Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 14, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
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 | $ 4,077,458,128 | ||
Entity Common Stock, Shares Outstanding | 108,095,924 | ||
Documents Incorporated by Reference | Portions of the registrant's proxy statement for the 2023 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, 2022. | ||
Entity Central Index Key | 0001448893 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Philadelphia, Pennsylvania |
Auditor Firm ID | 238 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments | ||
Total investments available for sale | $ 4,741,625 | $ 4,962,887 |
Other invested assets | 257,941 | 170,472 |
Total investments | 4,999,566 | 5,133,359 |
Cash | 81,240 | 81,491 |
Accrued investment income | 33,162 | 26,546 |
Accounts receivable | 57,399 | 46,157 |
Deferred policy acquisition costs | 9,910 | 12,178 |
Property and equipment (at cost, less accumulated depreciation of $67,352 in 2022 and $64,340 in 2021) | 19,571 | 11,921 |
Prepaid federal income tax | 418,460 | 360,810 |
Other assets | 104,489 | 49,712 |
Total assets | 5,723,797 | 5,722,174 |
Liabilities | ||
Reserve for losses and LAE | 216,464 | 407,445 |
Unearned premium reserve | 162,887 | 185,385 |
Net deferred tax liability | 356,810 | 373,654 |
Credit facility borrowings (at carrying value, less unamortized deferred costs of $4,136 in 2022 and $5,177 in 2021) | 420,864 | 419,823 |
Other accrued liabilities | 104,463 | 99,753 |
Total liabilities | 1,261,488 | 1,486,060 |
Commitments and contingencies (see Note 8) | ||
Stockholders' Equity | ||
Common shares, $0.015 par value: Authorized - 233,333; issued and outstanding - 107,683 shares in 2022 and 109,377 shares in 2021 | 1,615 | 1,641 |
Additional paid-in capital | 1,350,377 | 1,428,952 |
Accumulated other comprehensive (loss) income | (382,790) | 50,707 |
Retained earnings | 3,493,107 | 2,754,814 |
Total stockholders' equity | 4,462,309 | 4,236,114 |
Total liabilities and stockholders' equity | 5,723,797 | 5,722,174 |
Fixed maturities | ||
Investments | ||
Total investments available for sale | 4,489,598 | 4,649,800 |
Short-term investments | ||
Investments | ||
Total investments available for sale | $ 252,027 | $ 313,087 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments | ||
Amortized Cost | $ 5,184,856 | $ 4,897,607 |
Property, Plant and Equipment, Net | ||
Accumulated depreciation | 67,352 | 64,340 |
Credit Facility Borrowings | ||
Unamortized deferred costs | $ 4,136 | $ 5,177 |
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) | 107,683 | 109,377 |
Common shares, outstanding (in shares) | 107,683 | 109,377 |
Fixed maturities | ||
Investments | ||
Amortized Cost | $ 4,932,574 | $ 4,584,521 |
Short-term investments | ||
Investments | ||
Amortized Cost | $ 252,282 | $ 313,086 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Net premiums written | $ 820,029 | $ 807,492 | $ 834,113 |
Decrease in unearned premiums | 22,498 | 65,051 | 28,451 |
Net premiums earned | 842,527 | 872,543 | 862,564 |
Net investment income | 124,409 | 88,765 | 80,087 |
Realized investment (losses) gains, net | (13,172) | 418 | 2,697 |
Income (loss) from other invested assets | 28,676 | 56,386 | (215) |
Other income | 18,384 | 10,398 | 10,021 |
Total revenues | 1,000,824 | 1,028,510 | 955,154 |
Losses and expenses: | |||
(Benefit) provision for losses and LAE | (174,704) | 31,057 | 301,293 |
Other underwriting and operating expenses | 171,733 | 166,857 | 154,691 |
Interest expense | 15,608 | 8,282 | 9,074 |
Total losses and expenses | 12,637 | 206,196 | 465,058 |
Income before income taxes | 988,187 | 822,314 | 490,096 |
Income tax expense | 156,834 | 140,531 | 77,055 |
Net income | $ 831,353 | $ 681,783 | $ 413,041 |
Earnings per share: | |||
Basic (in dollars per share) | $ 7.75 | $ 6.13 | $ 3.89 |
Diluted (in dollars per share) | $ 7.72 | $ 6.11 | $ 3.88 |
Weighted average shares outstanding: | |||
Basic (in shares) | 107,205 | 111,164 | 106,098 |
Diluted (in shares) | 107,653 | 111,555 | 106,376 |
Net income | $ 831,353 | $ 681,783 | $ 413,041 |
Other comprehensive (loss) income: | |||
Change in unrealized (depreciation) appreciation of investments, net of tax (benefit) expense of $(75,013) in 2022, $(15,477) in 2021 and $16,836 in 2020 | (433,497) | (87,567) | 82,087 |
Total other comprehensive (loss) income | (433,497) | (87,567) | 82,087 |
Comprehensive income | $ 397,856 | $ 594,216 | $ 495,128 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized appreciation (depreciation) of investments, tax (benefit) expense | $ (75,013) | $ (15,477) | $ 16,836 |
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 year at Dec. 31, 2019 | $ 1,476 | $ 1,118,655 | $ 56,187 | $ 1,808,527 | $ 0 | |
Changes in Stockholders' Equity | ||||||
Issuance of common shares | 207 | 439,755 | ||||
Net income | $ 413,041 | 413,041 | ||||
Dividends and dividend equivalents declared | 648 | (70,058) | ||||
Issuance of management incentive shares | 5 | (5) | ||||
Stock-based compensation expense | 18,462 | |||||
Other comprehensive (loss) income | 82,087 | 82,087 | ||||
Treasury stock acquired | (6,354) | |||||
Cancellation of treasury stock | (2) | (6,352) | 6,354 | |||
Stockholders equity, end of year at Dec. 31, 2020 | 3,862,633 | 1,686 | 1,571,163 | 138,274 | 2,151,510 | 0 |
Changes in Stockholders' Equity | ||||||
Issuance of common shares | 0 | 0 | ||||
Net income | 681,783 | 681,783 | ||||
Dividends and dividend equivalents declared | 755 | (78,479) | ||||
Issuance of management incentive shares | 9 | (9) | ||||
Stock-based compensation expense | 20,844 | |||||
Other comprehensive (loss) income | (87,567) | (87,567) | ||||
Treasury stock acquired | (163,855) | |||||
Cancellation of treasury stock | (54) | (163,801) | 163,855 | |||
Stockholders equity, end of year at Dec. 31, 2021 | 4,236,114 | 1,641 | 1,428,952 | 50,707 | 2,754,814 | 0 |
Changes in Stockholders' Equity | ||||||
Issuance of common shares | 0 | 0 | ||||
Net income | 831,353 | 831,353 | ||||
Dividends and dividend equivalents declared | 932 | (93,060) | ||||
Issuance of management incentive shares | 9 | (9) | ||||
Stock-based compensation expense | 18,381 | |||||
Other comprehensive (loss) income | (433,497) | (433,497) | ||||
Treasury stock acquired | (97,914) | |||||
Cancellation of treasury stock | (35) | (97,879) | 97,914 | |||
Stockholders equity, end of year at Dec. 31, 2022 | $ 4,462,309 | $ 1,615 | $ 1,350,377 | $ (382,790) | $ 3,493,107 | $ 0 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | |||
Net income | $ 831,353 | $ 681,783 | $ 413,041 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Realized investment losses (gains), net | 13,172 | (418) | (2,697) |
(Income) loss from other invested assets | (28,676) | (56,386) | 215 |
Distribution of income from other invested assets | 14,105 | 25,730 | 1,277 |
Depreciation and amortization | 3,024 | 3,379 | 3,328 |
Stock-based compensation expense | 18,381 | 20,844 | 18,462 |
Amortization of premium on investment securities | 18,347 | 33,739 | 23,393 |
Deferred income tax provision | 58,168 | 84,022 | 38,653 |
Change in: | |||
Accrued investment income | (6,616) | (6,598) | (1,413) |
Accounts receivable | (11,211) | 3,337 | (8,848) |
Deferred policy acquisition costs | 2,268 | 4,827 | (1,300) |
Prepaid federal income tax | (57,650) | (58,174) | (40,751) |
Other assets | (50,333) | (3,948) | (16,840) |
Reserve for losses and LAE | (190,981) | 32,504 | 305,579 |
Unearned premium reserve | (22,498) | (65,051) | (28,451) |
Other accrued liabilities | (2,036) | 9,666 | 24,283 |
Net cash provided by operating activities | 588,817 | 709,256 | 727,931 |
Investing Activities | |||
Net change in short-term investments | 61,060 | 413,773 | (411,498) |
Purchase of investments available for sale | (1,378,231) | (2,270,701) | (1,575,082) |
Proceeds from maturities and paydowns of investments available for sale | 247,296 | 266,930 | 262,321 |
Proceeds from sales of investments available for sale | 747,883 | 1,067,882 | 577,409 |
Purchase of other invested assets | (74,620) | (67,397) | (17,012) |
Return of investment from other invested assets | 1,721 | 8,844 | 11,891 |
Purchase of property and equipment | (3,981) | (2,498) | (2,446) |
Net cash used in investing activities | (398,872) | (583,167) | (1,154,417) |
Financing Activities | |||
Issuance of common shares, net of costs | 0 | 0 | 439,962 |
Credit facility borrowings | 0 | 225,000 | 200,000 |
Credit facility repayments | 0 | (125,000) | (100,000) |
Treasury stock acquired | (97,914) | (163,855) | (6,354) |
Payment of issuance costs for credit facility | (154) | (5,849) | (6,232) |
Dividends paid | (92,128) | (77,724) | (69,410) |
Net cash (used in) provided by financing activities | (190,196) | (147,428) | 457,966 |
Net (decrease) increase in cash | (251) | (21,339) | 31,480 |
Cash at beginning of year | 81,491 | 102,830 | 71,350 |
Cash at end of year | 81,240 | 81,491 | 102,830 |
Supplemental Disclosure of Cash Flow Information | |||
Income tax payments | (98,006) | (55,799) | (38,705) |
Interest payments | (13,595) | (6,951) | (8,263) |
Noncash Transactions | |||
Repayment of borrowings with term loan proceeds | 0 | (225,000) | (325,000) |
Operating lease liabilities arising from obtaining right-of-use assets | $ 10,035 | $ 15 | $ 805 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
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 an operations center in Winston-Salem, North Carolina. 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 new insurance written ("NIW") 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. In April 2021, Essent Guaranty and Essent Re agreed to increase the quota share reinsurance coverage provided by Essent Re from 25% to 35% effective January 1, 2021. The quota share reinsurance coverage provided for Essent Guaranty's NIW prior to January 1, 2021 will continue to be 25%, the quota share percentage in effect at the time NIW was first ceded. 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 an operations center in Winston-Salem, North Carolina that is 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. Certain amounts in prior years have been reclassified to conform to the current year presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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 principally comprised of limited partnership interests which are generally accounted for under the equity method of accounting or fair value using net asset value (or its equivalent) as a practical expedient, with changes in value reported in income from other invested assets. In applying the equity method or fair value using net asset value (or its equivalent) as a practical expedient, 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 or changes in fair value. 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: 2022 2021 (In thousands) Cost Accumulated Cost Accumulated Furniture and fixtures $ 2,809 $ (2,249) $ 2,321 $ (2,143) Office equipment 1,012 (894) 906 (842) Computer hardware 11,125 (10,607) 10,666 (9,962) Purchased software 39,015 (38,358) 38,466 (38,046) Costs of internal-use software 14,683 (11,332) 12,500 (10,028) Leasehold improvements 5,171 (3,912) 4,987 (3,319) Total $ 73,815 $ (67,352) $ 69,846 $ (64,340) 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 $3.6 million, $5.8 million and $10.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization of deferred policy acquisition costs totaled $5.8 million, $10.6 million and $8.8 million for the years ended December 31, 2022, 2021 and 2020, 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 94% of earned premium in 2022. 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 $20.8 million and $63.8 million of earned premium related to policy cancellations for the years ended December 31, 2022 and 2021, 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, 2022 and 2021, 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 or SOFR 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. 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 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, 2024, as amended by ASU 2022-06, 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. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This update clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. The update clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. The update also requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The adoption of this ASU is not expected to have a material effect on the Company's consolidated operating results or financial position. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments available for sale consist of the following: December 31, 2022 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 584,173 $ 341 $ (28,076) $ 556,438 U.S. agency securities 49,059 7 (8) 49,058 U.S. agency mortgage-backed securities 898,675 258 (115,190) 783,743 Municipal debt securities (1) 661,934 2,010 (61,254) 602,690 Non-U.S. government securities 69,651 — (7,252) 62,399 Corporate debt securities (2) 1,546,513 1,195 (133,387) 1,414,321 Residential and commercial mortgage securities 577,915 390 (66,481) 511,824 Asset-backed securities 660,345 72 (35,856) 624,561 Money market funds 136,591 — — 136,591 Total investments available for sale $ 5,184,856 $ 4,273 $ (447,504) $ 4,741,625 December 31, 2021 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 447,926 $ 3,833 $ (2,966) $ 448,793 U.S. agency securities 5,501 3 — 5,504 U.S. agency mortgage-backed securities 1,005,611 13,365 (10,113) 1,008,863 Municipal debt securities (1) 598,764 30,122 (1,287) 627,599 Non-U.S. government securities 77,366 3,232 (855) 79,743 Corporate debt securities (2) 1,428,645 36,067 (9,465) 1,455,247 Residential and commercial mortgage securities 541,638 10,452 (6,667) 545,423 Asset-backed securities 582,144 1,673 (2,114) 581,703 Money market funds 210,012 — — 210,012 Total investments available for sale $ 4,897,607 $ 98,747 $ (33,467) $ 4,962,887 _______________________________________________________________________________ December 31, December 31, (1) The following table summarizes municipal debt securities as of : 2022 2021 Special revenue bonds 79.0 % 77.1 % General obligation bonds 20.9 20.5 Certificate of participation bonds — 1.9 Tax allocation bonds 0.1 0.5 Total 100.0 % 100.0 % December 31, December 31, (2) The following table summarizes corporate debt securities as of : 2022 2021 Financial 40.5 % 33.7 % Consumer, non-cyclical 17.9 19.8 Communications 8.4 11.4 Consumer, cyclical 6.8 7.0 Industrial 6.8 7.0 Energy 6.4 6.0 Utilities 6.1 4.6 Technology 4.9 6.8 Basic Materials 2.1 3.7 Government 0.1 — Total 100.0 % 100.0 % The amortized cost and fair value of investments available for sale at December 31, 2022, 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 $ 175,645 $ 173,828 Due after 1 but within 5 years 355,565 335,166 Due after 5 but within 10 years 38,584 33,967 Due after 10 years 14,379 13,477 Subtotal 584,173 556,438 U.S. agency securities: Due in 1 year 47,433 47,434 Due after 1 but within 5 years 1,626 1,624 Subtotal 49,059 49,058 Municipal debt securities: Due in 1 year 6,974 6,932 Due after 1 but within 5 years 151,110 148,538 Due after 5 but within 10 years 154,029 143,560 Due after 10 years 349,821 303,660 Subtotal 661,934 602,690 Non-U.S. government securities: Due in 1 year 10,021 9,979 Due after 1 but within 