.49 $ 1.47 $ 1.39 $ 1.30 Basic weighted average shares outstanding 97,830 97,822 97,798 97,595 Diluted weighted average shares outstanding 98,376 98,257 98,170 98,104 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) - state | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Residential mortgage down payment percentage for which mortgage insurance is generally required (less than) | 20.00% | |
Essent Guaranty | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Number of states in which the entity is licensed to write mortgage insurance | 50 | |
Affiliated Entity | Essent Re | Quota share reinsurance | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Reinsurance percentage | 25.00% | |
Affiliated Entity | Essent PA | Reinsurance for mortgage insurance coverage in excess of 25% | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Reinsurance for mortgage insurance coverage threshold | 25.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Long-Lived Assets | ||
Cost | $ 67,354 | $ 64,908 |
Accumulated Depreciation/ Amortization | $ (60,967) | (57,639) |
Furniture and fixtures | ||
Long-Lived Assets | ||
Estimated useful lives | 5 years | |
Cost | $ 2,220 | 2,148 |
Accumulated Depreciation/ Amortization | $ (2,068) | (2,017) |
Equipment, computer hardware and purchased software | Minimum | ||
Long-Lived Assets | ||
Estimated useful lives | 2 years | |
Equipment, computer hardware and purchased software | Maximum | ||
Long-Lived Assets | ||
Estimated useful lives | 3 years | |
Office equipment | ||
Long-Lived Assets | ||
Cost | $ 848 | 848 |
Accumulated Depreciation/ Amortization | (772) | (700) |
Computer hardware | ||
Long-Lived Assets | ||
Cost | 10,282 | 9,764 |
Accumulated Depreciation/ Amortization | (8,987) | (7,728) |
Purchased software | ||
Long-Lived Assets | ||
Cost | 38,434 | 37,909 |
Accumulated Depreciation/ Amortization | $ (37,404) | (36,716) |
Costs of internal-use software | ||
Long-Lived Assets | ||
Estimated useful lives | 3 years | |
Cost | $ 10,783 | 9,595 |
Accumulated Depreciation/ Amortization | (8,959) | (8,185) |
Leasehold improvements | ||
Long-Lived Assets | ||
Cost | 4,787 | 4,644 |
Accumulated Depreciation/ Amortization | $ (2,777) | $ (2,293) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Policy Acquisition Costs | |||
Policy acquisition costs deferred | $ 10.1 | $ 7.8 | $ 7.4 |
Other underwriting and operating expenses | |||
Deferred Policy Acquisition Costs | |||
Amortization of deferred policy acquisition costs | $ 8.8 | $ 8.1 | $ 6.7 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Insurance Premium Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Earned premiums from mortgage guaranty insurance monthly policies as a percentage of total earned premiums | 84.00% | |
Threshold coverage period for single premium primary mortgage insurance policies (more than) | 1 year | |
Unearned single premium recognized as earned upon notice of policy cancellation due to repayment of insured loan by borrower | $ 88.9 | $ 42.5 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Reserve for Losses and Loss Adjustment Expense and Premium Deficiency Reserve (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)payment | Dec. 31, 2019USD ($) | |
Reserve for Losses and Loss Adjustment Expenses | ||
Number of consecutive missed loan payments by borrower for classification of insured loan as in default | payment | 2 | |
Premium Deficiency Reserve | ||
Premium deficiency reserve | $ | $ 0 | $ 0 |
Investments - Summary of Availa
Investments - Summary of Available for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 4,404,690 | $ 3,282,585 |
Unrealized Gains | 164,423 | 74,231 |
Unrealized Losses | (3,740) | (6,069) |
Fair Value | 4,565,373 | 3,350,747 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 259,378 | 239,087 |
Unrealized Gains | 9,088 | 3,526 |
Unrealized Losses | (22) | (407) |
Fair Value | 268,444 | 242,206 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 17,930 | 33,620 |
Unrealized Gains | 155 | 36 |
Unrealized Losses | 0 | (51) |
Fair Value | 18,085 | 33,605 |
U.S. agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 963,670 | 836,710 |
Unrealized Gains | 33,205 | 13,956 |
Unrealized Losses | (970) | (2,332) |
Fair Value | 995,905 | 848,334 |
Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 513,870 | 339,511 |
Unrealized Gains | 37,662 | 22,245 |
Unrealized Losses | (15) | (118) |
Fair Value | 551,517 | 361,638 |
Non-U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 56,045 | 52,230 |
Unrealized Gains | 5,562 | 2,812 |
Unrealized Losses | 0 | (47) |
Fair Value | 61,607 | 54,995 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,070,027 | 856,638 |
Unrealized Gains | 56,864 | 24,255 |
Unrealized Losses | (379) | (592) |
Fair Value | 1,126,512 | 880,301 |
Residential and commercial mortgage securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 391,921 | 282,840 |
Unrealized Gains | 18,641 | 6,542 |
Unrealized Losses | (1,280) | (1,101) |
Fair Value | 409,282 | 288,281 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 452,527 | 326,589 |
Unrealized Gains | 3,246 | 857 |
Unrealized Losses | (1,056) | (1,421) |
Fair Value | 454,717 | 326,025 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 679,322 | 315,360 |
Unrealized Gains | 0 | 2 |
Unrealized Losses | (18) | 0 |
Fair Value | $ 679,304 | $ 315,362 |
Investments - Summary of Munici
Investments - Summary of Municipal Debt Securities and Corporate Debt Securities (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 100.00% | 100.00% |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 100.00% | 100.00% |
Special revenue bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 76.80% | 74.50% |
General obligation bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 20.30% | 21.30% |
Certificate of participation bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 2.30% | 3.40% |
Tax allocation bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 0.60% | 0.80% |
Financial | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 34.90% | 34.40% |
Consumer, non-cyclical | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 19.10% | 20.10% |
Communications | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 9.30% | 10.30% |
Energy | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 8.20% | 8.30% |
Consumer, cyclical | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 8.00% | 7.60% |
Technology | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 6.10% | 4.80% |
Utilities | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 5.90% | 6.20% |
Industrial | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 5.30% | 4.20% |
Basic materials | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 3.10% | 4.10% |
Government | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 0.10% | 0.00% |
Investments - Summary of Avai_2
Investments - Summary of Available For Sale Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Amortized Cost | $ 4,404,690 | $ 3,282,585 |
Fair Value | ||
Fair Value | 4,565,373 | 3,350,747 |
U.S. Treasury securities | ||
Amortized Cost | ||
Due in 1 year | 78,956 | |
Due after 1 but within 5 years | 130,312 | |
Due after 5 but within 10 years | 49,125 | |
Due after 10 years | 985 | |
Subtotal | 259,378 | |
Amortized Cost | 259,378 | 239,087 |
Fair Value | ||
Due in 1 year | 79,335 | |
Due after 1 but within 5 years | 134,802 | |
Due after 5 but within 10 years | 53,165 | |
Due after 10 years | 1,142 | |
Subtotal | 268,444 | |
Fair Value | 268,444 | 242,206 |
U.S. agency securities | ||
Amortized Cost | ||
Due in 1 year | 8,906 | |
Due after 1 but within 5 years | 9,024 | |
Subtotal | 17,930 | |
Amortized Cost | 17,930 | 33,620 |
Fair Value | ||
Due in 1 year | 8,958 | |
Due after 1 but within 5 years | 9,127 | |
Subtotal | 18,085 | |
Fair Value | 18,085 | 33,605 |
Municipal debt securities | ||
Amortized Cost | ||
Due in 1 year | 6,881 | |
Due after 1 but within 5 years | 91,122 | |
Due after 5 but within 10 years | 235,030 | |
Due after 10 years | 180,837 | |
Subtotal | 513,870 | |
Amortized Cost | 513,870 | 339,511 |
Fair Value | ||
Due in 1 year | 6,892 | |
Due after 1 but within 5 years | 95,567 | |
Due after 5 but within 10 years | 254,387 | |
Due after 10 years | 194,671 | |
Subtotal | 551,517 | |
Fair Value | 551,517 | 361,638 |
Non-U.S. government securities | ||
Amortized Cost | ||
Due in 1 year | 0 | |
Due after 1 but within 5 years | 22,710 | |
Due after 5 but within 10 years | 24,246 | |
Due after 10 years | 9,089 | |
Subtotal | 56,045 | |
Amortized Cost | 56,045 | 52,230 |
Fair Value | ||
Due in 1 year | 0 | |
Due after 1 but within 5 years | 24,257 | |
Due after 5 but within 10 years | 27,680 | |
Due after 10 years | 9,670 | |
Subtotal | 61,607 | |
Fair Value | 61,607 | 54,995 |
Corporate debt securities | ||
Amortized Cost | ||
Due in 1 year | 148,292 | |
Due after 1 but within 5 years | 576,987 | |
Due after 5 but within 10 years | 322,649 | |
Due after 10 years | 22,099 | |