5 years 33,761 32,536 Due after 5 but within 10 years 5,532 4,397 Due after 10 years 20,337 15,487 Subtotal 69,651 62,399 Corporate debt securities: Due in 1 year 250,596 248,482 Due after 1 but within 5 years 715,711 684,102 Due after 5 but within 10 years 419,632 355,500 Due after 10 years 160,574 126,237 Subtotal 1,546,513 1,414,321 U.S. agency mortgage-backed securities 898,675 783,743 Residential and commercial mortgage securities 577,915 511,824 Asset-backed securities 660,345 624,561 Money market funds 136,591 136,591 Total investments available for sale $ 5,184,856 $ 4,741,625 The components of realized investment (losses) gains, net on the consolidated statements of comprehensive income were as follows: Year Ended December 31, (In thousands) 2022 2021 2020 Realized gross gains $ 14,420 $ 4,044 $ 5,608 Realized gross losses 14,864 3,626 2,482 Impairment loss 12,728 — 429 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, 2022 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 321,848 $ (12,381) $ 169,795 $ (15,695) $ 491,643 $ (28,076) U.S. agency securities 7,117 (8) — — 7,117 (8) U.S. agency mortgage-backed securities 351,310 (34,193) 415,743 (80,997) 767,053 (115,190) Municipal debt securities 335,784 (41,620) 64,766 (19,634) 400,550 (61,254) Non-U.S. government securities 48,071 (2,914) 14,328 (4,338) 62,399 (7,252) Corporate debt securities 811,217 (69,415) 421,307 (63,972) 1,232,524 (133,387) Residential and commercial mortgage securities 265,934 (22,628) 242,366 (43,853) 508,300 (66,481) Asset-backed securities 333,080 (15,454) 258,572 (20,402) 591,652 (35,856) Total $ 2,474,361 $ (198,613) $ 1,586,877 $ (248,891) $ 4,061,238 $ (447,504) Less than 12 months 12 months or more Total December 31, 2021 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 207,122 $ (2,170) $ 28,012 $ (796) $ 235,134 $ (2,966) U.S. agency mortgage-backed securities 582,108 (9,414) 26,131 (699) 608,239 (10,113) Municipal debt securities 91,719 (1,281) 312 (6) 92,031 (1,287) Non-U.S. government securities 22,986 (855) — — 22,986 (855) Corporate debt securities 522,120 (7,200) 46,875 (2,265) 568,995 (9,465) Residential and commercial mortgage securities 268,617 (5,200) 38,256 (1,467) 306,873 (6,667) Asset-backed securities 339,137 (1,954) 13,101 (160) 352,238 (2,114) Total $ 2,033,809 $ (28,074) $ 152,687 $ (5,393) $ 2,186,496 $ (33,467) At December 31, 2022 and 2021, we held 2,578 and 1,180 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, 2022 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 98% of the securities at December 31, 2022 had investment-grade ratings. We concluded that gross unrealized losses noted above were primarily associated with the changes in interest rates subsequent to purchase rather than due to credit impairment. We recorded impairments of $12.7 million in the year ended December 31, 2022. We recorded other-than-temporary impairments of $0.4 million in the year ended December 31, 2020 for securities in an unrealized loss position. The impairments resulted from our intent to sell these securities subsequent to the reporting date. There were no impairments in the year ended December 31, 2021. The Company's other invested assets at December 31, 2022 and December 31, 2021 totaled $257.9 million and $170.5 million, respectively. Other invested assets are principally comprised of limited partnership interests which are generally accounted for under the equity method or fair value using net asset value (or its equivalent) as a practical expedient. Our proportionate share of earnings or losses or changes in fair value are reported in income from other invested assets on the consolidated statements of comprehensive income. For entities accounted for under the equity method that follow industry-specific guidance for investment companies, our proportionate share of earnings or losses includes changes in the fair value of the underlying assets of these entities. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. Through June 30, 2021, unrealized gains and losses reported by these entities were included in other comprehensive income (“OCI”). Subsequent to June 30, 2021, management concluded that unrealized gains and losses on these investments should be reflected in earnings rather than OCI. Income from other invested assets for the year ended December 31, 2021 includes $7.6 million of net unrealized gains that were accumulated in OCI at December 31, 2020. Other invested assets that are accounted for at fair value using the net asset value (or its equivalent) as a practical expedient totaled $165.7 million as of December 31, 2022. The majority of these investments were in limited partnerships invested in real estate or consumer credit. At December 31, 2022, maximum future funding commitments were $42.9 million. For limited partnership investments that have a contractual expiration date, we expect the liquidation of the underlying assets to occur over the next two The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $9.1 million at December 31, 2022 and $9.7 million at December 31, 2021. 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 $972.4 million at December 31, 2022 and $982.6 million at December 31, 2021. 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 $8.6 million at December 31, 2022 and $8.5 million at December 31, 2021. 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 $9.1 million at December 31, 2022 and $9.0 million at December 31, 2021. Net investment income consists of: Year Ended December 31, (In thousands) 2022 2021 2020 Fixed maturities $ 129,530 $ 94,117 $ 83,313 Short-term investments 2,319 171 1,669 Gross investment income 131,849 94,288 84,982 Investment expenses (7,440) (5,523) (4,895) Net investment income $ 124,409 $ 88,765 $ 80,087 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consists of the following at December 31: (In thousands) 2022 2021 Premiums receivable $ 46,228 $ 42,988 Other receivables 11,171 3,169 Total accounts receivable 57,399 46,157 Less: Allowance for doubtful accounts — — Accounts receivable, net $ 57,399 $ 46,157 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, 2022 | |
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) 2022 2021 2020 Net premiums written: Direct $ 927,702 $ 918,406 $ 922,851 Ceded (1) (107,673) (110,914) (88,738) Net premiums written $ 820,029 $ 807,492 $ 834,113 Net premiums earned: Direct $ 950,200 $ 983,457 $ 951,302 Ceded (1) (107,673) (110,914) (88,738) Net premiums earned $ 842,527 $ 872,543 $ 862,564 _______________________________________________________________________________ (1) Net of profit commission. Quota Share Reinsurance Essent Guaranty has entered into quota share reinsurance agreements with panels of third-party reinsurers ("QSR" agreements). Each of the third-party reinsurers has an insurer minimum financial strength rating of A- or better by S&P Global Ratings, A.M. Best or both. Under each QSR agreement, Essent Guaranty will cede premiums earned on a percentage of risk on all eligible policies written during a specified period, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a specified ceding commission, as well as a profit commission that varies directly and inversely with ceded claims. Essent Guaranty has certain termination rights under each QSR agreement, including the option to terminate each QSR agreement subject to a termination fee. The following tables summarizes Essent Guaranty's quota share reinsurance agreements as of December 31, 2022: QSR Agreement Coverage Period Ceding Percentage Ceding Commission Profit Commission QSR-2019 September 1, 2019-December 31, 2020 (1) 20% 63% (2) QSR-2022 January 1, 2022-December 31, 2022 20% 20% 62% _______________________________________________________________________________ (1) Under QSR-2019, Essent Guaranty cedes 40% of premiums on singles policies and 20% on all other policies. (2) The original profit commission on QSR-2019 was up to 60%; however because Essent Guaranty did not exercise its option to terminate the QSR Agreement on December 31, 2021, the maximum profit commission that Essent Guaranty could earn increased to 63% in 2022 and thereafter. Total RIF ceded under QSR 2019 and QSR 2022 was $6.9 billion as of December 31, 2022. 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 or SOFR 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. Effective June 1, 2022, Essent Guaranty entered into a reinsurance agreement with a panel of reinsurers that provides excess of loss coverage on new insurance written from October 1, 2021 through December 31, 2022. For the reinsurance coverage period, Essent Guaranty and its affiliates retain the first layer of the respective aggregate losses, and the reinsurance panel 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. 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, 2022: 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 2020 & 2021 Radnor Re 2021-1 Ltd. June 23, 2021 June 26, 2028 2021 Radnor Re 2021-2 Ltd. November 10, 2021 November 25, 2027 2021 & 2022 Panel of Reinsurers June 1, 2022 January 1, 2030 2021 & 2022 Radnor Re 2022-1 Ltd. September 21, 2022 September 25, 2028 _______________________________________________________________________________ (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, 2022: (In thousands) Remaining Vintage Year Remaining Remaining ILN Other Reinsurance Total Remaining 2015 & 2016 $ 5,931,479 $ 1,610,997 $ 41,764 $ — $ 41,764 $ 206,843 2017 5,810,456 1,527,469 225,562 85,627 (7) 311,189 216,143 2018 6,620,816 1,708,129 325,537 76,144 (8) 401,681 248,675 2019 (3) 8,185,651 2,108,121 418,006 46,448 (9) 464,454 214,708 2020 & 2021 (4) 40,676,403 10,206,068 451,093 — 451,093 278,919 2021 (5) 41,455,845 11,027,751 410,778 — 410,778 279,400 2021 & 2022 (9) 75,406,975 20,284,551 — 141,992 141,992 $ 507,114 2021 & 2022 (10) 33,815,842 9,079,729 237,868 — 237,868 $ 303,761 Total $ 217,903,467 $ 57,552,815 $ 2,110,608 $ 350,211 $ 2,460,819 $ 2,028,750 (11) _______________________________________________________________________________ (3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019. (4) Reinsurance coverage on new insurance written from August 1, 2020 through March 31, 2021. (5) Reinsurance coverage on new insurance written from April 1, 2021 through September 30, 2021. (6) Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd. (7) Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd. (8) Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd. (9) Reinsurance coverage on new insurance written from October 1, 2021 through December 31, 2022. (10) Reinsurance coverage on new insurance written from October 1, 2021 through July 31, 2022. (11) The total remaining first layer retention differs from the sum of the individual reinsurance transactions as a result of overlapping coverage between certain transactions. 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. As of November 26, 2021, Radnor Re 2019-2 was no longer subject to a trigger event. Radnor Re 2020-1 was no longer subject to a trigger event as of July 25, 2022. The amount of monthly reinsurance premiums ceded to the Radnor Re entities will fluctuate due to changes in one-month LIBOR or SOFR 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. The change in the fair value of the embedded derivatives is reported in earnings and included in other income. 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, 2022: Maximum Exposure to Loss (In thousands) Total VIE Assets On - Balance Sheet Off - Balance Sheet Total Radnor Re 2018-1 Ltd. $ 225,562 $ 215 $ 27 $ 242 Radnor Re 2019-1 Ltd. 325,537 (2,080) 67 (2,013) Radnor Re 2019-2 Ltd. 41,764 (1,450) 1 (1,449) Radnor Re 2020-1 Ltd. 418,006 (1,398) 79 (1,319) Radnor Re 2021-1 Ltd. 451,093 (4,441) 95 (4,346) Radnor Re 2021-2 Ltd. 410,778 (2,772) 171 (2,601) Radnor Re 2022-1 Ltd. 237,868 979 86 1,065 Total $ 2,110,608 $ (10,947) $ 526 $ (10,421) 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, 2022 | |
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) 2022 2021 2020 Reserve for losses and LAE at beginning of year $ 407,445 $ 374,941 $ 69,362 Less: Reinsurance recoverables 25,940 19,061 71 Net reserve for losses and LAE at beginning of year 381,505 355,880 69,291 Add provision for losses and LAE, net of reinsurance, occurring in: Current year 99,372 97,256 317,516 Prior years (274,076) (66,199) (16,223) Net incurred losses and LAE during the current year (174,704) 31,057 301,293 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current year 224 388 1,018 Prior years 4,731 5,044 13,686 Net loss and LAE payments during the current year 4,955 5,432 14,704 Net reserve for losses and LAE at end of year 201,846 381,505 355,880 Plus: Reinsurance recoverables 14,618 25,940 19,061 Reserve for losses and LAE at end of year $ 216,464 $ 407,445 $ 374,941 For the year ended December 31, 2022, $4.7 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $274.1 million favorable prior year development during the year ended December 31, 2022. Reserves remaining as of December 31, 2022 for prior years are $102.7 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the year ended December 31, 2021, $5.0 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $66.2 million favorable prior year development during the year ended December 31, 2021. Reserves remaining as of December 31, 2021 for prior years were $284.6 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, declining during the second half of 2020 and through 2022. 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. In response to the COVID-19 pandemic, the United States government enacted a number of policies to provide fiscal stimulus to the economy and relief to those affected by this global disaster. Specifically, mortgage forbearance programs and foreclosure moratoriums were instituted by Federal legislation along with actions taken by the Federal Housing Finance Agency (“FHFA”), Fannie Mae and Freddie Mac (collectively the “GSEs”). The mortgage forbearance plans provide for eligible homeowners who were adversely impacted by COVID-19 to temporarily reduce or suspend their mortgage payments for up to 18 months for loans in an active COVID-19-related forbearance program as of February 28, 2021. 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 fiscal stimulus, forbearance programs and the foreclosure moratoriums put in place and the credit characteristics of the defaulted loans, we expected the ultimate number of Early COVID Defaults that result in claims would be less than our historical default-to-claim experience. Accordingly, we recorded a reserve equal to approximately 7% of the initial risk in force for the Early COVID Defaults. The reserve for the Early COVID Defaults had not been adjusted as of December 31, 2021. As of March 31, 2022, the defaulted loans reported to us in the second and third quarters of 2020 had reached the end of their forbearance periods. During the first quarter of 2022, the Early COVID Defaults cured at elevated levels, and the cumulative cure rate for the Early COVID Defaults at March 31, 2022 exceeded our initial estimated cure rate implied by our 7% estimate of ultimate loss for these defaults. Based on cure activity through March 31, 2022 and our expectations for future cure activity, we lowered our estimate of ultimate loss for the Early COVID Defaults from 7% to 4% of the initial risk in force. During the three months ended June 30, 2022, Early COVID Defaults cured at levels that exceeded our estimate as of March 31, 2022, and we further lowered our estimate of loss for these defaults as of June 30, 2022 to 2% of the initial risk in force. These revisions to our estimate of ultimate loss for the Early COVID Defaults resulted in a benefit recorded to the provision for losses of $164.1 million for the year ended December 31, 2022. As of December 31, 2022, approximately 99% of the Early COVID Defaults had cured. Due to the level of Early COVID Defaults remaining in the default inventory, during the third quarter, we resumed reserving for the Early COVID Defaults using our normal reserve methodology. The transition of defaults to foreclosure or claim has not returned to pre-pandemic levels. As a result, the level of defaults in the default inventory that have missed twelve or more payments is above pre-pandemic levels. The economy in the United States is currently experiencing elevated levels of consumer price inflation. The Federal Reserve has increased the target federal funds rate several times during 2022 in an effort to reduce consumer price inflation. These rate increases have resulted in higher mortgage interest rates which may lower home sale activity and affect the options available to delinquent borrowers. It is reasonably possible that our estimate of losses could change in the near term as a result of changes in the economic environment, the impact of elevated levels of consumer price inflation on home sale activity, housing inventory and home prices. In September 2022, Hurricane Ian made landfall in Florida and caused property damage in certain counties. There are many factors contributing to the uncertainty surrounding these insured loans. Under our master policy, loan servicers are not required to notify us of a default until the borrower has missed two consecutive minimum payments. Also, the level of damage being reported in these areas varies significantly from region to region. Further, under our master policy, our exposure may be limited on hurricane-related claims. For example, we are permitted to exclude a claim entirely where estimated restoration costs from damage to the property underlying a mortgage equal 20% or more of the property’s original value and adjust a claim where the property underlying a mortgage in default is subject to unrestored physical damage. This event has not materially affected our reserves as of December 31, 2022. The impact on our reserves in future periods will be dependent upon the amount of delinquent notices received from loan servicers and our expectations for the amount of ultimate losses on these delinquencies. The following table summarizes incurred loss and allocated loss adjustment expense development, net of reinsurance, 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, 2013 to 2021 is presented as supplementary information. Incurred Loss and Allocated LAE, As of December 31, 2022 (In thousands) Total of IBNR plus Expected Development on Reported Defaults Cumulative Number of Reported Defaults (1) Unaudited Accident Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 $ 2,986 $ 2,461 $ 2,008 $ 1,997 $ 2,060 $ 2,058 $ 2,058 $ 2,058 $ 2,058 $ 2,058 $ — 51 2014 6,877 4,312 3,323 2,984 2,930 2,897 2,882 2,869 2,870 1 92 2015 14,956 9,625 8,893 8,439 8,461 8,323 8,410 8,434 7 213 2016 21,889 11,890 9,455 9,219 8,972 8,614 8,861 27 244 2017 38,178 16,261 12,202 11,488 11,249 11,550 64 327 2018 36,438 23,168 19,536 17,402 17,249 188 492 2019 50,562 39,085 23,649 24,223 823 693 2020 317,516 269,410 53,045 3,550 1,156 2021 97,256 38,551 2,866 1,349 2022 99,372 7,430 10,768 Total $ 266,213 (1) Cumulative number of reported defaults includes cumulative paid claims plus loans in default by accident year as of December 31, 2022. 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, 2013 through 2021 is presented as supplementary information. (In thousands) Cumulative Paid Losses and Allocated LAE Unaudited Accident Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 $ 239 $ 928 $ 1,501 $ 1,775 $ 1,880 $ 2,058 $ 2,058 $ 2,058 $ 2,058 $ 2,058 2014 138 1,587 2,463 2,787 2,897 2,882 2,867 2,856 2,856 2015 544 3,610 6,960 7,535 7,961 8,055 8,226 8,335 2016 927 4,896 6,947 7,864 8,270 8,205 8,468 2017 633 5,370 9,156 10,257 10,536 10,620 2018 1,310 8,067 13,406 13,927 14,536 2019 1,288 8,049 10,717 12,392 2020 1,018 2,499 4,022 2021 388 856 2022 224 Total $ 64,367 All outstanding liabilities before 2013, net of reinsurance — Reserve for losses and LAE, net of reinsurance $ 201,846 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, 2022: (In thousands) December 31, 2022 Reserve for losses and LAE, net of reinsurance $ 201,846 Reinsurance recoverables on unpaid claims 14,618 Total gross reserve for losses and LAE $ 216,464 For our mortgage insurance portfolio, our average annual payout of losses as of December 31, 2022 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 10 Average Payout 5 % 31 % 25 % 9 % 4 % 2 % 1 % 0 % 0 % 0 % |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Credit Facility On December 10, 2021, Essent Group and its subsidiaries, Essent Irish Intermediate Holdings Limited and Essent US Holdings, Inc. (collectively, the "Borrowers"), entered into a third amended and restated, five-year secured credit facility with a committed capacity of $825 million (the “Credit Facility”). The Credit Facility amends and restates the three-year, secured credit facility entered into on October 14, 2020, and provides for an increase in the revolving credit facility from $300 million to $400 million. At closing, $425 million of new term loans were issued, with $225 million of the proceeds used to repay the existing term loan outstanding at Essent Group. Essent US Holdings, Inc. ("Essent Holdings") used cash to repay its $100 million existing term loan outstanding. The Credit Facility also provides for up to $175 million aggregate principal amount of uncommitted incremental term loan and/or revolving credit facilities that may be exercised at the Borrowers’ option so long as the Borrowers receive commitments from the lenders. 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 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 and 2021, we paid less than $0.1 million related to remedies. As of December 31, 2022, management believes any potential claims for indemnification related to contract underwriting services through December 31, 2022 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, 2022, 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 $13.1 million and $6.4 million as of December 31, 2022 and 2021, respectively, are reported on our consolidated balance sheet as property and equipment Operating lease liabilities The following table presents lease cost and other lease information as of and for the years ended December 31: Year Ended December 31, ($ in thousands) 2022 2021 2020 Lease cost: Operating lease cost $ 3,908 $ 2,699 $ 2,532 Short-term lease cost — 2 19 Sublease income (138) (135) (131) Total lease cost $ 3,770 $ 2,566 $ 2,420 Other information: Weighted average remaining lease term - operating leases 6.9 years 2.8 years 3.8 years Weighted average discount rate - operating leases 3.6 % 4.0 % 3.9 % The following table presents a maturity analysis of our lease liabilities as follows at December 31, 2022: Year Ended December 31 (In thousands) 2023 $ 4,302 2024 2,603 2025 2,064 2026 1,277 2027 1,258 2028 and thereafter 5,327 Total lease payments to be paid 16,831 Less: Future interest expense (1,880) Present value of lease liabilities $ 14,951 The maturity analysis of our lease liabilities shown above have not been reduced by minimum sublease rental income of $0.1 million due in 2023 under the non-cancelable sublease. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2022 | |
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 2022 2021 2020 March 31 $ 0.20 $ 0.16 $ 0.16 June 30 0.21 0.17 0.16 September 30 0.22 0.18 0.16 December 31 0.23 0.19 0.16 Total dividends per common share declared and paid $ 0.86 $ 0.70 $ 0.64 In February 2023, the Board of Directors declared a quarterly cash dividend of $0.25 per common share payable on March 20, 2023, to shareholders of record on March 10, 2023. Share Repurchase Plan In May 2021, the Board of Directors approved a share repurchase plan that authorized the Company to repurchase $250 million of its common shares in the open market by the end of 2022. During the year ended December 31, 2021, the Company repurchased 3,469,560 common shares at a cost of $157.8 million leaving $92.2 million remaining unused under the authorized repurchase plan. During the year ended December 31, 2022, the Company repurchased 2,136,961 common shares at a cost of $92.2 million, completing the May 2021 repurchase plan. The shares repurchased were recorded at cost and included in treasury stock. All treasury stock has been cancelled as of December 31, 2022 and 2021. In May 2022, the Board of Directors approved a new share repurchase plan that authorizes the Company to repurchase up to $250 million of its common shares in the open market by the end of 2023. There were no share repurchases under the 2022 plan, leaving $250.0 million remaining unused under the authorized repurchase plan as of December 31, 2022. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022, there were 2.8 million common shares available for future grant under the 2013 Plan. In February of each year, 2017 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: 2020 Performance-Based Grants 2019 Performance-Based Grants 2018 Performance-Based Grants 2017 Performance-Based Grants Performance Compounded Nonvested Compounded Nonvested Compounded Nonvested Compounded Nonvested <13 % 0 % <14 % 0 % <15 % 0 % <16 % 0 % Threshold 13 % 10 % 14 % 10 % 15 % 25 % 16 % 25 % 14 % 35 % 15 % 35 % 16 % 50 % 17 % 50 % 15 % 60 % 16 % 60 % 17 % 75 % 18 % 75 % 16 % 85 % 17 % 85 % Maximum ≥17 % 100 % ≥18 % 100 % ≥18 % 100 % ≥19 % 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 2017, 2018, 2019 and 2020 performance-based grants exceeded the maximum performance level and have vested or will vest at 100%. In February 2021, 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 February 2021 vest in three Relative Total Shareholder Return ≤25th percentile 50th percentile ≥75th percentile Three-Year Book 14% "Target" 100 % 150 % 200 % 12% 75 % 125 % 175 % 10% 50 % 100 % 150 % 8% 25 % 75 % 125 % 6% 0 % 50 % 100 % In February and May 2022, 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 February 2022 vest in three Relative Total Shareholder Return ≤25th percentile 50th percentile ≥75th percentile Three-Year Book 13% "Target" 100 % 150 % 200 % 11% 75 % 125 % 175 % 9% 50 % 100 % 150 % 7% 25 % 75 % 125 % 5% 0 % 50 % 100 % In the event that the compounded annual book value per share growth or the relative total shareholder return falls between the performance levels shown above for the 2022 or 2021 performance-based share awards, the nonvested common shares earned will be determined on a straight-line basis between the respective levels shown. Quoted market prices are used for the valuation of common shares granted that do not contain a market condition under ASC 718. The performance-based share awards granted in February 2022 and 2021 contain a market condition and were valued based on analysis provided by a third-party valuation firm using a risk neutral simulation taking into effect the vesting conditions of the grant. 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 vested or 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. Total incremental compensation expense related to amending these awards is $4.0 million. As of December 31, 2022, there was $0.4 million of unrecognized compensation expense related to amending these awards and we expect to recognize the expense over a weighted average period of 0.2 years. 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, 2019 through 2022, 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: 2022 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 500 $ 31.29 140 $ 45.31 461 $ 47.94 28 $ 41.75 Granted 308 14.83 87 46.15 161 42.56 25 40.28 Vested (139) 45.32 (86) 45.07 (192) 47.53 (14) 41.29 Forfeited (22) 15.45 (3) 46.91 (80) 48.73 (2) 42.70 Outstanding at end of year 647 $ 20.99 138 $ 45.94 350 $ 45.51 37 $ 40.86 2021 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 363 $ 47.09 153 $ 46.34 492 $ 46.59 21 $ 37.66 Granted 281 15.64 93 43.67 212 46.96 17 44.86 Vested (113) 45.02 (98) 45.40 (214) 43.74 (9) 38.53 Forfeited (31) 24.33 (8) 44.94 (29) 48.85 (1) 40.53 Outstanding at end of year 500 $ 31.29 140 $ 45.31 461 $ 47.94 28 $ 41.75 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 The total fair value of nonvested shares, share units or DEUs that vested was $18.4 million, $19.5 million and $18.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, there was $15.7 million of total unrecognized compensation expense related to nonvested shares or share units outstanding at December 31, 2022 and we expect to recognize the expense over a weighted average period of 2.2. In January 2023, 301,495 nonvested common share units were issued to all vice president and staff level employees and are subject to time-based vesting. In connection with our incentive program covering bonus awards for performance year 2022, in February 2023, 75,581 nonvested common share units were issued to certain employees and are subject to time-based vesting. In February 2023, 394,319 nonvested common shares were granted to certain members of senior management and are subject to time-based and performance-based vesting. 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 133,011, 135,616 and 141,801 in 2022, 2021 and 2020, respectively. The tendered shares were recorded at cost and included in treasury stock. All treasury stock has been cancelled as of December 31, 2022 and 2021. 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) 2022 2021 2020 Compensation expense $ 18,381 $ 20,844 $ 18,462 Income tax benefit 3,636 4,088 3,511 |
Dividends Restrictions