Subtotal | 1,070,027 | |
Amortized Cost | 1,070,027 | 856,638 |
Fair Value | ||
Due in 1 year | 149,617 | |
Due after 1 but within 5 years | 602,286 | |
Due after 5 but within 10 years | 350,632 | |
Due after 10 years | 23,977 | |
Subtotal | 1,126,512 | |
Fair Value | 1,126,512 | 880,301 |
U.S. agency mortgage-backed securities | ||
Amortized Cost | ||
Amortized Cost | 963,670 | 836,710 |
Fair Value | ||
Fair Value | 995,905 | 848,334 |
Residential and commercial mortgage securities | ||
Amortized Cost | ||
Amortized Cost | 391,921 | 282,840 |
Fair Value | ||
Fair Value | 409,282 | 288,281 |
Asset-backed securities | ||
Amortized Cost | ||
Amortized Cost | 452,527 | 326,589 |
Fair Value | ||
Fair Value | 454,717 | 326,025 |
Money market funds | ||
Amortized Cost | ||
Amortized Cost | 679,322 | 315,360 |
Fair Value | ||
Fair Value | $ 679,304 | $ 315,362 |
Investments - Summary of Realiz
Investments - Summary of Realized Gain and Loss and Investments in Unrealized Loss Position (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||
Realized gross gains | $ 5,608,000 | $ 5,238,000 | $ 2,201,000 |
Realized gross losses | 2,482,000 | 1,746,000 | 883,000 |
Fair Value | |||
Less than 12 months | 614,451,000 | 372,179,000 | |
12 months or more | 78,420,000 | 310,585,000 | |
Total | 692,871,000 | 682,764,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (2,618,000) | (3,369,000) | |
12 months or more | (1,122,000) | (2,700,000) | |
Total | $ (3,740,000) | $ (6,069,000) | |
Other Information | |||
Number of investment securities in unrealized loss position | security | 363 | 365 | |
Other-than-temporary impairment | $ 400,000 | $ 300,000 | $ 0 |
Other invested assets | 88,904,000 | 78,873,000 | |
Fair value of investments deposited with insurance regulatory authorities to meet statutory requirements | $ 9,700,000 | 9,400,000 | |
Internal Investment Grade | Securities | Credit Concentration Risk | |||
Other Information | |||
Concentration risk, percentage | 98.00% | ||
Essent Re | |||
Other Information | |||
Fair value of the required investments on deposit in trusts | $ 1,100,000,000 | 805,500,000 | |
Essent Guaranty | |||
Other Information | |||
Assets on deposit under reinsurance agreement | 8,500,000 | 6,400,000 | |
Assets on deposit for the benefit of the sponsor | 12,000,000 | 6,400,000 | |
U.S. Treasury securities | |||
Fair Value | |||
Less than 12 months | 28,776,000 | 29,013,000 | |
12 months or more | 0 | 42,981,000 | |
Total | 28,776,000 | 71,994,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (22,000) | (331,000) | |
12 months or more | 0 | (76,000) | |
Total | (22,000) | (407,000) | |
U.S. agency securities | |||
Fair Value | |||
Less than 12 months | 0 | ||
12 months or more | 25,605,000 | ||
Total | 25,605,000 | ||
Gross Unrealized Losses | |||
Less than 12 months | 0 | ||
12 months or more | (51,000) | ||
Total | (51,000) | ||
U.S. agency mortgage-backed securities | |||
Fair Value | |||
Less than 12 months | 152,671,000 | 101,684,000 | |
12 months or more | 3,007,000 | 113,866,000 | |
Total | 155,678,000 | 215,550,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (924,000) | (1,042,000) | |
12 months or more | (46,000) | (1,290,000) | |
Total | (970,000) | (2,332,000) | |
Municipal debt securities | |||
Fair Value | |||
Less than 12 months | 3,838,000 | 10,651,000 | |
12 months or more | 0 | 624,000 | |
Total | 3,838,000 | 11,275,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (15,000) | (112,000) | |
12 months or more | 0 | (6,000) | |
Total | (15,000) | (118,000) | |
Non-U.S. government securities | |||
Fair Value | |||
Less than 12 months | 9,664,000 | ||
12 months or more | 0 | ||
Total | 9,664,000 | ||
Gross Unrealized Losses | |||
Less than 12 months | (47,000) | ||
12 months or more | 0 | ||
Total | (47,000) | ||
Corporate debt securities | |||
Fair Value | |||
Less than 12 months | 141,803,000 | 83,013,000 | |
12 months or more | 0 | 14,531,000 | |
Total | 141,803,000 | 97,544,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (379,000) | (576,000) | |
12 months or more | 0 | (16,000) | |
Total | (379,000) | (592,000) | |
Residential and commercial mortgage securities | |||
Fair Value | |||
Less than 12 months | 63,203,000 | 59,341,000 | |
12 months or more | 9,516,000 | 3,442,000 | |
Total | 72,719,000 | 62,783,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (777,000) | (1,059,000) | |
12 months or more | (503,000) | (42,000) | |
Total | (1,280,000) | (1,101,000) | |
Asset-backed securities | |||
Fair Value | |||
Less than 12 months | 124,165,000 | 78,813,000 | |
12 months or more | 65,897,000 | 109,536,000 | |
Total | 190,062,000 | 188,349,000 | |
Gross Unrealized Losses | |||
Less than 12 months | (483,000) | (202,000) | |
12 months or more | (573,000) | (1,219,000) | |
Total | (1,056,000) | $ (1,421,000) | |
Money market funds | |||
Fair Value | |||
Less than 12 months | 99,995,000 | ||
12 months or more | 0 | ||
Total | 99,995,000 | ||
Gross Unrealized Losses | |||
Less than 12 months | (18,000) | ||
12 months or more | 0 | ||
Total | $ (18,000) |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of net investment income | |||
Gross investment income | $ 84,982 | $ 87,243 | $ 66,926 |
Investment expenses | (4,895) | (3,701) | (2,835) |
Net investment income | 80,087 | 83,542 | 64,091 |
Fixed maturities | |||
Components of net investment income | |||
Gross investment income | 83,313 | 82,194 | 63,053 |
Short-term investments | |||
Components of net investment income | |||
Gross investment income | $ 1,669 | $ 5,049 | $ 3,873 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable | |||
Premiums receivable | $ 46,974,000 | $ 39,084,000 | |
Other receivables | 3,166,000 | 1,571,000 | |
Total accounts receivable | 50,140,000 | 40,655,000 | |
Less: Allowance for doubtful accounts | 0 | 0 | |
Accounts receivable, net | 50,140,000 | 40,655,000 | |
Provision for doubtful accounts | $ 0 | $ 0 | $ 0 |
Premiums receivable | |||
Accounts Receivable | |||
Threshold period unpaid for write-off of mortgage insurance premiums (more than) | 90 days |
Reinsurance - Effect on Net Pre
Reinsurance - Effect on Net Premiums Written and Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net premiums written: | |||||||||||
Direct | $ 922,851 | $ 796,344 | $ 696,055 | ||||||||
Ceded | (88,738) | (35,499) | (10,768) | ||||||||
Net premiums written | 834,113 | 760,845 | 685,287 | ||||||||
Net premiums earned: | |||||||||||
Direct | 951,302 | 812,924 | 660,260 | ||||||||
Ceded | (88,738) | (35,499) | (10,768) | ||||||||
Net premiums earned | $ 222,339 | $ 222,258 | $ 211,471 | $ 206,496 | $ 207,671 | $ 203,473 | $ 188,490 | $ 177,791 | $ 862,564 | $ 777,425 | $ 649,492 |
Reinsurance - Quota Share Reins
Reinsurance - Quota Share Reinsurance (Details) - Quota Share Reinsurance - USD ($) $ in Billions | Sep. 01, 2019 | Dec. 31, 2022 | Dec. 31, 2020 |
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Net [Abstract] | |||
Ceded premiums earned related to percent of risk on eligible single premium policies | 40.00% | ||
Ceded premiums earned related to percent of risk on all other eligible policies written | 20.00% | ||
Ceding commission | 20.00% | ||
Profit commission, maximum | 60.00% | ||
Risk In force, ceded | $ 6.3 | ||
Forecast | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Net [Abstract] | |||
Profit commission, maximum | 63.00% |
Reinsurance - Excess of Loss Re
Reinsurance - Excess of Loss Reinsurance (Details) - Mortgage Insurance | 12 Months Ended |
Dec. 31, 2020 | |
Essent Guaranty | Radnor Re | Variable Interest Entity | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
Essent Guaranty | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
Radnor Re | Variable Interest Entity | Mortgage Insurance Linked Notes | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Reinsurance debt issued to cover insurance term | 10 years |
Reinsurance - Premium Details (
Reinsurance - Premium Details (Details) - 2017 | Dec. 31, 2020 |
Radnor Re 2018-1 Ltd. | |
Effects of Reinsurance [Line Items] | |
Risk margin increase after optional termination date | 50.00% |
Panel of Reinsurers | |
Effects of Reinsurance [Line Items] | |
Reinsurance premium increase after options termination date | 50.00% |
Reinsurance - Essent Guaranty's
Reinsurance - Essent Guaranty's Excess of Loss Reinsurance Coverages and Retentions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | $ 121,188,874 |
Remaining Risk in Force | 30,895,826 |
Remaining Reinsurance in Force | 1,975,601 |
Remaining First Layer Retention | 1,359,086 |
Radnor Entities | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 1,679,188 |
Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 296,413 |
2015 & 2016 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 16,329,165 |
Remaining Risk in Force | 4,411,094 |
Remaining Reinsurance in Force | 216,480 |
Remaining First Layer Retention | 207,787 |
2015 & 2016 | Radnor Re 2019-2 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 216,480 |