Dividends Restrictions | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022, Essent Guaranty had unassigned surplus of approximately $314.7 million and Essent PA had unassigned surplus of approximately $13.6 million. As of January 1, 2023, Essent Guaranty has dividend capacity of $314.7 million and Essent PA has dividend capacity of $5.3 million. Under PMIERs guidance issued by the GSEs effective June 30, 2020 through June 30, 2021, Essent Guaranty was required to obtain GSE written approval before paying a dividend. As a result of PMIERs guidance issued by the GSEs on June 30, 2021, Essent Guaranty could pay a dividend without prior GSE approval in the three months ended September 30, 2021 as long as the dividend payment would not cause its Available Assets to fall below 150% of its Minimum Required Assets. In addition, the guidance specified that Essent Guaranty could pay a dividend without prior GSE approval in the three months ended December 31, 2021 as long as the dividend payment would not cause its Available Assets to fall below 115% of its Minimum Required Assets. During the year ended December 31, 2022 and 2021, Essent Guaranty paid to its parent, Essent Holdings, dividends totaling $315.0 million and $247.2 million, respectively. Essent Guaranty paid no dividends to Essent Group or any intermediate holding companies in the year ended December 31, 2020. During the year ended December 31, 2022, Essent PA paid to its parent, Essent Holdings, dividends totaling $5 million, Essent PA did not pay a dividend in 2021 or 2020. 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, 2022, Essent Re had total equity of $1.5 billion. At December 31, 2022, our insurance subsidiaries were in compliance with these rules, regulations and agreements. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the year ended December 31, 2022, 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) 2022 2021 2020 Current $ 98,666 $ 56,509 $ 38,402 Deferred 58,168 84,022 38,653 Total income tax expense $ 156,834 $ 140,531 $ 77,055 For the year ended December 31, 2022, pre-tax income attributable to Bermuda and U.S. operations was $282.5 million and $705.6 million, respectively, as compared to $217.3 million and $605.0 million, respectively, for the year ended December 31, 2021 and $129.3 million and $360.8 million, respectively, for the year ended December 31, 2020. Income tax expense is different from that which would be obtained by applying the applicable statutory income tax rates to income before taxes by jurisdiction (i.e. U.S. 21%; Bermuda 0.0%). The reconciliation of the difference between income tax expense and the expected tax provision at the weighted average tax rate was as follows for the years ended December 31: 2022 2021 2020 ($ in thousands) $ % of pretax $ % of pretax $ % of pretax Tax provision at weighted average statutory rates $ 148,176 15.0 % $ 127,046 15.5 % $ 75,763 15.5 % State taxes, net of federal benefit 6,306 0.6 11,295 1.4 — 0.0 Non-deductible expenses 4,041 0.4 3,652 0.4 2,482 0.5 Tax exempt interest, net of proration (1,463) (0.1) (1,606) (0.2) (1,462) (0.3) Excess tax (benefit) deficit from stock-based compensation 75 0.0 61 — (599) (0.1) Other (301) 0.0 83 0.0 871 0.1 Total income tax expense $ 156,834 15.9 % $ 140,531 17.1 % $ 77,055 15.7 % 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) 2022 2021 Deferred tax assets $ 91,729 $ 29,100 Deferred tax liabilities (448,539) (402,754) Net deferred tax liability $ (356,810) $ (373,654) The components of the net deferred tax liability were as follows at December 31: (In thousands) 2022 2021 Contingency reserves $ (432,265) $ (372,336) Unrealized (gain) loss on investments 60,439 (14,573) Unearned premium reserve 14,099 12,539 Investments in limited partnerships (13,907) (13,002) Accrued expenses 6,257 6,076 Unearned ceding commissions 2,363 2,474 Change in fair market value of derivatives 2,377 1,827 Deferred policy acquisition costs (2,152) (2,642) Nonvested shares 1,640 1,841 Start-up expenditures, net 1,233 880 Fixed assets 1,197 836 Impairments on available-for-sale investment securities 1,155 — Loss reserves 965 2,622 Prepaid expenses (156) (123) Loss reserves - TCJA transition adjustment (59) (78) Organizational expenditures 4 5 Net deferred tax liability $ (356,810) $ (373,654) 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, 2022, we had net purchases of T&L Bonds in the amount of $57.7 million and had net purchases of T&L Bonds in the amount of $58.2 million during the year ended December 31, 2021. As of December 31, 2022 and 2021, we held $418.5 million and $360.8 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. For the year ended December 31, 2022, the Company had unrealized losses attributable to its available-for-sale investment securities that if sold would result in capital losses. Accordingly, management considered the ability and intent to hold such available-for-sale securities until recovery. At December 31, 2022 and 2021, after weighing all the evidence, management concluded that it was more likely than not that our ordinary and capital 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 unremitted 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 $3.4 billion. The associated withholding tax liability under the U.S./Ireland tax treaty would be approximately $169.7 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. At December 31, 2022 and 2021, the Company had no unrecognized tax benefits. As of December 31, 2022, the U.S. federal income tax returns for the tax years 2018 through 2021 remain subject to examination. The Company has not recorded any uncertain tax positions as of December 31, 2022 or December 31, 2021. |
Earnings per Share (EPS)
Earnings per Share (EPS) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Net income $ 831,353 $ 681,783 $ 413,041 Basic weighted average shares outstanding 107,205 111,164 106,098 Dilutive effect of nonvested shares 448 391 278 Diluted weighted average shares outstanding 107,653 111,555 106,376 Basic earnings per share $ 7.75 $ 6.13 $ 3.89 Diluted earnings per share $ 7.72 $ 6.11 $ 3.88 There were 77,759, 186,020 and 324,813 antidilutive shares for the years ended December 31, 2022, 2021 and 2020, respectively. Nonvested performance-based share awards are considered contingently issuable for purposes of the EPS calculation. The 2022 and 2021 performance-based share awards vest based upon our compounded annual book value per share growth percentage and relative total shareholder return during a three-year performance period. The performance-based share awards granted in years before 2021 vest based upon our compounded annual book value per share growth percentage during a three-year performance period. The following table summarizes the performance-based shares issuable if the reporting date was the end of the contingency period. 2022 Performance-Based Grants 2021 Performance-Based Grants 2020 Performance-Based Grants 2019 Performance-Based Grants 2018 Performance-Based Grants Reporting Date Percent Issuable Relative to Target As a Percent of Shares Issued Percent Issuable Relative to Target As a Percent of Shares Issued Percent Issuable Relative to Target December 31, 2022 131% 66% 100% 50% 100% December 31, 2021 100% 50% 100% 100% December 31, 2020 25% 100% 100% |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2022 | |
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: 2022 2021 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of year $ 65,280 $ (14,573) $ 50,707 $ 168,324 $ (30,050) $ 138,274 Other comprehensive income (loss): Unrealized holding (losses) gains on investments: Unrealized holding (losses) gains arising during the year (521,682) 75,118 (446,564) (94,986) 13,858 (81,128) Less: Reclassification adjustment for losses (gains) included in net income (1) (2) 13,172 (105) 13,067 (8,058) 1,619 (6,439) Net unrealized (losses) gains on investments (508,510) 75,013 (433,497) (103,044) 15,477 (87,567) Other comprehensive (loss) gain (508,510) 75,013 (433,497) (103,044) 15,477 (87,567) Balance at end of year $ (443,230) $ 60,440 $ (382,790) $ 65,280 $ (14,573) $ 50,707 _______________________________________________________________________________ (1) Included in net realized investments gains on our consolidated statements of comprehensive income. (2) 2021 Includes $7.6 million of income from other invested assets recognized in 2021 which was previously classified as accumulated other comprehensive income as of December 31, 2020. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsWe 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, 2022 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 556,438 $ — $ — $ 556,438 U.S. agency securities — 49,058 — 49,058 U.S. agency mortgage-backed securities — 783,743 — 783,743 Municipal debt securities — 602,690 — 602,690 Non-U.S. government securities — 62,399 — 62,399 Corporate debt securities — 1,414,321 — 1,414,321 Residential and commercial mortgage securities — 511,824 — 511,824 Asset-backed securities — 624,561 — 624,561 Money market funds 136,591 — — 136,591 Total assets at fair value (1) (2) $ 693,029 $ 4,048,596 $ — $ 4,741,625 December 31, 2021 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 448,793 $ — $ — $ 448,793 U.S. agency securities — 5,504 — 5,504 U.S. agency mortgage-backed securities — 1,008,863 — 1,008,863 Municipal debt securities — 627,599 — 627,599 Non-U.S. government securities — 79,743 — 79,743 Corporate debt securities — 1,455,247 — 1,455,247 Residential and commercial mortgage securities — 545,423 — 545,423 Asset-backed securities — 581,703 — 581,703 Money market funds 210,012 — — 210,012 Total assets at fair value (1) $ 658,805 $ 4,304,082 $ — $ 4,962,887 _______________________________________________________________________________ (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. (2) Does not include certain other invested assets that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, as applicable accounting standards do not provide for classification within the fair value hierarchy. |
Statutory Accounting
Statutory Accounting | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Statutory Accounting | Statutory AccountingOur 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) 2022 2021 2020 Essent Guaranty Statutory net income $ 590,505 $ 497,652 $ 312,091 Statutory surplus 1,020,034 1,043,866 1,048,878 Contingency reserve liability 2,048,740 1,792,671 1,499,782 Essent PA Statutory net income $ 859 $ 3,176 $ 4,560 Statutory surplus 52,609 56,136 54,354 Contingency reserve liability 56,744 57,384 56,032 Net income determined in accordance with statutory accounting practices differs from GAAP. In 2022 and 2021, 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, 2022 and 2021, 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, 2022, 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 2022, Essent Guaranty increased its contingency reserve by $256.1 million and Essent PA decreased its contingency reserve by $0.6 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 years ended December 31, 2022 and 2021, Essent Guaranty released contingency reserves of $19.4 million and $3.8 million, respectively, and Essent PA released contingency reserves of $1.5 million and less than $0.3 million, respectively, to unassigned funds upon completion of the 120 month holding period. 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, 2022 and 2021, all such requirements were met. Essent Re's statutory capital and surplus was $1.5 billion and $1.3 billion as of December 31, 2022 and 2021, respectively, and statutory net income was $315.0 million and $228.9 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, 2022 | |
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, 2022, Essent PA's risk-to-capital ratio was 0.6:1 and there were no amounts outstanding related to this agreement. |
Schedule I - Summary of Investm
Schedule I - Summary of Investments-Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Type of Investment Amortized Fair Amount at which Fixed maturities: Bonds: United States Government and government agencies and authorities $ 1,416,257 $ 1,273,844 $ 1,273,844 States, municipalities and political subdivisions 661,934 602,690 602,690 Residential and commercial mortgage securities 577,915 511,824 511,824 Asset-backed securities 660,345 624,561 624,561 Foreign government and agency securities 69,651 62,399 62,399 All other corporate bonds 1,546,472 1,414,280 1,414,280 Total fixed maturities 4,932,574 4,489,598 4,489,598 Short-term investments 252,282 252,027 252,027 Other invested assets 257,941 257,941 257,941 Total investments $ 5,442,797 $ 4,999,566 $ 4,999,566 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 Assets Investments Fixed maturities available for sale, at fair value (amortized cost: 2022 — $249,284; 2021 — $355,700) $ 226,718 $ 356,592 Short-term investments available for sale, at fair value (amortized cost: 2022 — $67,783; 2021 — $162,610) 67,622 162,611 Total investments available for sale 294,340 519,203 Other invested assets 2,166 — Cash 6,160 10,073 Due from affiliates 840 837 Investment in consolidated subsidiaries 4,577,128 4,123,426 Other assets 5,834 7,537 Total Assets $ 4,886,468 $ 4,661,076 Liabilities and stockholders' equity Liabilities Due to affiliates $ 752 $ 940 Credit facility borrowings (at carrying value, less unamortized deferred costs of $4,136 in 2022 and $5,177 in 2021) 420,864 419,823 Other accrued liabilities 2,543 4,199 Total liabilities 424,159 424,962 Commitments and contingencies Stockholders' Equity Common shares 1,615 1,641 Additional paid-in capital 1,350,377 1,428,952 Accumulated other comprehensive income (382,790) 50,707 Retained earnings 3,493,107 2,754,814 Total stockholders' equity 4,462,309 4,236,114 Total liabilities and stockholders' equity $ 4,886,468 $ 4,661,076 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) 2022 2021 2020 Revenues: Net investment income $ 6,433 $ 5,378 $ 1,181 Realized investment losses, net (12,170) (108) (10) Administrative service fees from subsidiaries 642 682 872 Total revenues (5,095) 5,952 2,043 Expenses: Administrative service fees to subsidiaries 3,908 4,338 3,728 Other operating expenses 7,614 7,193 5,929 Interest expense 15,609 5,889 6,446 Total expenses 27,131 17,420 16,103 Loss before income taxes and equity in undistributed net income in subsidiaries (32,226) (11,468) (14,060) Loss before equity in undistributed net income of subsidiaries (32,226) (11,468) (14,060) Equity in undistributed net income of subsidiaries 863,579 693,251 427,101 Net income $ 831,353 $ 681,783 $ 413,041 Other comprehensive income (loss): Change in unrealized (depreciation) appreciation of investments, net of tax (benefit) expense of $(75,013) in 2022, $(15,477) in 2021 and $16,836 in 2020 (433,497) (87,567) 82,087 Total other comprehensive (loss) income (433,497) (87,567) 82,087 Comprehensive income $ 397,856 $ 594,216 $ 495,128 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) 2022 2021 2020 Operating Activities Net income $ 831,353 $ 681,783 $ 413,041 Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income of subsidiaries (863,579) (693,251) (427,101) Loss on the sale of investments, net 12,170 108 10 Stock-based compensation expense 927 917 935 Amortization of premium on investment securities 800 1,438 435 Changes in assets and liabilities: Other assets 1,775 312 (319) Other accrued liabilities 19,232 21,447 18,208 Net cash provided by operating activities 2,678 12,754 5,209 Investing Activities Net change in short-term investments 94,988 189,804 (255,884) Investments in subsidiaries — — — Purchase of investments available for sale (157,468) (273,747) (205,668) Proceeds from maturities and paydowns of investments available for sale 81,351 18,384 838 Proceeds from sales of investments available for sale 164,733 101,618 3,386 Net cash provided by (used in) investing activities 183,604 36,059 (457,328) Financing Activities Issuance of common shares, net of costs — — 439,962 Credit facility borrowings — 200,000 200,000 Credit facility repayments — — (100,000) Treasury stock acquired (97,914) (163,855) (6,354) Payment of issuance costs for credit facility (154) (5,849) (5,236) Dividends paid (92,128) (77,724) (69,410) Net cash (used in) provided by financing activities (190,196) (47,428) 458,962 Net increase (decrease) in cash (3,914) 1,385 6,843 Cash at beginning of year 10,073 8,688 1,845 Cash at end of year $ 6,159 $ 10,073 $ 8,688 Supplemental Disclosure of Cash Flow Information Interest payments $ (13,595) $ (4,792) $ (5,714) Noncash Transactions Repayment of borrowings with term loan proceeds $ — $ (225,000) $ (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, 2022, Essent Guaranty had unassigned surplus of approximately $314.7 million. Essent PA had unassigned surplus of approximately $13.6 million as of December 31, 2022. As of January 1, 2023, Essent Guaranty has dividend capacity of $314.7 million and Essent PA has dividend capacity of $5.3 million. During the years ended December 31, 2022 and 2021, the Parent Company did not receive any dividends from its subsidiaries. During the year ended December 31, 2020, the Parent Company received dividends from Essent Re totaling $55.0 million. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV - Reinsurance | Schedule IV—Reinsurance Insurance Premiums Earned Years Ended December 31, 2022, 2021 and 2020 ($ in thousands) Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Assumed Premiums as a Percentage of Net Premiums 2022 950,200 (107,673) — 842,527 0.0 % 2021 983,457 (110,914) — 872,543 0.0 % 2020 951,302 (88,738) — 862,564 0.0 % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 | 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 principally comprised of limited partnership interests which are generally accounted for under the equity method of accounting or fair value using net asset value (or its equivalent) as a practical expedient, with changes in value reported in income from other invested assets. In applying the equity method or fair value using net asset value (or its equivalent) as a practical expedient, 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 or changes in fair value. 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 CostsWe 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. |