2015 & 2016 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 15,856,384 |
Remaining Risk in Force | 4,052,481 |
Remaining Reinsurance in Force | 407,290 |
Remaining First Layer Retention | 218,838 |
2017 | Radnor Re 2018-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 242,123 |
2017 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 165,167 |
2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 18,295,450 |
Remaining Risk in Force | 4,646,734 |
Remaining Reinsurance in Force | 401,681 |
Remaining First Layer Retention | 251,262 |
2018 | Radnor Re 2019-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 325,537 |
2018 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 76,144 |
2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 22,137,416 |
Remaining Risk in Force | 5,643,954 |
Remaining Reinsurance in Force | 550,991 |
Remaining First Layer Retention | 215,509 |
2019 | Radnor Re 2020-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 495,889 |
2019 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 55,102 |
2019 & 2020 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 48,570,459 |
Remaining Risk in Force | 12,141,563 |
Remaining Reinsurance in Force | 399,159 |
Remaining First Layer Retention | 465,690 |
2019 & 2020 | Radnor Re 2020-2 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 399,159 |
2019 & 2020 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | $ 0 |
Reinsurance - Summary of Total
Reinsurance - Summary of Total Assets and Maximum Exposure Loss (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Total VIE Assets | $ 5,202,724 | $ 3,873,425 |
Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 1,679,188 | |
Maximum exposure to loss, on - balance sheet | (4,345) | |
Maximum exposure to loss, off - balance sheet | 346 | |
Maximum exposure to loss, total | (3,999) | |
Radnor Re 2018-1 Ltd. | Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 242,123 | |
Maximum exposure to loss, on - balance sheet | 462 | |
Maximum exposure to loss, off - balance sheet | 32 | |
Maximum exposure to loss, total | 494 | |
Radnor Re 2019-1 Ltd. | Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 325,537 | |
Maximum exposure to loss, on - balance sheet | (2,071) | |
Maximum exposure to loss, off - balance sheet | 56 | |
Maximum exposure to loss, total | (2,015) | |
Radnor Re 2019-2 Ltd. | Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 216,480 | |
Maximum exposure to loss, on - balance sheet | (1,509) | |
Maximum exposure to loss, off - balance sheet | 26 | |
Maximum exposure to loss, total | (1,483) | |
Radnor Re 2020-1 Ltd. | Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 495,889 | |
Maximum exposure to loss, on - balance sheet | (1,046) | |
Maximum exposure to loss, off - balance sheet | 123 | |
Maximum exposure to loss, total | (923) | |
Radnor Re 2020-2 Ltd. | Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 399,159 | |
Maximum exposure to loss, on - balance sheet | (181) | |
Maximum exposure to loss, off - balance sheet | 109 | |
Maximum exposure to loss, total | $ (72) |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Reserve Balances for Losses and Loss Adjustment Expense (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020USD ($)loan | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)loan | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($) | |
Reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (LAE) | ||||||||||||
Reserve for losses and LAE at beginning of year | $ 69,362 | $ 49,464 | $ 69,362 | $ 49,464 | $ 46,850 | |||||||
Less: Reinsurance recoverables | $ 19,061 | $ 71 | 19,061 | 71 | 0 | $ 0 | ||||||
Net reserve for losses and LAE at beginning of year | 69,291 | 49,464 | 69,291 | 49,464 | 46,850 | |||||||
Add provision for losses and LAE, net of reinsurance, occurring in: | ||||||||||||
Current year | 317,516 | 50,562 | 36,438 | |||||||||
Prior years | (16,223) | (17,576) | (24,863) | |||||||||
Net incurred losses and LAE during the current year | 62,073 | $ 55,280 | $ 175,877 | $ 8,063 | 10,929 | $ 9,990 | $ 4,960 | $ 7,107 | 301,293 | 32,986 | 11,575 | |
Deduct payments for losses and LAE, net of reinsurance, occurring in: | ||||||||||||
Current year | 1,018 | 1,288 | 1,310 | |||||||||
Prior years | 13,686 | 11,871 | 7,651 | |||||||||
Net loss and LAE payments during the current year | 14,704 | 13,159 | 8,961 | |||||||||
Net reserve for losses and LAE at end of year | 355,880 | 69,291 | 355,880 | 69,291 | 49,464 | |||||||
Plus: Reinsurance recoverables | 19,061 | 71 | 19,061 | 71 | 0 | $ 0 | ||||||
Reserve for losses and LAE at end of year | $ 374,941 | $ 69,362 | $ 374,941 | $ 69,362 | $ 49,464 | |||||||
Loans in default at end of year | loan | 31,469 | 5,947 | 31,469 | 5,947 | 4,024 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018USD ($)loan | Sep. 30, 2020 | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Incurred claims and claim adjustment expenses | $ 13,686 | $ 11,871 | $ 7,651 | |||
Favorable prior year development | 16,223 | 17,576 | $ 24,863 | |||
Reserve for losses and LAE, for prior years | $ 39,400 | $ 20,000 | ||||
Loans in default at end of year | loan | 4,024 | 31,469 | 5,947 | 4,024 | ||
Reserve for losses and LAE | $ 49,464 | $ 374,941 | $ 69,362 | $ 49,464 | $ 46,850 | |
Hurricane | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Reserve for losses and LAE | $ 11,100 | |||||
Number of loans in hurricane impacted areas in default | loan | 2,288 | 2,288 | 2,288 | |||
Number of loans in hurricane impacted areas cured | loan | 2,150 | |||||
Reduction of reserves on hurricane-related defaults | $ 9,900 | |||||
COVID-19 | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Loans in default at end of year | loan | 28,922 | |||||
Reserve rate | 7.00% | |||||
Reserve for losses and LAE | $ 316,300 | |||||
Percent change used in calculation of expense | 1.00% | |||||
Effect of percentage point decrease on liability claim and claim expense adjustment expense | $ 35,000 |
Reserve for Losses and Loss A_5
Reserve for Losses and Loss Adjustment Expenses - Summary of Incurred Losses and Allocated Loss Adjustment Expense (Details) $ in Thousands | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 54,788 | |||||||||
All outstanding liabilities before 2011, net of reinsurance | 0 | |||||||||
Reserve for losses and LAE, net of reinsurance | 355,880 | $ 69,291 | $ 49,464 | $ 46,850 | ||||||
Less: Reinsurance recoverables | 19,061 | 71 | 0 | 0 | ||||||
Total gross reserve for losses and LAE | 374,941 | 69,362 | 49,464 | 46,850 | ||||||
Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 410,668 | |||||||||
2011 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 57 |
Total of IBNR plus expected development on reported defaults | $ 0 | |||||||||
Cumulative number of reported defaults | loan | 1 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | $ 0 |
2012 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 808 | 808 | 808 | 809 | 748 | 781 | 814 | 858 | 1,523 | |
Total of IBNR plus expected development on reported defaults | $ 0 | |||||||||
Cumulative number of reported defaults | loan | 19 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 808 | 808 | 808 | 808 | 665 | 665 | 659 | 535 | $ 24 | |
2013 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 2,058 | 2,058 | 2,058 | 2,060 | 1,997 | 2,008 | 2,461 | 2,986 | ||
Total of IBNR plus expected development on reported defaults | $ 0 | |||||||||
Cumulative number of reported defaults | loan | 51 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 2,058 | 2,058 | 2,058 | 1,880 | 1,775 | 1,501 | 928 | $ 239 | ||
2014 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 2,882 | 2,897 | 2,930 | 2,984 | 3,323 | 4,312 | 6,877 | |||
Total of IBNR plus expected development on reported defaults | $ 1 | |||||||||
Cumulative number of reported defaults | loan | 92 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 2,867 | 2,882 | 2,897 | 2,787 | 2,463 | 1,587 | $ 138 | |||
2015 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 8,323 | 8,461 | 8,439 | 8,893 | 9,625 | 14,956 | ||||
Total of IBNR plus expected development on reported defaults | $ 18 | |||||||||
Cumulative number of reported defaults | loan | 214 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 8,055 | 7,961 | 7,535 | 6,960 | 3,610 | $ 544 | ||||
2016 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 8,972 | 9,219 | 9,455 | 11,890 | 21,889 | |||||
Total of IBNR plus expected development on reported defaults | $ 45 | |||||||||
Cumulative number of reported defaults | loan | 252 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 8,270 | 7,864 | 6,947 | 4,896 | $ 927 | |||||
2017 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 11,488 | 12,202 | 16,261 | 38,178 | ||||||
Total of IBNR plus expected development on reported defaults | $ 85 | |||||||||
Cumulative number of reported defaults | loan | 365 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 10,257 | 9,156 | 5,370 | $ 633 | ||||||