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 94% of earned premium in 2022. 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 $20.8 million and $63.8 million of earned premium related to policy cancellations for the years ended December 31, 2022 and 2021, 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 or SOFR 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. 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 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, 2024, as amended by ASU 2022-06, 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. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This update clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. The update clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. The update also requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The adoption of this ASU is not expected to have a material effect on the Company's consolidated operating results or financial position. |
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsWe 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, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Balances by Type of Long-Lived Assets | The balances by type were as follows at December 31: 2022 2021 (In thousands) Cost Accumulated Cost Accumulated Furniture and fixtures $ 2,809 $ (2,249) $ 2,321 $ (2,143) Office equipment 1,012 (894) 906 (842) Computer hardware 11,125 (10,607) 10,666 (9,962) Purchased software 39,015 (38,358) 38,466 (38,046) Costs of internal-use software 14,683 (11,332) 12,500 (10,028) Leasehold improvements 5,171 (3,912) 4,987 (3,319) Total $ 73,815 $ (67,352) $ 69,846 $ (64,340) |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments Available for Sale | Investments available for sale consist of the following: December 31, 2022 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 584,173 $ 341 $ (28,076) $ 556,438 U.S. agency securities 49,059 7 (8) 49,058 U.S. agency mortgage-backed securities 898,675 258 (115,190) 783,743 Municipal debt securities (1) 661,934 2,010 (61,254) 602,690 Non-U.S. government securities 69,651 — (7,252) 62,399 Corporate debt securities (2) 1,546,513 1,195 (133,387) 1,414,321 Residential and commercial mortgage securities 577,915 390 (66,481) 511,824 Asset-backed securities 660,345 72 (35,856) 624,561 Money market funds 136,591 — — 136,591 Total investments available for sale $ 5,184,856 $ 4,273 $ (447,504) $ 4,741,625 December 31, 2021 (In thousands) Amortized Unrealized Unrealized Fair Value U.S. Treasury securities $ 447,926 $ 3,833 $ (2,966) $ 448,793 U.S. agency securities 5,501 3 — 5,504 U.S. agency mortgage-backed securities 1,005,611 13,365 (10,113) 1,008,863 Municipal debt securities (1) 598,764 30,122 (1,287) 627,599 Non-U.S. government securities 77,366 3,232 (855) 79,743 Corporate debt securities (2) 1,428,645 36,067 (9,465) 1,455,247 Residential and commercial mortgage securities 541,638 10,452 (6,667) 545,423 Asset-backed securities 582,144 1,673 (2,114) 581,703 Money market funds 210,012 — — 210,012 Total investments available for sale $ 4,897,607 $ 98,747 $ (33,467) $ 4,962,887 _______________________________________________________________________________ December 31, December 31, (1) The following table summarizes municipal debt securities as of : 2022 2021 Special revenue bonds 79.0 % 77.1 % General obligation bonds 20.9 20.5 Certificate of participation bonds — 1.9 Tax allocation bonds 0.1 0.5 Total 100.0 % 100.0 % December 31, December 31, (2) The following table summarizes corporate debt securities as of : 2022 2021 Financial 40.5 % 33.7 % Consumer, non-cyclical 17.9 19.8 Communications 8.4 11.4 Consumer, cyclical 6.8 7.0 Industrial 6.8 7.0 Energy 6.4 6.0 Utilities 6.1 4.6 Technology 4.9 6.8 Basic Materials 2.1 3.7 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, 2022, 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 $ 175,645 $ 173,828 Due after 1 but within 5 years 355,565 335,166 Due after 5 but within 10 years 38,584 33,967 Due after 10 years 14,379 13,477 Subtotal 584,173 556,438 U.S. agency securities: Due in 1 year 47,433 47,434 Due after 1 but within 5 years 1,626 1,624 Subtotal 49,059 49,058 Municipal debt securities: Due in 1 year 6,974 6,932 Due after 1 but within 5 years 151,110 148,538 Due after 5 but within 10 years 154,029 143,560 Due after 10 years 349,821 303,660 Subtotal 661,934 602,690 Non-U.S. government securities: Due in 1 year 10,021 9,979 Due after 1 but within 5 years 33,761 32,536 Due after 5 but within 10 years 5,532 4,397 Due after 10 years 20,337 15,487 Subtotal 69,651 62,399 Corporate debt securities: Due in 1 year 250,596 248,482 Due after 1 but within 5 years 715,711 684,102 Due after 5 but within 10 years 419,632 355,500 Due after 10 years 160,574 126,237 Subtotal 1,546,513 1,414,321 U.S. agency mortgage-backed securities 898,675 783,743 Residential and commercial mortgage securities 577,915 511,824 Asset-backed securities 660,345 624,561 Money market funds 136,591 136,591 Total investments available for sale $ 5,184,856 $ 4,741,625 |
Schedule of Realized Gross Gains and Losses on Sale of Investments Available for Sale | The components of realized investment (losses) gains, net on the consolidated statements of comprehensive income were as follows: Year Ended December 31, (In thousands) 2022 2021 2020 Realized gross gains $ 14,420 $ 4,044 $ 5,608 Realized gross losses 14,864 3,626 2,482 Impairment loss 12,728 — 429 |
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, 2022 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 321,848 $ (12,381) $ 169,795 $ (15,695) $ 491,643 $ (28,076) U.S. agency securities 7,117 (8) — — 7,117 (8) U.S. agency mortgage-backed securities 351,310 (34,193) 415,743 (80,997) 767,053 (115,190) Municipal debt securities 335,784 (41,620) 64,766 (19,634) 400,550 (61,254) Non-U.S. government securities 48,071 (2,914) 14,328 (4,338) 62,399 (7,252) Corporate debt securities 811,217 (69,415) 421,307 (63,972) 1,232,524 (133,387) Residential and commercial mortgage securities 265,934 (22,628) 242,366 (43,853) 508,300 (66,481) Asset-backed securities 333,080 (15,454) 258,572 (20,402) 591,652 (35,856) Total $ 2,474,361 $ (198,613) $ 1,586,877 $ (248,891) $ 4,061,238 $ (447,504) Less than 12 months 12 months or more Total December 31, 2021 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 207,122 $ (2,170) $ 28,012 $ (796) $ 235,134 $ (2,966) U.S. agency mortgage-backed securities 582,108 (9,414) 26,131 (699) 608,239 (10,113) Municipal debt securities 91,719 (1,281) 312 (6) 92,031 (1,287) Non-U.S. government securities 22,986 (855) — — 22,986 (855) Corporate debt securities 522,120 (7,200) 46,875 (2,265) 568,995 (9,465) Residential and commercial mortgage securities 268,617 (5,200) 38,256 (1,467) 306,873 (6,667) Asset-backed securities 339,137 (1,954) 13,101 (160) 352,238 (2,114) Total $ 2,033,809 $ (28,074) $ 152,687 $ (5,393) $ 2,186,496 $ (33,467) |
Schedule of Net Investment Income | Net investment income consists of: Year Ended December 31, (In thousands) 2022 2021 2020 Fixed maturities $ 129,530 $ 94,117 $ 83,313 Short-term investments 2,319 171 1,669 Gross investment income 131,849 94,288 84,982 Investment expenses (7,440) (5,523) (4,895) Net investment income $ 124,409 $ 88,765 $ 80,087 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consists of the following at December 31: (In thousands) 2022 2021 Premiums receivable $ 46,228 $ 42,988 Other receivables 11,171 3,169 Total accounts receivable 57,399 46,157 Less: Allowance for doubtful accounts — — Accounts receivable, net $ 57,399 $ 46,157 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Net premiums written: Direct $ 927,702 $ 918,406 $ 922,851 Ceded (1) (107,673) (110,914) (88,738) Net premiums written $ 820,029 $ 807,492 $ 834,113 Net premiums earned: Direct $ 950,200 $ 983,457 $ 951,302 Ceded (1) (107,673) (110,914) (88,738) Net premiums earned $ 842,527 $ 872,543 $ 862,564 _______________________________________________________________________________ (1) Net of profit commission. The following tables summarizes Essent Guaranty's quota share reinsurance agreements as of December 31, 2022: QSR Agreement Coverage Period Ceding Percentage Ceding Commission Profit Commission QSR-2019 September 1, 2019-December 31, 2020 (1) 20% 63% (2) QSR-2022 January 1, 2022-December 31, 2022 20% 20% 62% _______________________________________________________________________________ (1) Under QSR-2019, Essent Guaranty cedes 40% of premiums on singles policies and 20% on all other policies. (2) The original profit commission on QSR-2019 was up to 60%; however because Essent Guaranty did not exercise its option to terminate the QSR Agreement on December 31, 2021, the maximum profit commission that Essent Guaranty could earn increased to 63% in 2022 and thereafter. |
Schedule of Coverages and Retentions | The following tables summarizes Essent Guaranty's excess of loss reinsurance agreements as of December 31, 2022: 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 2020 & 2021 Radnor Re 2021-1 Ltd. June 23, 2021 June 26, 2028 2021 Radnor Re 2021-2 Ltd. November 10, 2021 November 25, 2027 2021 & 2022 Panel of Reinsurers June 1, 2022 January 1, 2030 2021 & 2022 Radnor Re 2022-1 Ltd. September 21, 2022 September 25, 2028 _______________________________________________________________________________ (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, 2022: (In thousands) Remaining Vintage Year Remaining Remaining ILN Other Reinsurance Total Remaining 2015 & 2016 $ 5,931,479 $ 1,610,997 $ 41,764 $ — $ 41,764 $ 206,843 2017 5,810,456 1,527,469 225,562 85,627 (7) 311,189 216,143 2018 6,620,816 1,708,129 325,537 76,144 (8) 401,681 248,675 2019 (3) 8,185,651 2,108,121 418,006 46,448 (9) 464,454 214,708 2020 & 2021 (4) 40,676,403 10,206,068 451,093 — 451,093 278,919 2021 (5) 41,455,845 11,027,751 410,778 — 410,778 279,400 2021 & 2022 (9) 75,406,975 20,284,551 — 141,992 141,992 $ 507,114 2021 & 2022 (10) 33,815,842 9,079,729 237,868 — 237,868 $ 303,761 Total $ 217,903,467 $ 57,552,815 $ 2,110,608 $ 350,211 $ 2,460,819 $ 2,028,750 (11) _______________________________________________________________________________ (3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019. (4) Reinsurance coverage on new insurance written from August 1, 2020 through March 31, 2021. (5) Reinsurance coverage on new insurance written from April 1, 2021 through September 30, 2021. (6) Coverage provided immediately above the coverage provided by Radnor Re 2018-1 Ltd. (7) Coverage provided pari-passu to the coverage provided by Radnor Re 2019-1 Ltd. (8) Coverage provided pari-passu to the coverage provided by Radnor Re 2020-1 Ltd. (9) Reinsurance coverage on new insurance written from October 1, 2021 through December 31, 2022. (10) Reinsurance coverage on new insurance written from October 1, 2021 through July 31, 2022. (11) The total remaining first layer retention differs from the sum of the individual reinsurance transactions as a result of overlapping coverage between certain transactions. |
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, 2022: Maximum Exposure to Loss (In thousands) Total VIE Assets On - Balance Sheet Off - Balance Sheet Total Radnor Re 2018-1 Ltd. $ 225,562 $ 215 $ 27 $ 242 Radnor Re 2019-1 Ltd. 325,537 (2,080) 67 (2,013) Radnor Re 2019-2 Ltd. 41,764 (1,450) 1 (1,449) Radnor Re 2020-1 Ltd. 418,006 (1,398) 79 (1,319) Radnor Re 2021-1 Ltd. 451,093 (4,441) 95 (4,346) Radnor Re 2021-2 Ltd. 410,778 (2,772) 171 (2,601) Radnor Re 2022-1 Ltd. 237,868 979 86 1,065 Total $ 2,110,608 $ (10,947) $ 526 $ (10,421) |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Reserve for losses and LAE at beginning of year $ 407,445 $ 374,941 $ 69,362 Less: Reinsurance recoverables 25,940 19,061 71 Net reserve for losses and LAE at beginning of year 381,505 355,880 69,291 Add provision for losses and LAE, net of reinsurance, occurring in: Current year 99,372 97,256 317,516 Prior years (274,076) (66,199) (16,223) Net incurred losses and LAE during the current year (174,704) 31,057 301,293 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current year 224 388 1,018 Prior years 4,731 5,044 13,686 Net loss and LAE payments during the current year 4,955 5,432 14,704 Net reserve for losses and LAE at end of year 201,846 381,505 355,880 Plus: Reinsurance recoverables 14,618 25,940 19,061 Reserve for losses and LAE at end of year $ 216,464 $ 407,445 $ 374,941 The following table summarizes incurred loss and allocated loss adjustment expense development, net of reinsurance, 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, 2013 to 2021 is presented as supplementary information. Incurred Loss and Allocated LAE, As of December 31, 2022 (In thousands) Total of IBNR plus Expected Development on Reported Defaults Cumulative Number of Reported Defaults (1) Unaudited Accident Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 $ 2,986 $ 2,461 $ 2,008 $ 1,997 $ 2,060 $ 2,058 $ 2,058 $ 2,058 $ 2,058 $ 2,058 $ — 51 2014 6,877 4,312 3,323 2,984 2,930 2,897 2,882 2,869 2,870 1 92 2015 14,956 9,625 8,893 8,439 8,461 8,323 8,410 8,434 7 213 2016 21,889 11,890 9,455 9,219 8,972 8,614 8,861 27 244 2017 38,178 16,261 12,202 11,488 11,249 11,550 64 327 2018 36,438 23,168 19,536 17,402 17,249 188 492 2019 50,562 39,085 23,649 24,223 823 693 2020 317,516 269,410 53,045 3,550 1,156 2021 97,256 38,551 2,866 1,349 2022 99,372 7,430 10,768 Total $ 266,213 (1) Cumulative number of reported defaults includes cumulative paid claims plus loans in default by accident year as of December 31, 2022. 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, 2013 through 2021 is presented as supplementary information. (In thousands) Cumulative Paid Losses and Allocated LAE Unaudited Accident Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013 $ 239 $ 928 $ 1,501 $ 1,775 $ 1,880 $ 2,058 $ 2,058 $ 2,058 $ 2,058 $ 2,058 2014 138 1,587 2,463 2,787 2,897 2,882 2,867 2,856 2,856 2015 544 3,610 6,960 7,535 7,961 8,055 8,226 8,335 2016 927 4,896 6,947 7,864 8,270 8,205 8,468 2017 633 5,370 9,156 10,257 10,536 10,620 2018 1,310 8,067 13,406 13,927 14,536 2019 1,288 8,049 10,717 12,392 2020 1,018 2,499 4,022 2021 388 856 2022 224 Total $ 64,367 All outstanding liabilities before 2013, net of reinsurance — Reserve for losses and LAE, net of reinsurance $ 201,846 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, 2022: (In thousands) December 31, 2022 Reserve for losses and LAE, net of reinsurance $ 201,846 Reinsurance recoverables on unpaid claims 14,618 Total gross reserve for losses and LAE $ 216,464 For our mortgage insurance portfolio, our average annual payout of losses as of December 31, 2022 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 10 Average Payout 5 % 31 % 25 % 9 % 4 % 2 % 1 % 0 % 0 % 0 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Lease cost: Operating lease cost $ 3,908 $ 2,699 $ 2,532 Short-term lease cost — 2 19 Sublease income (138) (135) (131) Total lease cost $ 3,770 $ 2,566 $ 2,420 Other information: Weighted average remaining lease term - operating leases 6.9 years 2.8 years 3.8 years Weighted average discount rate - operating leases 3.6 % 4.0 % 3.9 % |
Schedule of Lease Liability Maturity | The following table presents a maturity analysis of our lease liabilities as follows at December 31, 2022: Year Ended December 31 (In thousands) 2023 $ 4,302 2024 2,603 2025 2,064 2026 1,277 2027 1,258 2028 and thereafter 5,327 Total lease payments to be paid 16,831 Less: Future interest expense (1,880) Present value of lease liabilities $ 14,951 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule 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 2022 2021 2020 March 31 $ 0.20 $ 0.16 $ 0.16 June 30 0.21 0.17 0.16 September 30 0.22 0.18 0.16 December 31 0.23 0.19 0.16 Total dividends per common share declared and paid $ 0.86 $ 0.70 $ 0.64 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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: 2020 Performance-Based Grants 2019 Performance-Based Grants 2018 Performance-Based Grants 2017 Performance-Based Grants Performance Compounded Nonvested Compounded Nonvested Compounded Nonvested Compounded Nonvested <13 % 0 % <14 % 0 % <15 % 0 % <16 % 0 % Threshold 13 % 10 % 14 % 10 % 15 % 25 % 16 % 25 % 14 % 35 % 15 % 35 % 16 % 50 % 17 % 50 % 15 % 60 % 16 % 60 % 17 % 75 % 18 % 75 % 16 % 85 % 17 % 85 % Maximum ≥17 % 100 % ≥18 % 100 % ≥18 % 100 % ≥19 % 100 % Relative Total Shareholder Return ≤25th percentile 50th percentile ≥75th percentile Three-Year Book 14% "Target" 100 % 150 % 200 % 12% 75 % 125 % 175 % 10% 50 % 100 % 150 % 8% 25 % 75 % 125 % 6% 0 % 50 % 100 % Relative Total Shareholder Return ≤25th percentile 50th percentile ≥75th percentile Three-Year Book 13% "Target" 100 % 150 % 200 % 11% 75 % 125 % 175 % 9% 50 % 100 % 150 % 7% 25 % 75 % 125 % 5% 0 % 50 % 100 % |
Schedule 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: 2022 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 500 $ 31.29 140 $ 45.31 461 $ 47.94 28 $ 41.75 Granted 308 14.83 87 46.15 161 42.56 25 40.28 Vested (139) 45.32 (86) 45.07 (192) 47.53 (14) 41.29 Forfeited (22) 15.45 (3) 46.91 (80) 48.73 (2) 42.70 Outstanding at end of year 647 $ 20.99 138 $ 45.94 350 $ 45.51 37 $ 40.86 2021 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 363 $ 47.09 153 $ 46.34 492 $ 46.59 21 $ 37.66 Granted 281 15.64 93 43.67 212 46.96 17 44.86 Vested (113) 45.02 (98) 45.40 (214) 43.74 (9) 38.53 Forfeited (31) 24.33 (8) 44.94 (29) 48.85 (1) 40.53 Outstanding at end of year 500 $ 31.29 140 $ 45.31 461 $ 47.94 28 $ 41.75 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 |
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) 2022 2021 2020 Compensation expense $ 18,381 $ 20,844 $ 18,462 Income tax benefit 3,636 4,088 3,511 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Current $ 98,666 $ 56,509 $ 38,402 Deferred 58,168 84,022 38,653 Total income tax expense $ 156,834 $ 140,531 $ 77,055 |
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: 2022 2021 2020 ($ in thousands) $ % of pretax $ % of pretax $ % of pretax Tax provision at weighted average statutory rates $ 148,176 15.0 % $ 127,046 15.5 % $ 75,763 15.5 % State taxes, net of federal benefit 6,306 0.6 11,295 1.4 — 0.0 Non-deductible expenses 4,041 0.4 3,652 0.4 2,482 0.5 Tax exempt interest, net of proration (1,463) (0.1) (1,606) (0.2) (1,462) (0.3) Excess tax (benefit) deficit from stock-based compensation 75 0.0 61 — (599) (0.1) Other (301) 0.0 83 0.0 871 0.1 Total income tax expense $ 156,834 15.9 % $ 140,531 17.1 % $ 77,055 15.7 % |
Schedule of Net Deferred Tax (Liability) Asset and Components | The net deferred tax liability was comprised of the following at December 31: (In thousands) 2022 2021 Deferred tax assets $ 91,729 $ 29,100 Deferred tax liabilities (448,539) (402,754) Net deferred tax liability $ (356,810) $ (373,654) The components of the net deferred tax liability were as follows at December 31: (In thousands) 2022 2021 Contingency reserves $ (432,265) $ (372,336) Unrealized (gain) loss on investments 60,439 (14,573) Unearned premium reserve 14,099 12,539 Investments in limited partnerships (13,907) (13,002) Accrued expenses 6,257 6,076 Unearned ceding commissions 2,363 2,474 Change in fair market value of derivatives 2,377 1,827 Deferred policy acquisition costs (2,152) (2,642) Nonvested shares 1,640 1,841 Start-up expenditures, net 1,233 880 Fixed assets 1,197 836 Impairments on available-for-sale investment securities 1,155 — Loss reserves 965 2,622 Prepaid expenses (156) (123) Loss reserves - TCJA transition adjustment (59) (78) Organizational expenditures 4 5 Net deferred tax liability $ (356,810) $ (373,654) |
Earnings per Share (EPS) (Table
Earnings per Share (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Net income $ 831,353 $ 681,783 $ 413,041 Basic weighted average shares outstanding 107,205 111,164 106,098 Dilutive effect of nonvested shares 448 391 278 Diluted weighted average shares outstanding 107,653 111,555 106,376 Basic earnings per share $ 7.75 $ 6.13 $ 3.89 Diluted earnings per share $ 7.72 $ 6.11 $ 3.88 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Nonvested performance-based share awards are considered contingently issuable for purposes of the EPS calculation. The 2022 and 2021 performance-based share awards vest based upon our compounded annual book value per share growth percentage and relative total shareholder return during a three-year performance period. The performance-based share awards granted in years before 2021 vest based upon our compounded annual book value per share growth percentage during a three-year performance period. The following table summarizes the performance-based shares issuable if the reporting date was the end of the contingency period. 2022 Performance-Based Grants 2021 Performance-Based Grants 2020 Performance-Based Grants 2019 Performance-Based Grants 2018 Performance-Based Grants Reporting Date Percent Issuable Relative to Target As a Percent of Shares Issued Percent Issuable Relative to Target As a Percent of Shares Issued Percent Issuable Relative to Target December 31, 2022 131% 66% 100% 50% 100% December 31, 2021 100% 50% 100% 100% December 31, 2020 25% 100% 100% |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of 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: 2022 2021 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of year $ 65,280 $ (14,573) $ 50,707 $ 168,324 $ (30,050) $ 138,274 Other comprehensive income (loss): Unrealized holding (losses) gains on investments: Unrealized holding (losses) gains arising during the year (521,682) 75,118 (446,564) (94,986) 13,858 (81,128) Less: Reclassification adjustment for losses (gains) included in net income (1) (2) 13,172 (105) 13,067 (8,058) 1,619 (6,439) Net unrealized (losses) gains on investments (508,510) 75,013 (433,497) (103,044) 15,477 (87,567) Other comprehensive (loss) gain (508,510) 75,013 (433,497) (103,044) 15,477 (87,567) Balance at end of year $ (443,230) $ 60,440 $ (382,790) $ 65,280 $ (14,573) $ 50,707 _______________________________________________________________________________ (1) Included in net realized investments gains on our consolidated statements of comprehensive income. (2) 2021 Includes $7.6 million of income from other invested assets recognized in 2021 which was previously classified as accumulated other comprehensive income as of December 31, 2020. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 556,438 $ — $ — $ 556,438 U.S. agency securities — 49,058 — 49,058 U.S. agency mortgage-backed securities — 783,743 — 783,743 Municipal debt securities — 602,690 — 602,690 Non-U.S. government securities — 62,399 — 62,399 Corporate debt securities — 1,414,321 — 1,414,321 Residential and commercial mortgage securities — 511,824 — 511,824 Asset-backed securities — 624,561 — 624,561 Money market funds 136,591 — — 136,591 Total assets at fair value (1) (2) $ 693,029 $ 4,048,596 $ — $ 4,741,625 December 31, 2021 (In thousands) Quoted Prices Significant Significant Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 448,793 $ — $ — $ 448,793 U.S. agency securities — 5,504 — 5,504 U.S. agency mortgage-backed securities — 1,008,863 — 1,008,863 Municipal debt securities — 627,599 — 627,599 Non-U.S. government securities — 79,743 — 79,743 Corporate debt securities — 1,455,247 — 1,455,247 Residential and commercial mortgage securities — 545,423 — 545,423 Asset-backed securities — 581,703 — 581,703 Money market funds 210,012 — — 210,012 Total assets at fair value (1) $ 658,805 $ 4,304,082 $ — $ 4,962,887 _______________________________________________________________________________ (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. (2) Does not include certain other invested assets that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, as applicable accounting standards do not provide for classification within the fair value hierarchy. |
Statutory Accounting (Tables)
Statutory Accounting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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) 2022 2021 2020 Essent Guaranty Statutory net income $ 590,505 $ 497,652 $ 312,091 Statutory surplus 1,020,034 1,043,866 1,048,878 Contingency reserve liability 2,048,740 1,792,671 1,499,782 Essent PA Statutory net income $ 859 $ 3,176 $ 4,560 Statutory surplus 52,609 56,136 54,354 Contingency reserve liability 56,744 57,384 56,032 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) - state | 12 Months Ended | |||
Jan. 01, 2021 | Dec. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2022 | |
Maximum | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Residential mortgage down payment percentage for which mortgage insurance is generally required (less than) | 20% | |||
Affiliated Entity | 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 | 35% | 25% | ||
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 (in excess of) | 25% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Long-Lived Assets | ||
Cost | $ 73,815 | $ 69,846 |
Accumulated Depreciation/ Amortization | $ (67,352) | (64,340) |
Furniture and fixtures | ||
Long-Lived Assets | ||
Estimated useful lives | 5 years | |
Cost | $ 2,809 | 2,321 |
Accumulated Depreciation/ Amortization | $ (2,249) | (2,143) |
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 | |
Costs of internal-use software | ||
Long-Lived Assets | ||
Estimated useful lives | 3 years | |
Cost | $ 14,683 | 12,500 |
Accumulated Depreciation/ Amortization | (11,332) | (10,028) |
Office equipment | ||
Long-Lived Assets | ||
Cost | 1,012 | 906 |
Accumulated Depreciation/ Amortization | (894) | (842) |
Computer hardware | ||
Long-Lived Assets | ||
Cost | 11,125 | 10,666 |
Accumulated Depreciation/ Amortization | (10,607) | (9,962) |
Purchased software | ||
Long-Lived Assets | ||
Cost | 39,015 | 38,466 |
Accumulated Depreciation/ Amortization | (38,358) | (38,046) |
Leasehold improvements | ||
Long-Lived Assets | ||
Cost | 5,171 | 4,987 |
Accumulated Depreciation/ Amortization | $ (3,912) | $ (3,319) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Policy Acquisition Costs | |||
Policy acquisition costs deferred | $ 3.6 | $ 5.8 | $ 10.1 |
Other Underwriting and Operating Expenses | |||
Deferred Policy Acquisition Costs | |||
Amortization of deferred policy acquisition costs | $ 5.8 | $ 10.6 | $ 8.8 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Insurance Premium Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Earned premiums from mortgage guaranty insurance monthly policies as a percentage of total earned premiums | 94% | |
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 | $ 20.8 | $ 63.8 |
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, 2022 USD ($) payment | Dec. 31, 2021 USD ($) | |
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 - Schedule of Avail
Investments - Schedule of Available for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 5,184,856 | $ 4,897,607 |
Unrealized Gains | 4,273 | 98,747 |
Unrealized Losses | (447,504) | (33,467) |
Fair Value | 4,741,625 | 4,962,887 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 584,173 | 447,926 |
Unrealized Gains | 341 | 3,833 |
Unrealized Losses | (28,076) | (2,966) |
Fair Value | 556,438 | 448,793 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 49,059 | 5,501 |
Unrealized Gains | 7 | 3 |
Unrealized Losses | (8) | 0 |
Fair Value | 49,058 | 5,504 |
U.S. agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 898,675 | 1,005,611 |
Unrealized Gains | 258 | 13,365 |
Unrealized Losses | (115,190) | (10,113) |
Fair Value | 783,743 | 1,008,863 |
Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 661,934 | 598,764 |
Unrealized Gains | 2,010 | 30,122 |
Unrealized Losses | (61,254) | (1,287) |
Fair Value | 602,690 | 627,599 |
Non-U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 69,651 | 77,366 |
Unrealized Gains | 0 | 3,232 |
Unrealized Losses | (7,252) | (855) |
Fair Value | 62,399 | 79,743 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,546,513 | 1,428,645 |
Unrealized Gains | 1,195 | 36,067 |
Unrealized Losses | (133,387) | (9,465) |
Fair Value | 1,414,321 | 1,455,247 |
Residential and commercial mortgage securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 577,915 | 541,638 |
Unrealized Gains | 390 | 10,452 |
Unrealized Losses | (66,481) | (6,667) |
Fair Value | 511,824 | 545,423 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 660,345 | 582,144 |
Unrealized Gains | 72 | 1,673 |
Unrealized Losses | (35,856) | (2,114) |
Fair Value | 624,561 | 581,703 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 136,591 | 210,012 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 136,591 | $ 210,012 |
Investments - Schedule of Munic
Investments - Schedule of Municipal Debt Securities and Corporate Debt Securities (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 100% | 100% |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 100% | 100% |
Special revenue bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 79% | 77.10% |
General obligation bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 20.90% | 20.50% |
Certificate of participation bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 0% | 1.90% |
Tax allocation bonds | Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 0.10% | 0.50% |