2018 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 19,536 | 23,168 | 36,438 | |||||||
Total of IBNR plus expected development on reported defaults | $ 424 | |||||||||
Cumulative number of reported defaults | loan | 606 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 13,406 | 8,067 | $ 1,310 | |||||||
2019 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 39,085 | 50,562 | ||||||||
Total of IBNR plus expected development on reported defaults | $ 2,151 | |||||||||
Cumulative number of reported defaults | loan | 1,551 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 8,049 | $ 1,288 | ||||||||
2020 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred loss and allocated LAE, for the years ended December 31 | 317,516 | |||||||||
Total of IBNR plus expected development on reported defaults | $ 23,023 | |||||||||
Cumulative number of reported defaults | loan | 29,834 | |||||||||
Cumulative paid losses and allocated LAE for the years ended December 31 | $ 1,018 |
Reserve for Losses and Loss A_6
Reserve for Losses and Loss Adjustment Expenses - Summary of Average Annual Payout of Losses (Details) - Property Insurance Product Line | Dec. 31, 2020 |
Average Annual Percentage Payout of Incurred Losses and Allocated LAE by Year | |
Year 1 | 6.00% |
Year 2 | 40.00% |
Year 3 | 28.00% |
Year 4 | 9.00% |
Year 5 | 4.00% |
Year 6 | 7.00% |
Year 7 | 0.00% |
Year 8 | 0.00% |
Year 9 | 0.00% |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Oct. 14, 2020 | May 02, 2018 | Dec. 31, 2020 | Oct. 13, 2020 | Dec. 31, 2019 |
Credit Facility [Line Items] | ||||||
Credit facility expiration period | 3 years | |||||
Credit facility, maximum borrowing capacity | $ 775 | |||||
Amount outstanding, gross | $ 325 | $ 325 | $ 225 | |||
Weighted average interest rate during period | 2.19% | 2.19% | 3.51% | |||
Existing term loans | ||||||
Credit Facility [Line Items] | ||||||
Repayment | $ 225 | |||||
Revolving Credit Facility | ||||||
Credit Facility [Line Items] | ||||||
Repayment | $ 100 | |||||
Credit Facility | ||||||
Credit Facility [Line Items] | ||||||
Credit facility expiration period | 3 years | |||||
Committed capacity | $ 625 | |||||
Revolving Credit Facility | ||||||
Credit Facility [Line Items] | ||||||
Credit facility, maximum borrowing capacity | $ 300 | $ 275 | ||||
Credit facility, commitment fee rate | 0.35% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||
Renewal term (up to) | 10 years | ||
Operating lease right-of-use asset | $ 8,700 | $ 10,000 | |
Operating lease liabilities | $ 10,850 | $ 12,600 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:OtherAccruedLiabilitiesCurrentAndNoncurrent | |
Lease cost | $ 2,420 | $ 2,451 | |
Rent expense | $ 2,100 | ||
Minimum sublease rental income, due in 2021 | 100 | ||
Indemnifications related to contract underwriting services | |||
Loss Contingencies [Line Items] | |||
Amount paid for remedies (less than) | $ 100 | $ 100 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Lease Cost and Other Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease cost: | ||
Operating lease cost | $ 2,532 | $ 2,479 |
Short-term lease cost | 19 | 101 |
Sublease income | (131) | (129) |
Total lease cost | $ 2,420 | $ 2,451 |
Other information: | ||
Weighted average remaining lease term - operating leases | 3 years 9 months 18 days | 4 years 9 months 18 days |
Weighted average discount rate - operating leases | 3.90% | 4.00% |
Commitments and Contingencies-
Commitments and Contingencies- Schedule of Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 3,261 | |
2022 | 3,309 | |
2023 | 3,017 | |
2024 | 1,334 | |
2025 | 793 | |
2026 and thereafter | 0 | |
Total lease payments to be paid | 11,714 | |
Less: Future interest expense | (864) | |
Present value of lease liabilities | $ 10,850 | $ 12,600 |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)voteshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | |
Equity [Abstract] | ||||
Authorized share capital (in shares) | shares | 233,333 | 233,333 | ||
Number of votes per share | 1 | |||
Shareholder ownership threshold for voting rights | 9.50% | |||
Maximum number of votes per share for certain shareholders under 9.5% shareholder provision | 1 | |||
Minimum number of votes per share for other shareholders under 9.5% shareholder provision | 1 | |||
Common shares, issued (in shares) | shares | 13,800 | 112,423 | 98,394 | |
Share price (in dollars per share) | $ / shares | $ 33.25 | |||
Net proceeds from sale of stock | $ | $ 440,000 | $ 439,962 | $ 0 | $ 0 |
Capital Stock - Dividends (Deta
Capital Stock - Dividends (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 26, 2021 | Sep. 30, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||||||||||||
Quarterly cash dividends declared (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.15 | $ 0.15 | $ 0 | $ 0 | $ 0.64 | $ 0.30 | ||
Quarterly cash dividends paid (in dollars per share) | $ 0.15 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.15 | $ 0.15 | $ 0 | $ 0 | $ 0.64 | $ 0.30 | |
Subsequent Event | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Quarterly cash dividends declared (in dollars per share) | $ 0.16 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | 37 Months Ended | 61 Months Ended | |||||||
Feb. 26, 2021 | Jan. 31, 2020 | Jan. 31, 2017 | May 31, 2015 | Sep. 30, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | May 31, 2020 | Feb. 29, 2020 | Dec. 31, 2013 | |
Stock-based compensation | |||||||||||
Shares tendered by employees to pay employee withholding taxes (in shares) | 141,801 | 208,947 | 718,726 | ||||||||
Nonvested share units | |||||||||||
Stock-based compensation | |||||||||||
Granted (in shares) | 350,000 | 143,000 | 161,000 | ||||||||
Nonvested shares, share units or DEU | |||||||||||
Stock-based compensation | |||||||||||
Total fair value of shares vested | $ 18.5 | $ 25.5 | $ 75.9 | ||||||||
Nonvested shares or share units outstanding | |||||||||||
Stock-based compensation | |||||||||||
Total unrecognized compensation expense | $ 24.2 | ||||||||||
Expected weighted average period for recognition of expense | 1 year 9 months 18 days | ||||||||||
Time-Based Share Awards | Nonvested shares | |||||||||||
Stock-based compensation | |||||||||||
Granted (in shares) | 69,000 | 90,000 | 73,000 | ||||||||
Certain Senior Management | Nonvested shares | Subsequent Event | |||||||||||
Stock-based compensation | |||||||||||
Granted (in shares) | 373,552 | ||||||||||
Employee | Time-Based Share Awards | Nonvested share units | Incentive Program Bonus Award Fiscal Year Performance | |||||||||||
Stock-based compensation | |||||||||||
Vesting period | 3 years | 3 years | 3 years | ||||||||
Director | Time-Based Share Awards | Nonvested share units | Maximum | |||||||||||
Stock-based compensation | |||||||||||
Vesting period | 1 year | ||||||||||
Certain Employees | Nonvested share units | Subsequent Event | |||||||||||
Stock-based compensation | |||||||||||
Granted (in shares) | 86,058 | ||||||||||
2013 Plan | |||||||||||
Stock-based compensation | |||||||||||
Shares authorized (in shares) | 7,500,000 | ||||||||||
Number of share available for future grant (in shares) | 3,700,000 | ||||||||||
2013 Plan | Certain Senior Management | Time-Based Share Awards | Nonvested shares | |||||||||||
Stock-based compensation | |||||||||||
Vesting period | 4 years | 3 years | |||||||||
2013 Plan | Certain Senior Management | Vesting Based On Performance | Nonvested shares | |||||||||||
Stock-based compensation | |||||||||||
Vesting period | 3 years | ||||||||||
Performance period | 3 years | ||||||||||
2013 Plan | Employee | Time-Based Share Awards | Nonvested shares | |||||||||||
Stock-based compensation | |||||||||||
Vesting period | 4 years | ||||||||||
2013 Plan | Employee | Vesting Based On Performance | Nonvested shares | |||||||||||
Stock-based compensation | |||||||||||
Vesting period | 3 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Nonvested Performance-based Share Awards (Details) - Nonvested shares | 12 Months Ended |
Dec. 31, 2020 | |
2017 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 25.00% |
2017 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 17 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 17.00% |
Nonvested Common Shares Earned | 50.00% |
2017 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 18 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 18.00% |
Nonvested Common Shares Earned | 75.00% |
2017 Performance-Based Grants | Maximum | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 0.00% |
2017 Performance-Based Grants | Minimum | Compounded Annual Book Value Per Share Growth 19 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 19.00% |
Nonvested Common Shares Earned | 100.00% |
2016 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 13% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 13.00% |
Nonvested Common Shares Earned | 25.00% |
2016 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 14 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 14.00% |
Nonvested Common Shares Earned | 50.00% |
2016 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 15% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 15.00% |
Nonvested Common Shares Earned | 75.00% |
2016 Performance-Based Grants | Maximum | Compounded Annual Book Value Per Share Growth 13% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 13.00% |
Nonvested Common Shares Earned | 0.00% |
2016 Performance-Based Grants | Minimum | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 100.00% |
2013, 2014 and 2015 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 11% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 11.00% |
Nonvested Common Shares Earned | 10.00% |
2013, 2014 and 2015 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 12% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 12.00% |
Nonvested Common Shares Earned | 36.00% |
2013, 2014 and 2015 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 13% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 13.00% |
Nonvested Common Shares Earned | 61.00% |
2013, 2014 and 2015 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 14 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 14.00% |
Nonvested Common Shares Earned | 87.00% |
2013, 2014 and 2015 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Nonvested Common Shares Earned | 100.00% |
2013, 2014 and 2015 Performance-Based Grants | Maximum | Compounded Annual Book Value Per Share Growth 11% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 11.00% |
Nonvested Common Shares Earned | 0.00% |
2013, 2014 and 2015 Performance-Based Grants | Minimum | Compounded Annual Book Value Per Share Growth 15% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 15.00% |
Nonvested Common Shares Earned | 100.00% |
2020 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 13% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 13.00% |
Nonvested Common Shares Earned | 10.00% |
2020 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 14 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 14.00% |
Nonvested Common Shares Earned | 35.00% |
2020 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 15% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 15.00% |
Nonvested Common Shares Earned | 60.00% |
2020 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 85.00% |
2020 Performance-Based Grants | Maximum | Compounded Annual Book Value Per Share Growth 13% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 13.00% |
Nonvested Common Shares Earned | 0.00% |
2020 Performance-Based Grants | Minimum | Compounded Annual Book Value Per Share Growth 17 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 17.00% |
Nonvested Common Shares Earned | 100.00% |
2019 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 14 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 14.00% |
Nonvested Common Shares Earned | 10.00% |
2019 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 15% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 15.00% |
Nonvested Common Shares Earned | 35.00% |
2019 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 60.00% |
2019 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 17 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 17.00% |
Nonvested Common Shares Earned | 85.00% |
2019 Performance-Based Grants | Maximum | Compounded Annual Book Value Per Share Growth 14 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 14.00% |
Nonvested Common Shares Earned | 0.00% |
2019 Performance-Based Grants | Minimum | Compounded Annual Book Value Per Share Growth 18 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 18.00% |
Nonvested Common Shares Earned | 100.00% |
2018 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 15% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 15.00% |
Nonvested Common Shares Earned | 25.00% |
2018 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 16 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 50.00% |
2018 Performance-Based Grants | Compounded Annual Book Value Per Share Growth 17 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 17.00% |
Nonvested Common Shares Earned | 75.00% |
2018 Performance-Based Grants | Maximum | Compounded Annual Book Value Per Share Growth 15% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 15.00% |
Nonvested Common Shares Earned | 0.00% |
2018 Performance-Based Grants | Minimum | Compounded Annual Book Value Per Share Growth 18 % | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 18.00% |
Nonvested Common Shares Earned | 100.00% |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Nonvested Common Share and Common Share Unit Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Nonvested shares | Time and Performance- Based Share Awards | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 394 | 482 | 1,595 |
Granted (in shares) | 109 | 141 | 113 |
Vested (in shares) | (140) | (229) | (1,226) |
Forfeited (in shares) | 0 | 0 | 0 |
Outstanding at end of period (in shares) | 363 | 394 | 482 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 42.02 | $ 29.49 | $ 17.03 |
Granted (in dollars per share) | 51.52 | 45.32 | 45.02 |
Vested (in dollars per share) | 36.29 | 17.69 | 14.71 |
Outstanding at end of period (in dollars per share) | $ 47.09 | $ 42.02 | $ 29.49 |
Nonvested shares | Time-Based Share Awards | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 169 | 207 | 410 |
Granted (in shares) | 69 | 90 | 73 |
Vested (in shares) | (85) | (128) | (276) |
Forfeited (in shares) | 0 | 0 | 0 |
Outstanding at end of period (in shares) | 153 | 169 | 207 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 41.31 | $ 32.82 | $ 21.12 |
Granted (in dollars per share) | 51.52 | 40.98 | 45.02 |
Vested (in dollars per share) | 40.47 | 27.37 | 18.67 |
Outstanding at end of period (in dollars per share) | $ 46.34 | $ 41.31 | $ 32.82 |
Nonvested share units | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 351 | 449 | 536 |
Granted (in shares) | 350 | 143 | 161 |
Vested (in shares) | (192) | (232) | (238) |
Forfeited (in shares) | (17) | (9) | (10) |
Outstanding at end of period (in shares) | 492 | 351 | 449 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 39.78 | $ 34.35 | $ 29.13 |
Granted (in dollars per share) | 48.75 | 42.08 | 42.19 |
Vested (in dollars per share) | 37.76 | 30.85 | 28.02 |
Forfeited (in dollars per share) | 50.04 | 35.53 | 31.59 |
Outstanding at end of period (in dollars per share) | $ 46.59 | $ 39.78 | $ 34.35 |
DEU | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 5 | 0 | |
Granted (in shares) | 19 | 5 | |
Vested (in shares) | (3) | 0 | |
Forfeited (in shares) | 0 | 0 | |
Outstanding at end of period (in shares) | 21 | 5 | 0 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 51.11 | ||
Granted (in dollars per share) | 35.42 | $ 51.09 | |
Vested (in dollars per share) | 49.79 | 48.63 | |
Forfeited (in dollars per share) | 33.86 | 49.27 | |
Outstanding at end of period (in dollars per share) | $ 37.66 | $ 51.11 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Compensation Expense, Net of Forfeitures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Compensation expense | $ 18,462 | $ 16,588 | $ 15,073 |
Income tax benefit | $ 3,511 | $ 3,125 | $ 2,805 |
Dividends Restrictions (Details
Dividends Restrictions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Dividends Restrictions | |||
Dividends paid to parent company | $ 0 | $ 55,000,000 | $ 0 |
Total equity | 3,862,633,000 | 2,984,845,000 | 2,365,717,000 |
Essent Guaranty | |||
Dividends Restrictions | |||
Unassigned surplus | 343,600,000 | ||
Dividends paid to parent company | 0 | 0 | 40,000,000 |
Essent PA | |||
Dividends Restrictions | |||
Unassigned surplus | 15,400,000 | ||
Dividends paid to parent company | 0 | $ 0 | $ 0 |
Essent Re | |||
Dividends Restrictions | |||
Total equity | 1,100,000,000 | ||
Essent Re | Essent Guaranty | Minimum | Quota share reinsurance | |||
Dividends Restrictions | |||
Total equity | $ 100,000,000 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of income tax expense | |||||||||||
Current | $ 38,402 | $ 43,867 | $ 28,644 | ||||||||
Deferred | 38,653 | 59,481 | 50,692 | ||||||||
Total income tax expense | 77,055 | 103,348 | 79,336 | ||||||||
Income before income taxes | $ 146,152 | $ 148,431 | $ 18,815 | $ 176,698 | $ 174,384 | $ 172,225 | $ 162,733 | $ 149,719 | 490,096 | 659,061 | 546,699 |
Effective Income Tax Rate Reconciliation, Amount | |||||||||||
Tax provision at weighted average statutory rates | 75,763 | 104,213 | 87,815 | ||||||||
Non-deductible expenses | 2,482 | 2,595 | 1,483 | ||||||||
Tax exempt interest, net of proration | (1,462) | (1,541) | (1,741) | ||||||||
Excess tax benefits from stock-based compensation | (599) | (1,997) | (9,644) | ||||||||
Other | 871 | 78 | 1,423 | ||||||||
Total income tax expense | $ 77,055 | $ 103,348 | $ 79,336 | ||||||||
% of pretax income | |||||||||||