Financial | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 40.50% | 33.70% |
Consumer, non-cyclical | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 17.90% | 19.80% |
Communications | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 8.40% | 11.40% |
Consumer, cyclical | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 6.80% | 7% |
Industrial | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 6.80% | 7% |
Energy | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 6.40% | 6% |
Utilities | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 6.10% | 4.60% |
Technology | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 4.90% | 6.80% |
Basic Materials | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 2.10% | 3.70% |
Government | Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage of debt securities | 0.10% | 0% |
Investments - Schedule of Ava_2
Investments - Schedule of Available For Sale Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Amortized Cost | $ 5,184,856 | $ 4,897,607 |
Fair Value | ||
Fair Value | 4,741,625 | 4,962,887 |
U.S. Treasury securities | ||
Amortized Cost | ||
Due in 1 year | 175,645 | |
Due after 1 but within 5 years | 355,565 | |
Due after 5 but within 10 years | 38,584 | |
Due after 10 years | 14,379 | |
Subtotal | 584,173 | |
Amortized Cost | 584,173 | 447,926 |
Fair Value | ||
Due in 1 year | 173,828 | |
Due after 1 but within 5 years | 335,166 | |
Due after 5 but within 10 years | 33,967 | |
Due after 10 years | 13,477 | |
Subtotal | 556,438 | |
Fair Value | 556,438 | 448,793 |
U.S. agency securities | ||
Amortized Cost | ||
Due in 1 year | 47,433 | |
Due after 1 but within 5 years | 1,626 | |
Subtotal | 49,059 | |
Amortized Cost | 49,059 | 5,501 |
Fair Value | ||
Due in 1 year | 47,434 | |
Due after 1 but within 5 years | 1,624 | |
Subtotal | 49,058 | |
Fair Value | 49,058 | 5,504 |
Municipal debt securities | ||
Amortized Cost | ||
Due in 1 year | 6,974 | |
Due after 1 but within 5 years | 151,110 | |
Due after 5 but within 10 years | 154,029 | |
Due after 10 years | 349,821 | |
Subtotal | 661,934 | |
Amortized Cost | 661,934 | 598,764 |
Fair Value | ||
Due in 1 year | 6,932 | |
Due after 1 but within 5 years | 148,538 | |
Due after 5 but within 10 years | 143,560 | |
Due after 10 years | 303,660 | |
Subtotal | 602,690 | |
Fair Value | 602,690 | 627,599 |
Non-U.S. government securities | ||
Amortized Cost | ||
Due in 1 year | 10,021 | |
Due after 1 but within 5 years | 33,761 | |
Due after 5 but within 10 years | 5,532 | |
Due after 10 years | 20,337 | |
Subtotal | 69,651 | |
Amortized Cost | 69,651 | 77,366 |
Fair Value | ||
Due in 1 year | 9,979 | |
Due after 1 but within 5 years | 32,536 | |
Due after 5 but within 10 years | 4,397 | |
Due after 10 years | 15,487 | |
Subtotal | 62,399 | |
Fair Value | 62,399 | 79,743 |
Corporate debt securities | ||
Amortized Cost | ||
Due in 1 year | 250,596 | |
Due after 1 but within 5 years | 715,711 | |
Due after 5 but within 10 years | 419,632 | |
Due after 10 years | 160,574 | |
Subtotal | 1,546,513 | |
Amortized Cost | 1,546,513 | 1,428,645 |
Fair Value | ||
Due in 1 year | 248,482 | |
Due after 1 but within 5 years | 684,102 | |
Due after 5 but within 10 years | 355,500 | |
Due after 10 years | 126,237 | |
Subtotal | 1,414,321 | |
Fair Value | 1,414,321 | 1,455,247 |
U.S. agency mortgage-backed securities | ||
Amortized Cost | ||
Amortized Cost | 898,675 | 1,005,611 |
Fair Value | ||
Fair Value | 783,743 | 1,008,863 |
Residential and commercial mortgage securities | ||
Amortized Cost | ||
Amortized Cost | 577,915 | 541,638 |
Fair Value | ||
Fair Value | 511,824 | 545,423 |
Asset-backed securities | ||
Amortized Cost | ||
Amortized Cost | 660,345 | 582,144 |
Fair Value | ||
Fair Value | 624,561 | 581,703 |
Money market funds | ||
Amortized Cost | ||
Amortized Cost | 136,591 | 210,012 |
Fair Value | ||
Fair Value | $ 136,591 | $ 210,012 |
Investments - Schedule of Reali
Investments - Schedule of Realized Gain and Loss and Investments in Unrealized Loss Position (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Realized gross gains | $ 14,420 | $ 4,044 | $ 5,608 |
Realized gross losses | 14,864 | 3,626 | 2,482 |
Impairment loss | 12,728 | 0 | $ 429 |
Fair Value | |||
Less than 12 months | 2,474,361 | 2,033,809 | |
12 months or more | 1,586,877 | 152,687 | |
Total | 4,061,238 | 2,186,496 | |
Gross Unrealized Losses | |||
Less than 12 months | (198,613) | (28,074) | |
12 months or more | (248,891) | (5,393) | |
Total | (447,504) | (33,467) | |
U.S. Treasury securities | |||
Fair Value | |||
Less than 12 months | 321,848 | 207,122 | |
12 months or more | 169,795 | 28,012 | |
Total | 491,643 | 235,134 | |
Gross Unrealized Losses | |||
Less than 12 months | (12,381) | (2,170) | |
12 months or more | (15,695) | (796) | |
Total | (28,076) | (2,966) | |
U.S. agency securities | |||
Fair Value | |||
Less than 12 months | 7,117 | ||
12 months or more | 0 | ||
Total | 7,117 | ||
Gross Unrealized Losses | |||
Less than 12 months | (8) | ||
12 months or more | 0 | ||
Total | (8) | ||
U.S. agency mortgage-backed securities | |||
Fair Value | |||
Less than 12 months | 351,310 | 582,108 | |
12 months or more | 415,743 | 26,131 | |
Total | 767,053 | 608,239 | |
Gross Unrealized Losses | |||
Less than 12 months | (34,193) | (9,414) | |
12 months or more | (80,997) | (699) | |
Total | (115,190) | (10,113) | |
Municipal debt securities | |||
Fair Value | |||
Less than 12 months | 335,784 | 91,719 | |
12 months or more | 64,766 | 312 | |
Total | 400,550 | 92,031 | |
Gross Unrealized Losses | |||
Less than 12 months | (41,620) | (1,281) | |
12 months or more | (19,634) | (6) | |
Total | (61,254) | (1,287) | |
Non-U.S. government securities | |||
Fair Value | |||
Less than 12 months | 48,071 | 22,986 | |
12 months or more | 14,328 | 0 | |
Total | 62,399 | 22,986 | |
Gross Unrealized Losses | |||
Less than 12 months | (2,914) | (855) | |
12 months or more | (4,338) | 0 | |
Total | (7,252) | (855) | |
Corporate debt securities | |||
Fair Value | |||
Less than 12 months | 811,217 | 522,120 | |
12 months or more | 421,307 | 46,875 | |
Total | 1,232,524 | 568,995 | |
Gross Unrealized Losses | |||
Less than 12 months | (69,415) | (7,200) | |
12 months or more | (63,972) | (2,265) | |
Total | (133,387) | (9,465) | |
Residential and commercial mortgage securities | |||
Fair Value | |||
Less than 12 months | 265,934 | 268,617 | |
12 months or more | 242,366 | 38,256 | |
Total | 508,300 | 306,873 | |
Gross Unrealized Losses | |||
Less than 12 months | (22,628) | (5,200) | |
12 months or more | (43,853) | (1,467) | |
Total | (66,481) | (6,667) | |
Asset-backed securities | |||
Fair Value | |||
Less than 12 months | 333,080 | 339,137 | |
12 months or more | 258,572 | 13,101 | |
Total | 591,652 | 352,238 | |
Gross Unrealized Losses | |||
Less than 12 months | (15,454) | (1,954) | |
12 months or more | (20,402) | (160) | |
Total | $ (35,856) | $ (2,114) |
Investments - Narrative (Detail
Investments - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) security | Dec. 31, 2020 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||
Number of investment securities in unrealized loss position | security | 2,578 | 1,180 | |
Impairment loss | $ 12,728 | $ 0 | $ 429 |
Other invested assets | 257,941 | 170,472 | |
Income from other invested assets | 28,676 | 56,386 | (215) |
Fair value of investments deposited with insurance regulatory authorities to meet statutory requirements | 9,100 | 9,700 | |
Essent Re | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fair value of the required investments on deposit in trusts | 972,400 | 982,600 | |
Essent Guaranty | |||
Debt Securities, Available-for-sale [Line Items] | |||
Assets on deposit under reinsurance agreement | 8,600 | 8,500 | |
Assets on deposit for the benefit of the sponsor | 9,100 | $ 9,000 | |
Limited Partnership Investment | |||
Debt Securities, Available-for-sale [Line Items] | |||
Other assets, fair value | 165,700 | ||
Investment company, committed capital | $ 42,900 | ||
Limited Partnership Investment | Minimum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment company, asset liquidation period | 2 years | ||
Limited Partnership Investment | Maximum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment company, asset liquidation period | 9 years | ||
Limited Partnership Investment | Revision adjustment | |||
Debt Securities, Available-for-sale [Line Items] | |||
Income from other invested assets | $ 7,600 | ||
Securities | Credit Concentration Risk | Internal Investment Grade | |||
Debt Securities, Available-for-sale [Line Items] | |||
Concentration risk, percentage | 98% |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of net investment income | |||
Gross investment income | $ 131,849 | $ 94,288 | $ 84,982 |
Investment expenses | (7,440) | (5,523) | (4,895) |
Net investment income | 124,409 | 88,765 | 80,087 |
Fixed maturities | |||
Components of net investment income | |||
Gross investment income | 129,530 | 94,117 | 83,313 |
Short-term investments | |||
Components of net investment income | |||
Gross investment income | $ 2,319 | $ 171 | $ 1,669 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable | |||
Premiums receivable | $ 46,228,000 | $ 42,988,000 | |
Other receivables | 11,171,000 | 3,169,000 | |
Total accounts receivable | 57,399,000 | 46,157,000 | |
Less: Allowance for doubtful accounts | 0 | 0 | |
Accounts receivable, net | 57,399,000 | 46,157,000 | |
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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net premiums written: | |||
Direct | $ 927,702 | $ 918,406 | $ 922,851 |
Ceded | (107,673) | (110,914) | (88,738) |
Net premiums written | 820,029 | 807,492 | 834,113 |
Net premiums earned: | |||
Direct | 950,200 | 983,457 | 951,302 |
Ceded | (107,673) | (110,914) | (88,738) |
Net premiums earned | $ 842,527 | $ 872,543 | $ 862,564 |
Reinsurance - Quota Share Reins
Reinsurance - Quota Share Reinsurance (Details) - Reinsurance Policy, Type [Axis]: Quota Share Reinsurance - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
QSR-2019 | ||
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Net [Abstract] | ||
Ceded premiums earned related to percent of risk on all other eligible policies written | 20% | |
Ceding commission | 20% | |
Profit commission, maximum | 60% | 63% |
Ceded premiums earned related to percent of risk on eligible single premium policies | 40% | |
RIF ceded | $ 6.9 | |
QSR-2022 | ||
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Net [Abstract] | ||
Ceded premiums earned related to percent of risk on all other eligible policies written | 20% | |
Ceding commission | 20% | |
Profit commission, maximum | 62% | |
RIF ceded | $ 6.9 |
Reinsurance - Excess of Loss Re
Reinsurance - Excess of Loss Reinsurance (Details) - Reinsurance Policy, Type [Axis]: Mortgage Insurance | 12 Months Ended |
Dec. 31, 2022 | |
Other Reinsurance | Essent Guaranty | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
VIE | Mortgage Insurance Linked Notes | Radnor Re | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Reinsurance debt issued to cover insurance term | 10 years |
VIE | Radnor Re | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
Reinsurance - Premium Details (
Reinsurance - Premium Details (Details) - Reinsurance Policy, Type [Axis]: Vintage Year 2017 | Dec. 31, 2022 |
Radnor Re 2018-1 Ltd. | |
Effects of Reinsurance [Line Items] | |
Risk margin increase after optional termination date | 50% |
Panel of Reinsurers | |
Effects of Reinsurance [Line Items] | |
Risk margin increase after optional termination date | 50% |
Reinsurance - Essent Guaranty's
Reinsurance - Essent Guaranty's Excess of Loss Reinsurance Coverages and Retentions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | $ 217,903,467 |
Remaining Risk in Force | 57,552,815 |
Remaining Reinsurance in Force | 2,460,819 |
Remaining First Layer Retention | 2,028,750 |
ILN | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 2,110,608 |
Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 350,211 |
Reinsurance Policy, Type [Axis]: Vintage Year 2015 And 2016 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 5,931,479 |
Remaining Risk in Force | 1,610,997 |
Remaining Reinsurance in Force | 41,764 |
Remaining First Layer Retention | 206,843 |
Reinsurance Policy, Type [Axis]: Vintage Year 2015 And 2016 | Radnor Re 2019-2 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 41,764 |
Reinsurance Policy, Type [Axis]: Vintage Year 2015 And 2016 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Reinsurance Policy, Type [Axis]: Vintage Year 2017 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 5,810,456 |
Remaining Risk in Force | 1,527,469 |
Remaining Reinsurance in Force | 311,189 |
Remaining First Layer Retention | 216,143 |
Reinsurance Policy, Type [Axis]: Vintage Year 2017 | Radnor Re 2018-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 225,562 |
Reinsurance Policy, Type [Axis]: Vintage Year 2017 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 85,627 |
Reinsurance Policy, Type [Axis]: Vintage Year 2018 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 6,620,816 |
Remaining Risk in Force | 1,708,129 |
Remaining Reinsurance in Force | 401,681 |
Remaining First Layer Retention | 248,675 |
Reinsurance Policy, Type [Axis]: Vintage Year 2018 | Radnor Re 2019-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 325,537 |
Reinsurance Policy, Type [Axis]: Vintage Year 2018 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 76,144 |
Reinsurance Policy, Type [Axis]: Vintage Year 2019 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 8,185,651 |
Remaining Risk in Force | 2,108,121 |
Remaining Reinsurance in Force | 464,454 |
Remaining First Layer Retention | 214,708 |
Reinsurance Policy, Type [Axis]: Vintage Year 2019 | Radnor Re 2020-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 418,006 |
Reinsurance Policy, Type [Axis]: Vintage Year 2019 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 46,448 |
Reinsurance Policy, Type [Axis]: Vintage Year 2020 And 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 40,676,403 |
Remaining Risk in Force | 10,206,068 |
Remaining Reinsurance in Force | 451,093 |
Remaining First Layer Retention | 278,919 |
Reinsurance Policy, Type [Axis]: Vintage Year 2020 And 2021 | Radnor Re 2021-1 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 451,093 |
Reinsurance Policy, Type [Axis]: Vintage Year 2020 And 2021 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 41,455,845 |
Remaining Risk in Force | 11,027,751 |
Remaining Reinsurance in Force | 410,778 |
Remaining First Layer Retention | 279,400 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 | Radnor Re 2021-2 Ltd. | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 410,778 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 | Other Reinsurance | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through December 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 75,406,975 |
Remaining Risk in Force | 20,284,551 |
Remaining Reinsurance in Force | 141,992 |
Remaining First Layer Retention | 507,114 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 And 2022 | Written From October 1 Through July 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Insurance in Force | 33,815,842 |
Remaining Risk in Force | 9,079,729 |
Remaining Reinsurance in Force | 237,868 |