Tax provision at weighted average statutory rates | 15.50% | 15.80% | 16.10% | ||||||||
Non-deductible expenses | 0.50% | 0.40% | 0.30% | ||||||||
Tax exempt interest, net of proration | (0.30%) | (0.20%) | (0.30%) | ||||||||
Excess tax benefits from stock-based compensation | (0.10%) | (0.30%) | (1.80%) | ||||||||
Other | 0.10% | 0.00% | 0.20% | ||||||||
Total income tax expense | 15.70% | 15.70% | 14.50% | ||||||||
Bermuda | Bermuda | |||||||||||
Components of income tax expense | |||||||||||
Income before income taxes | $ 129,300 | $ 162,800 | $ 128,500 | ||||||||
US | U.S. | |||||||||||
Components of income tax expense | |||||||||||
Income before income taxes | $ 360,800 | $ 496,300 | $ 418,200 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Net deferred tax asset | ||
Deferred tax assets | $ 29,577 | $ 29,392 |
Deferred tax liabilities | (334,686) | (279,012) |
Net deferred tax liability | (305,109) | (249,620) |
Components of the net deferred tax asset | ||
Contingency reserves | (300,281) | (261,855) |
Unrealized (gain) loss on investments | (30,050) | (13,214) |
Unearned premium reserve | 15,192 | 16,641 |
Accrued expenses | 4,202 | 3,391 |
Deferred policy acquisition costs | (3,571) | (3,298) |
Unearned ceding commissions | 2,951 | 3,227 |
Loss reserves | 2,529 | 416 |
Nonvested shares | 1,767 | 2,426 |
Start-up expenditures, net | 1,137 | 1,410 |
Change in fair market value of derivatives | 912 | 370 |
Fixed assets | 880 | 1,502 |
Investments in limited partnerships | (561) | (400) |
Prepaid expenses | (129) | (132) |
Loss reserves - TCJA transition adjustment | (94) | (113) |
Organizational expenditures | 7 | 9 |
Net deferred tax liability | $ (305,109) | $ (249,620) |
Income Taxes - Tax Deductions (
Income Taxes - Tax Deductions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Net purchases of T&L Bonds | $ 40,751 | $ 59,500 | $ (49,772) |
T&L Bonds held as of end of year | $ 302,636 | $ 261,885 |
Income Taxes - Essent Holdings
Income Taxes - Essent Holdings Income Taxes and Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
U.S. | ||
Operating Loss Carryforwards [Line Items] | ||
Taxes provided on un-remitted earnings | 0 | |
Cumulative amount of earnings that would be subject to withholding tax, if distributed outside of the U.S. | 2,100,000,000 | |
United States Ireland Tax Treaty Benefits Availed | U.S. | ||
Operating Loss Carryforwards [Line Items] | ||
Associated withholding tax liability on cumulative amount of earnings that would be subject to withholding tax, if distributed outside of the U.S. | 103,500,000 | |
Essent Holdings | Essent Irish Intermediate | ||
Operating Loss Carryforwards [Line Items] | ||
Withholding taxes accrued with respect to un-remitted earnings | $ 0 | |
Essent Holdings | United States Ireland Tax Treaty Benefits Availed | Essent Irish Intermediate | ||
Operating Loss Carryforwards [Line Items] | ||
Withholding tax rate on dividends paid | 5.00% | |
Essent Holdings | Absent Benefits Of United States Ireland Tax Treaty | Essent Irish Intermediate | ||
Operating Loss Carryforwards [Line Items] | ||
Withholding tax rate on dividends paid | 30.00% |
Earnings per Share (EPS) - Reco
Earnings per Share (EPS) - Reconciliation of Net Income and Weighted Average Common Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 123,602 | $ 124,536 | $ 15,380 | $ 149,523 | $ 146,958 | $ 144,630 | $ 136,405 | $ 127,720 | $ 413,041 | $ 555,713 | $ 467,363 |
Basic weighted average shares outstanding (in shares) | 111,908 | 111,908 | 102,500 | 97,949 | 97,830 | 97,822 | 97,798 | 97,595 | 106,098 | 97,762 | 97,403 |
Dilutive effect of nonvested shares (in shares) | 278 | 465 | 571 | ||||||||
Diluted weighted average shares outstanding (in shares) | 112,310 | 112,134 | 102,605 | 98,326 | 98,376 | 98,257 | 98,170 | 98,104 | 106,376 | 98,227 | 97,974 |
Basic earnings per share (in dollars per share) | $ 1.10 | $ 1.11 | $ 0.15 | $ 1.53 | $ 1.50 | $ 1.48 | $ 1.39 | $ 1.31 | $ 3.89 | $ 5.68 | $ 4.80 |
Diluted earnings per share (in dollars per share) | $ 1.10 | $ 1.11 | $ 0.15 | $ 1.52 | $ 1.49 | $ 1.47 | $ 1.39 | $ 1.30 | $ 3.88 | $ 5.66 | $ 4.77 |
Earnings per Share (EPS) - Narr
Earnings per Share (EPS) - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contingently issuable awards | |||
Antidilutive nonvested shares (in shares) | 324,813 | 39,490 | 128,575 |
Performance-based share awards | |||
Contingently issuable awards | |||
Percentage of award issuable if current period end were end of contingency period | 100.00% | 100.00% |
Earnings per Share (EPS) (Detai
Earnings per Share (EPS) (Details) | Dec. 31, 2020 |
2018 Performance-Based Grants | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |
Percentage of award issuable if current period end were end of contingency period | 100.00% |
2019 Performance-Based Grants | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |
Percentage of award issuable if current period end were end of contingency period | 100.00% |
2020 Performance-Based Grants | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |
Percentage of award issuable if current period end were end of contingency period | 25.00% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other comprehensive income (loss): | |||
Other comprehensive gains (losses), before tax | $ 98,923 | $ 102,677 | |
Other comprehensive income (loss): | |||
Other comprehensive gains (losses), tax effect | (16,836) | (17,497) | |
Net of Tax | |||
Stockholders equity, beginning of period | 2,984,845 | 2,365,717 | |
Other comprehensive income (loss): | |||
Total other comprehensive income (loss) | 82,087 | 85,180 | $ (25,741) |
Stockholders equity, end of period | 3,862,633 | 2,984,845 | 2,365,717 |
Accumulated Other Comprehensive Income (Loss) | |||
Before Tax | |||
AOCI before tax, beginning of period | 69,401 | (33,276) | |
Other comprehensive income (loss): | |||
AOCI before tax, end of period | 168,324 | 69,401 | (33,276) |
Tax Effect | |||
AOCI tax effect, beginning of period | (13,214) | 4,283 | |
Other comprehensive income (loss): | |||
AOCI tax effect, end of period | (30,050) | (13,214) | 4,283 |
Net of Tax | |||
Stockholders equity, beginning of period | 56,187 | (28,993) | (3,252) |
Other comprehensive income (loss): | |||
Total other comprehensive income (loss) | 82,087 | 85,180 | (25,741) |
Stockholders equity, end of period | 138,274 | 56,187 | $ (28,993) |
Accumulated Net Investment Gain (Loss) Attributable to Parent | |||
Other comprehensive income (loss): | |||
Unrealized holding gains (losses) arising during the period, before tax | 101,620 | 105,906 | |
Less: Reclassification adjustment for gains included in net income, before tax | (2,697) | (3,229) | |
Other comprehensive gains (losses), before tax | 98,923 | 102,677 | |
Other comprehensive income (loss): | |||
Unrealized holding gains (losses) arising during the period, tax effect | (17,286) | (17,995) | |
Less: Reclassification adjustment for gains included in net income, tax effect | 450 | 498 | |
Other comprehensive gains (losses), tax effect | (16,836) | (17,497) | |
Other comprehensive income (loss): | |||
Unrealized holding gains (losses) arising during the period, net of tax | 84,334 | 87,911 | |
Less: Reclassification adjustment for gains included in net income, net of tax | (2,247) | (2,731) | |
Total other comprehensive income (loss) | $ 82,087 | $ 85,180 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Recurring fair value measurements | ||
Total investments available for sale | $ 4,565,373 | $ 3,350,747 |
Fair Value, Recurring | ||
Recurring fair value measurements | ||
Total assets at fair value | 4,565,373 | 3,350,747 |
Fair Value, Recurring | U.S. Treasury securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 268,444 | 242,206 |
Fair Value, Recurring | U.S. agency securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 18,085 | 33,605 |
Fair Value, Recurring | U.S. agency mortgage-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 995,905 | 848,334 |
Fair Value, Recurring | Municipal debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 551,517 | 361,638 |
Fair Value, Recurring | Non-U.S. government securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 61,607 | 54,995 |
Fair Value, Recurring | Corporate debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 1,126,512 | 880,301 |
Fair Value, Recurring | Residential and commercial mortgage securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 409,282 | 288,281 |
Fair Value, Recurring | Asset-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 454,717 | 326,025 |
Fair Value, Recurring | Money market funds | ||
Recurring fair value measurements | ||
Total investments available for sale | 679,304 | 315,362 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | ||
Recurring fair value measurements | ||
Total assets at fair value | 947,748 | 557,568 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. Treasury securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 268,444 | 242,206 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. agency securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. agency mortgage-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Municipal debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Non-U.S. government securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Corporate debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Residential and commercial mortgage securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Asset-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Money market funds | ||
Recurring fair value measurements | ||
Total investments available for sale | 679,304 | 315,362 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||
Recurring fair value measurements | ||
Total assets at fair value | 3,617,625 | 2,793,179 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 18,085 | 33,605 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency mortgage-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 995,905 | 848,334 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | Municipal debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 551,517 | 361,638 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | Non-U.S. government securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 61,607 | 54,995 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 1,126,512 | 880,301 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | Residential and commercial mortgage securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 409,282 | 288,281 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 454,717 | 326,025 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||
Recurring fair value measurements | ||
Total assets at fair value | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | U.S. agency securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | U.S. agency mortgage-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | Municipal debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | Non-U.S. government securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | Residential and commercial mortgage securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | Asset-backed securities | ||
Recurring fair value measurements | ||
Total investments available for sale | 0 | 0 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | Money market funds | ||
Recurring fair value measurements | ||
Total investments available for sale | $ 0 | $ 0 |
Statutory Accounting (Details)
Statutory Accounting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Essent Guaranty | |||
Dividends Restrictions | |||
Statutory net income | $ 312,091 | $ 443,675 | $ 379,119 |
Statutory surplus | 1,048,878 | 1,032,416 | 872,105 |
Contingency reserve liability | 1,499,782 | 1,197,279 | 916,568 |
Increase in contingency reserve | 302,500 | ||
Released contingency reserves | 100 | ||
Essent PA | |||
Dividends Restrictions | |||
Statutory net income | 4,560 | 8,073 | 9,306 |
Statutory surplus | 54,354 | 52,936 | 49,336 |
Contingency reserve liability | 56,032 | 52,957 | $ 48,545 |
Increase in contingency reserve | 3,100 | ||
Released contingency reserves | 100 | ||
Essent Re | |||
Dividends Restrictions | |||
Statutory net income | 143,500 | 176,400 | |
Statutory capital and surplus | $ 1,100,000 | $ 939,200 |
Capital Maintenance Agreement (
Capital Maintenance Agreement (Details) | Dec. 31, 2020USD ($) |
Essent Guaranty | Capital maintenance agreement | Essent PA | |
Capital Maintenance Agreement | |
Amounts outstanding | $ 0 |
Essent Guaranty | Capital maintenance agreement | Essent PA | Maximum | |
Capital Maintenance Agreement | |
Risk to capital ratio | 25 |
Essent PA | |
Capital Maintenance Agreement | |
Risk to capital ratio | 1.7 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net premiums earned | $ 222,339 | $ 222,258 | $ 211,471 | $ 206,496 | $ 207,671 | $ 203,473 | $ 188,490 | $ 177,791 | $ 862,564 | $ 777,425 | $ 649,492 |
Other revenues | 24,860 | 20,780 | 24,606 | 22,344 | 21,091 | 22,914 | 23,402 | 22,735 | |||
Provision for losses and LAE | 62,073 | 55,280 | 175,877 | 8,063 | 10,929 | 9,990 | 4,960 | 7,107 | 301,293 | 32,986 | 11,575 |
Other underwriting and operating expenses | 36,825 | 37,100 | 38,819 | 41,947 | 41,231 | 41,588 | 41,520 | 41,030 | 154,691 | 165,369 | 150,900 |
Interest expense | 2,149 | 2,227 | 2,566 | 2,132 | 2,218 | 2,584 | 2,679 | 2,670 | 9,074 | 10,151 | 10,179 |
Income before income taxes | 146,152 | 148,431 | 18,815 | 176,698 | 174,384 | 172,225 | 162,733 | 149,719 | 490,096 | 659,061 | 546,699 |
Net income | $ 123,602 | $ 124,536 | $ 15,380 | $ 149,523 | $ 146,958 | $ 144,630 | $ 136,405 | $ 127,720 | $ 413,041 | $ 555,713 | $ 467,363 |
Basic earnings per common share (in dollars per share) | $ 1.10 | $ 1.11 | $ 0.15 | $ 1.53 | $ 1.50 | $ 1.48 | $ 1.39 | $ 1.31 | $ 3.89 | $ 5.68 | $ 4.80 |
Diluted earnings per common share (in dollars per share) | $ 1.10 | $ 1.11 | $ 0.15 | $ 1.52 | $ 1.49 | $ 1.47 | $ 1.39 | $ 1.30 | $ 3.88 | $ 5.66 | $ 4.77 |
Basic weighted average shares outstanding (in shares) | 111,908 | 111,908 | 102,500 | 97,949 | 97,830 | 97,822 | 97,798 | 97,595 | 106,098 | 97,762 | 97,403 |
Diluted weighted average shares outstanding (in shares) | 112,310 | 112,134 | 102,605 | 98,326 | 98,376 | 98,257 | 98,170 | 98,104 | 106,376 | 98,227 | 97,974 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments-Other Than Investments in Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | $ 4,485,953 | |
Fair Value | 4,654,277 | $ 3,429,620 |
Amount at which shown in the Balance Sheet | 4,654,277 | |
Fixed maturities | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 3,677,815 | |
Fair Value | 3,838,513 | |
Amount at which shown in the Balance Sheet | 3,838,513 | |
Fixed maturities | United States Government and government agencies and authorities | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 1,212,622 | |
Fair Value | 1,254,075 | |
Amount at which shown in the Balance Sheet | 1,254,075 | |
Fixed maturities | States, municipalities and political subdivisions | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 513,870 | |
Fair Value | 551,517 | |
Amount at which shown in the Balance Sheet | 551,517 | |
Fixed maturities | Residential and commercial mortgage securities | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 391,921 | |
Fair Value | 409,282 | |
Amount at which shown in the Balance Sheet | 409,282 | |
Fixed maturities | Asset-backed securities | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 452,527 | |
Fair Value | 454,717 | |
Amount at which shown in the Balance Sheet | 454,717 | |
Fixed maturities | Foreign government and agency securities | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 56,045 | |
Fair Value | 61,607 | |
Amount at which shown in the Balance Sheet | 61,607 | |
Fixed maturities | All other corporate bonds | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 1,050,830 | |
Fair Value | 1,107,315 | |
Amount at which shown in the Balance Sheet | 1,107,315 | |
Short-term investments | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 726,875 | |
Fair Value | 726,860 | |
Amount at which shown in the Balance Sheet | 726,860 | |
Other invested assets | ||
Investments-Other Than Investments in Related Parties | ||
Amortized Cost | 81,263 | |
Fair Value | 88,904 | |
Amount at which shown in the Balance Sheet | $ 88,904 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant - Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Total investments available for sale | $ 4,565,373 | $ 3,350,747 | |
Cash | 102,830 | 71,350 | |
Other assets | 40,793 | 18,367 | |
Total assets | 5,202,724 | 3,873,425 | |
Liabilities | |||
Credit facility borrowings (at carrying value, less unamortized deferred costs of $2,287 in 2020 and $564 in 2019) | 321,720 | 224,237 | |
Other accrued liabilities | 87,885 | 66,474 | |
Total liabilities | 1,340,091 | 888,580 | |
Commitments and contingencies | |||
Stockholders' Equity | |||
Common shares | 1,686 | 1,476 | |
Additional paid-in capital | 1,571,163 | 1,118,655 | |
Accumulated other comprehensive income | 138,274 | 56,187 | |
Retained earnings | 2,151,510 | 1,808,527 | |
Total stockholders' equity | 3,862,633 | 2,984,845 | $ 2,365,717 |
Total liabilities and stockholders' equity | 5,202,724 | 3,873,425 | |
Amortized Cost | 4,404,690 | 3,282,585 | |
Unamortized deferred costs | 3,280 | 763 | |
Fixed maturities | |||
Assets | |||
Total investments available for sale | 3,838,513 | 3,035,385 | |
Stockholders' Equity | |||
Amortized Cost | 3,677,815 | 2,967,225 | |
Short-term investments | |||
Assets | |||
Total investments available for sale | 726,860 | 315,362 | |
Stockholders' Equity | |||
Amortized Cost | 726,875 | 315,360 | |
Parent Company | |||
Assets | |||
Total investments available for sale | 554,544 | 96,531 | |
Cash | 8,688 | 1,845 | |
Due from affiliates | 1,278 | 875 | |
Investment in consolidated subsidiaries | 3,518,029 | 3,009,447 | |
Other assets | 4,512 | 1,608 | |
Total assets | 4,087,051 | 3,110,306 | |
Liabilities | |||
Due to affiliates | 0 | 301 | |
Credit facility borrowings (at carrying value, less unamortized deferred costs of $2,287 in 2020 and $564 in 2019) | 222,713 | 124,436 | |
Other accrued liabilities | 1,705 | 724 | |
Total liabilities | 224,418 | 125,461 | |
Commitments and contingencies | |||
Stockholders' Equity | |||
Common shares | 1,686 | 1,476 | |
Additional paid-in capital | 1,571,163 | 1,118,655 | |
Accumulated other comprehensive income | 138,274 | 56,187 | |
Retained earnings | 2,151,510 | 1,808,527 | |
Total stockholders' equity | 3,862,633 | 2,984,845 | |
Total liabilities and stockholders' equity | 4,087,051 | 3,110,306 | |
Unamortized deferred costs | 2,287 | 564 | |
Parent Company | Fixed maturities | |||
Assets | |||
Total investments available for sale | 202,129 | 0 | |
Stockholders' Equity | |||
Amortized Cost | 201,527 | 0 | |
Parent Company | Short-term investments | |||
Assets | |||
Total investments available for sale | 352,415 | 96,531 | |
Stockholders' Equity | |||
Amortized Cost | $ 352,412 | $ 96,531 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant - Comprehensive Income Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||||||||||
Net investment income | $ 80,087 | $ 83,542 | $ 64,091 | ||||||||
Realized investment losses, net | 2,697 | 3,229 | 1,318 | ||||||||
Total revenues | 955,154 | 867,567 | 719,353 | ||||||||
Expenses: | |||||||||||
Interest expense | $ 2,149 | $ 2,227 | $ 2,566 | $ 2,132 | $ 2,218 | $ 2,584 | $ 2,679 | $ 2,670 | 9,074 | 10,151 | 10,179 |
Income before income taxes | 146,152 | 148,431 | 18,815 | 176,698 | 174,384 | 172,225 | 162,733 | 149,719 | 490,096 | 659,061 | 546,699 |
Net income | $ 123,602 | $ 124,536 | $ 15,380 | $ 149,523 | $ 146,958 | $ 144,630 | $ 136,405 | $ 127,720 | 413,041 | 555,713 | 467,363 |
Other comprehensive income (loss): | |||||||||||
Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of $16,836 in 2020, $17,497 in 2019 and $(5,686) in 2018 | 82,087 | 85,180 | (25,741) | ||||||||
Total other comprehensive income (loss) | 82,087 | 85,180 | (25,741) | ||||||||
Comprehensive income | 495,128 | 640,893 | 441,622 | ||||||||
Parent Company | |||||||||||
Revenues: | |||||||||||
Net investment income | 1,181 | 1,601 | 980 | ||||||||
Realized investment losses, net | (10) | 0 | 0 | ||||||||
Administrative service fees from subsidiaries | 872 | 649 | 551 | ||||||||
Total revenues | 2,043 | 2,250 | 1,531 | ||||||||
Expenses: | |||||||||||
Administrative service fees to subsidiaries | 3,728 | 3,053 | 2,510 | ||||||||
Other operating expenses | 5,929 | 6,925 | 5,076 | ||||||||
Interest expense | 6,446 | 5,742 | 5,462 | ||||||||
Total expenses | 16,103 | 15,720 | 13,048 | ||||||||
Income before income taxes | (14,060) | (13,470) | (11,517) | ||||||||
Loss before equity in undistributed net income of subsidiaries | (14,060) | (13,470) | (11,517) | ||||||||
Equity in undistributed net income of subsidiaries | 427,101 | 569,183 | 478,880 | ||||||||
Net income | 413,041 | 555,713 | 467,363 | ||||||||
Other comprehensive income (loss): | |||||||||||
Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of $16,836 in 2020, $17,497 in 2019 and $(5,686) in 2018 | 82,087 | 85,180 | (25,741) | ||||||||
Total other comprehensive income (loss) | 82,087 | 85,180 | (25,741) | ||||||||
Comprehensive income | 495,128 | 640,893 | 441,622 | ||||||||
Change in unrealized appreciation (depreciation) of investments, (benefit) tax expense | $ 16,836 | $ 17,497 | $ (5,686) |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant - Cash Flow Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities | ||||||||||||
Net income | $ 123,602 | $ 124,536 | $ 15,380 | $ 149,523 | $ 146,958 | $ 144,630 | $ 136,405 | $ 127,720 | $ 413,041 | $ 555,713 | $ 467,363 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Loss on the sale of investments, net | (2,697) | (3,229) | (1,318) | |||||||||
Stock-based compensation expense | 18,462 | 16,588 | 15,073 | |||||||||
Amortization of premium on investment securities | 23,393 | 15,738 | 14,220 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Other assets | (16,840) | (2,921) | (5,060) | |||||||||
Other accrued liabilities | 24,283 | 4,375 | 5,299 | |||||||||
Net cash provided by operating activities | 727,931 | 589,848 | 625,321 | |||||||||
Investing Activities | ||||||||||||
Net change in short-term investments | (411,498) | (160,962) | 158,294 | |||||||||
Investments in subsidiaries | (17,012) | (49,789) | (30,860) | |||||||||
Purchase of investments available for sale | (1,575,082) | (1,044,964) | (1,126,032) | |||||||||
Proceeds from maturity of investments available for sale | 262,321 | 88,025 | 114,651 | |||||||||
Proceeds from sales of investments available for sale | 577,409 | 623,771 | 340,780 | |||||||||
Net cash used in investing activities | (1,154,417) | (545,076) | (546,905) | |||||||||
Financing Activities | ||||||||||||
Issuance of common shares, net of costs | $ 440,000 | 439,962 | 0 | 0 | ||||||||
Credit facility borrowings | 200,000 | 0 | 15,000 | |||||||||
Credit facility repayments | (100,000) | 0 | (40,000) | |||||||||
Treasury stock acquired | (6,354) | (9,005) | (31,414) | |||||||||
Payment of issuance costs for credit facility | (6,232) | (15) | (580) | |||||||||
Dividends paid | (69,410) | (29,348) | 0 | |||||||||
Net cash provided by (used in) financing activities | 457,966 | (38,368) | (56,994) | |||||||||
Net increase in cash | 31,480 | 6,404 | 21,422 | |||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||
Interest payments | (8,263) | (9,863) | (9,451) | |||||||||
Noncash Transactions | ||||||||||||
Repayment of borrowings with term loan proceeds | (325,000) | 0 | (100,000) | |||||||||
Parent Company | ||||||||||||
Operating Activities | ||||||||||||
Net income | 413,041 | 555,713 | 467,363 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in net income of subsidiaries | (427,101) | (569,183) | (478,880) | |||||||||
Loss on the sale of investments, net | 10 | 0 | 0 | |||||||||
Stock-based compensation expense | 935 | 830 | 843 | |||||||||
Amortization of premium on investment securities | 435 | 0 | 0 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Other assets | (319) | 416 | 911 | |||||||||
Other accrued liabilities | 18,208 | 15,562 | 15,537 | |||||||||
Net cash provided by operating activities | 5,209 | 3,338 | 5,774 | |||||||||
Investing Activities | ||||||||||||
Net change in short-term investments | (255,884) | (24,727) | 26,122 | |||||||||
Investments in subsidiaries | 0 | 55,001 | 0 | |||||||||
Purchase of investments available for sale | (205,668) | 0 | 0 | |||||||||
Proceeds from maturity of investments available for sale | 838 | 0 | 0 | |||||||||
Proceeds from sales of investments available for sale | 3,386 | 0 | 0 | |||||||||
Net cash used in investing activities | (457,328) | 30,274 | 26,122 | |||||||||
Financing Activities | ||||||||||||
Issuance of common shares, net of costs | 439,962 | 0 | 0 | |||||||||
Credit facility borrowings | 200,000 | 0 | 0 | |||||||||
Credit facility repayments | (100,000) | 0 | 0 | |||||||||
Treasury stock acquired | (6,354) | (9,005) | (31,414) | |||||||||
Payment of issuance costs for credit facility | (5,236) | (15) | (131) | |||||||||
Dividends paid | (69,410) | (29,348) | 0 | |||||||||
Net cash provided by (used in) financing activities | 458,962 | (38,368) | (31,545) | |||||||||
Net increase in cash | 6,843 | (4,756) | 351 | |||||||||
Cash at beginning of year | $ 1,845 | $ 6,601 | 1,845 | 6,601 | 6,250 | |||||||
Cash at end of year | $ 8,688 | $ 1,845 | 8,688 | 1,845 | 6,601 | |||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||
Interest payments | (5,714) | (5,509) | (4,984) | |||||||||
Noncash Transactions | ||||||||||||
Repayment of borrowings with term loan proceeds | $ (225,000) | $ 0 | $ 0 |
Schedule II - Condensed Finan_5
Schedule II - Condensed Financial Information of Registrant - Supplementary Notes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Information of Registrant | |||
Dividends paid to parent company | $ 0 | $ 55,000,000 | $ 0 |
Essent Guaranty | |||
Condensed Financial Information of Registrant | |||
Unassigned surplus | 343,600,000 | ||
Dividends paid to parent company | 0 | 0 | 40,000,000 |
Essent PA | |||
Condensed Financial Information of Registrant | |||
Unassigned surplus | 15,400,000 | ||
Dividends paid to parent company | $ 0 | $ 0 | $ 0 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |||||||||||
Gross Amount | $ 951,302 | $ 812,924 | $ 660,260 | ||||||||
Ceded to Other Companies | (88,738) | (35,499) | (10,768) | ||||||||
Assumed from Other Companies | 0 | 0 | 0 | ||||||||
Net premiums earned | $ 222,339 | $ 222,258 | $ 211,471 | $ 206,496 | $ 207,671 | $ 203,473 | $ 188,490 | $ 177,791 | $ 862,564 | $ 777,425 | $ 649,492 |
Assumed Premiums as a Percentage of Net Premiums | 0.00% | 0.00% | 0.00% |