Remaining First Layer Retention | 303,761 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 And 2022 | Radnor Re 2021-2 Ltd. | Written From October 1 Through December 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 0 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 And 2022 | Radnor Re 2021-2 Ltd. | Written From October 1 Through July 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 237,868 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 And 2022 | Other Reinsurance | Written From October 1 Through December 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Remaining Reinsurance in Force | 141,992 |
Reinsurance Policy, Type [Axis]: Vintage Year 2021 And 2022 | Other Reinsurance | Written From October 1 Through July 31, 2022 | |
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, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Total VIE Assets | $ 5,723,797 | $ 5,722,174 |
VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 2,110,608 | |
Maximum Exposure to Loss, On - Balance Sheet | (10,947) | |
Maximum Exposure to Loss, Off - Balance Sheet | 526 | |
Maximum Exposure to Loss, Total | (10,421) | |
Radnor Re 2018-1 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 225,562 | |
Maximum Exposure to Loss, On - Balance Sheet | 215 | |
Maximum Exposure to Loss, Off - Balance Sheet | 27 | |
Maximum Exposure to Loss, Total | 242 | |
Radnor Re 2019-1 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 325,537 | |
Maximum Exposure to Loss, On - Balance Sheet | (2,080) | |
Maximum Exposure to Loss, Off - Balance Sheet | 67 | |
Maximum Exposure to Loss, Total | (2,013) | |
Radnor Re 2019-2 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 41,764 | |
Maximum Exposure to Loss, On - Balance Sheet | (1,450) | |
Maximum Exposure to Loss, Off - Balance Sheet | 1 | |
Maximum Exposure to Loss, Total | (1,449) | |
Radnor Re 2020-1 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 418,006 | |
Maximum Exposure to Loss, On - Balance Sheet | (1,398) | |
Maximum Exposure to Loss, Off - Balance Sheet | 79 | |
Maximum Exposure to Loss, Total | (1,319) | |
Radnor Re 2021-1 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 451,093 | |
Maximum Exposure to Loss, On - Balance Sheet | (4,441) | |
Maximum Exposure to Loss, Off - Balance Sheet | 95 | |
Maximum Exposure to Loss, Total | (4,346) | |
Radnor Re 2021-2 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 410,778 | |
Maximum Exposure to Loss, On - Balance Sheet | (2,772) | |
Maximum Exposure to Loss, Off - Balance Sheet | 171 | |
Maximum Exposure to Loss, Total | (2,601) | |
Radnor Re 2022-1 Ltd. | VIE | ||
Variable Interest Entity [Line Items] | ||
Total VIE Assets | 237,868 | |
Maximum Exposure to Loss, On - Balance Sheet | 979 | |
Maximum Exposure to Loss, Off - Balance Sheet | 86 | |
Maximum Exposure to Loss, Total | $ 1,065 |
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) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (LAE) | ||||
Reserve for losses and LAE at beginning of year | $ 407,445 | $ 374,941 | $ 69,362 | |
Less: Reinsurance recoverables | 14,618 | 25,940 | 19,061 | $ 71 |
Net reserve for losses and LAE at beginning of year | 381,505 | 355,880 | 69,291 | |
Add provision for losses and LAE, net of reinsurance, occurring in: | ||||
Current year | 99,372 | 97,256 | 317,516 | |
Prior years | (274,076) | (66,199) | (16,223) | |
Net incurred losses and LAE during the current year | (174,704) | 31,057 | 301,293 | |
Deduct payments for losses and LAE, net of reinsurance, occurring in: | ||||
Current year | 224 | 388 | 1,018 | |
Prior years | 4,731 | 5,044 | 13,686 | |
Net loss and LAE payments during the current year | 4,955 | 5,432 | 14,704 | |
Net reserve for losses and LAE at end of year | 201,846 | 381,505 | 355,880 | |
Plus: Reinsurance recoverables | 14,618 | 25,940 | 19,061 | $ 71 |
Reserve for losses and LAE at end of year | $ 216,464 | $ 407,445 | $ 374,941 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 21 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2019 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Incurred claims and claim adjustment expenses | $ 4,731 | $ 5,044 | $ 13,686 | ||||
Favorable prior year development | 274,076 | 66,199 | 16,223 | ||||
Reserve for losses and LAE, for prior years | 102,700 | 284,600 | $ 284,600 | ||||
Reduction of reserves on hurricane-related defaults | $ 164,100 | ||||||
Percent of defaults cured | 99% | ||||||
Reserve for losses and LAE | $ 216,464 | $ 407,445 | $ 374,941 | $ 407,445 | $ 69,362 | ||
COVID-19 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Reserve rate | 2% | 4% | 7% |
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, 2022 USD ($) loan | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2016 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2014 USD ($) | Dec. 31, 2013 USD ($) |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Loss and Allocated LAE, For the Years Ended December 31, | $ 266,213 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | 64,367 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 0 | |||||||||
Reserve for losses and LAE, net of reinsurance | 201,846 | $ 381,505 | $ 355,880 | $ 69,291 | ||||||
Reinsurance recoverables | 14,618 | 25,940 | 19,061 | 71 | ||||||
Total gross reserve for losses and LAE | 216,464 | 407,445 | 374,941 | 69,362 | ||||||
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 | 2,058 | $ 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 | 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, | 2,870 | 2,869 | 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, | $ 2,856 | 2,856 | 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, | 8,434 | 8,410 | 8,323 | 8,461 | 8,439 | 8,893 | 9,625 | 14,956 | ||
Total of IBNR plus Expected Development on Reported Defaults | $ 7 | |||||||||
Cumulative Number of Reported Defaults | loan | 213 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 8,335 | 8,226 | 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, | 8,861 | 8,614 | 8,972 | 9,219 | 9,455 | 11,890 | 21,889 | |||
Total of IBNR plus Expected Development on Reported Defaults | $ 27 | |||||||||
Cumulative Number of Reported Defaults | loan | 244 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 8,468 | 8,205 | 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, | 11,550 | 11,249 | 11,488 | 12,202 | 16,261 | 38,178 | ||||
Total of IBNR plus Expected Development on Reported Defaults | $ 64 | |||||||||
Cumulative Number of Reported Defaults | loan | 327 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 10,620 | 10,536 | 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, | 17,249 | 17,402 | 19,536 | 23,168 | 36,438 | |||||
Total of IBNR plus Expected Development on Reported Defaults | $ 188 | |||||||||
Cumulative Number of Reported Defaults | loan | 492 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 14,536 | 13,927 | 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, | 24,223 | 23,649 | 39,085 | 50,562 | ||||||
Total of IBNR plus Expected Development on Reported Defaults | $ 823 | |||||||||
Cumulative Number of Reported Defaults | loan | 693 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 12,392 | 10,717 | 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, | 53,045 | 269,410 | 317,516 | |||||||
Total of IBNR plus Expected Development on Reported Defaults | $ 3,550 | |||||||||
Cumulative Number of Reported Defaults | loan | 1,156 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 4,022 | 2,499 | $ 1,018 | |||||||
2021 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Loss and Allocated LAE, For the Years Ended December 31, | 38,551 | 97,256 | ||||||||
Total of IBNR plus Expected Development on Reported Defaults | $ 2,866 | |||||||||
Cumulative Number of Reported Defaults | loan | 1,349 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 856 | $ 388 | ||||||||
2022 | Property Insurance Product Line | ||||||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||||||
Incurred Loss and Allocated LAE, For the Years Ended December 31, | 99,372 | |||||||||
Total of IBNR plus Expected Development on Reported Defaults | $ 7,430 | |||||||||
Cumulative Number of Reported Defaults | loan | 10,768 | |||||||||
Cumulative Paid Losses and Allocated LAE For the Years Ended December 31, | $ 224 |
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, 2022 |
Average Annual Percentage Payout of Incurred Losses and Allocated LAE by Year | |
Year 1 | 5% |
Year 2 | 31% |
Year 3 | 25% |
Year 4 | 9% |
Year 5 | 4% |
Year 6 | 2% |
Year 7 | 1% |
Year 8 | 0% |
Year 9 | 0% |
Year 10 | 0% |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) | Dec. 31, 2022 | Dec. 10, 2021 | Oct. 14, 2020 | Dec. 31, 2021 |
Credit Facility [Line Items] | ||||
Credit facility expiration period | 5 years | 3 years | ||
Committed capacity | $ 825,000,000 | |||
Amount outstanding, gross | 425,000,000 | $ 425,000,000 | ||
Weighted average interest rate during period | 6.02% | 1.79% | ||
Existing term loans | ||||
Credit Facility [Line Items] | ||||
Repayment | 225,000,000 | |||
Term Loan | Essent Holdings | ||||
Credit Facility [Line Items] | ||||
Repayment | 100,000,000 | |||
Revolving Credit Facility | ||||
Credit Facility [Line Items] | ||||
Credit facility, maximum borrowing capacity | 400,000,000 | $ 300,000,000 | ||
Line of credit facility, accordion feature | $ 175,000,000 | |||
Credit facility, commitment fee rate | 0.25% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | |||
Renewal term (up to) | 10 years | ||
Operating lease right-of-use asset | $ 13,100 | $ 6,400 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other accrued liabilities | Other accrued liabilities | |
Operating lease liabilities | $ 14,951 | $ 8,000 | |
Lease cost | 3,770 | 2,566 | $ 2,420 |
Minimum sublease rental income, due in 2023 | 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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease cost: | |||
Operating lease cost | $ 3,908 | $ 2,699 | $ 2,532 |
Short-term lease cost | 0 | 2 | 19 |
Sublease income | (138) | (135) | (131) |
Total lease cost | $ 3,770 | $ 2,566 | $ 2,420 |
Other information: | |||
Weighted average remaining lease term - operating leases | 6 years 10 months 24 days | 2 years 9 months 18 days | 3 years 9 months 18 days |
Weighted average discount rate - operating leases | 3.60% | 4% | 3.90% |
Commitments and Contingencies-
Commitments and Contingencies- Schedule of Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 4,302 | |
2024 | 2,603 | |
2025 | 2,064 | |
2026 | 1,277 | |
2027 | 1,258 | |
2028 and thereafter | 5,327 | |
Total lease payments to be paid | 16,831 | |
Less: Future interest expense | (1,880) | |
Present value of lease liabilities | $ 14,951 | $ 8,000 |
Capital Stock - Narrative (Deta
Capital Stock - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 37 Months Ended | ||||||||||||||||||
Mar. 20, 2023 $ / shares | Feb. 28, 2023 $ / shares | Jun. 30, 2020 USD ($) $ / shares shares | Sep. 30, 2019 $ / shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Sep. 30, 2022 $ / shares | Jun. 30, 2022 $ / shares | Mar. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares shares | Sep. 30, 2021 $ / shares | Jun. 30, 2021 $ / shares | Mar. 31, 2021 $ / shares | Dec. 31, 2020 $ / shares | Sep. 30, 2020 $ / shares | Jun. 30, 2020 $ / shares shares | Mar. 31, 2020 $ / shares | Sep. 30, 2019 $ / shares | Dec. 31, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares | May 31, 2021 USD ($) shares | May 31, 2022 USD ($) | |
Dividends Payable [Line Items] | ||||||||||||||||||||||
Authorized share capital (in shares) | shares | 233,333,000 | 233,333,000 | 233,333,000 | 233,333,000 | ||||||||||||||||||
Number of votes per share | vote | 1 | 1 | ||||||||||||||||||||
Shareholder ownership threshold for voting rights | 9.50% | |||||||||||||||||||||
Maximum number of votes per share for certain shareholders under 9.5% shareholder provision | vote | 1 | 1 | ||||||||||||||||||||
Minimum number of votes per share for other shareholders under 9.5% shareholder provision | vote | 1 | 1 | ||||||||||||||||||||
Common shares, issued (in shares) | shares | 13,800,000 | 107,683,000 | 109,377,000 | 13,800,000 | 107,683,000 | 109,377,000 | ||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 33.25 | $ 33.25 | ||||||||||||||||||||
Net proceeds from sale of stock | $ 440,000,000 | $ 0 | $ 0 | $ 439,962,000 | ||||||||||||||||||
Quarterly cash dividends declared (in dollars per share) | $ / shares | $ 0.23 | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | 0.16 | $ 0.16 | $ 0.15 | $ 0.86 | $ 0.70 | $ 0.64 | ||||||
Quarterly cash dividends paid (in dollars per share) | $ / shares | $ 0.15 | $ 0.23 | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.86 | $ 0.70 | $ 0.64 | ||||||
Share Repurchase Plan 2021 | ||||||||||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||||||||||
Share repurchase approved amount | $ 250,000,000 | |||||||||||||||||||||
Stock repurchased (in shares) | shares | 2,136,961 | 3,469,560 | ||||||||||||||||||||
Shares acquired and cancelled | $ 92,200,000 | $ 157,800,000 | ||||||||||||||||||||
Remaining authorized repurchase amount | $ 92,200,000 | |||||||||||||||||||||
Share Repurchase Plan 2022 | ||||||||||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||||||||||
Share repurchase approved amount | $ 250,000,000 | |||||||||||||||||||||
Stock repurchased (in shares) | shares | 0 | |||||||||||||||||||||
Remaining authorized repurchase amount | $ 250,000,000 | $ 250,000,000 | ||||||||||||||||||||
Forecast | ||||||||||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||||||||||
Quarterly cash dividends declared (in dollars per share) | $ / shares | $ 0.25 | |||||||||||||||||||||
Quarterly cash dividends paid (in dollars per share) | $ / shares | $ 0.25 |
Capital Stock - Dividends (Deta
Capital Stock - Dividends (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2019 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||||||||||||||||
Quarterly cash dividends paid (in dollars per share) | $ 0.15 | $ 0.23 | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.86 | $ 0.70 | $ 0.64 | |
Quarterly cash dividends declared (in dollars per share) | $ 0.23 | $ 0.22 | $ 0.21 | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.17 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.16 | $ 0.15 | $ 0.86 | $ 0.70 | $ 0.64 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||||||||||||||
Feb. 28, 2023 | Jan. 31, 2023 | May 31, 2022 | Feb. 28, 2022 | May 31, 2021 | Feb. 28, 2021 | May 31, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | May 31, 2019 | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Jan. 31, 2017 | Feb. 29, 2016 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2013 | |
Stock-based compensation | |||||||||||||||||||
Shares tendered by employees to pay employee withholding taxes (in shares) | 133,011 | 135,616 | 141,801 | ||||||||||||||||
Nonvested Share Units | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Granted (in shares) | 161,000 | 212,000 | 350,000 | ||||||||||||||||
Nonvested shares, share units or DEU | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Total fair value of shares vested | $ 18.4 | $ 19.5 | $ 18.5 | ||||||||||||||||
Nonvested shares or share units outstanding | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Total unrecognized compensation expense | $ 15.7 | ||||||||||||||||||
Expected weighted average period for recognition of expense | 2 years 2 months 12 days | ||||||||||||||||||
Certain Senior Management | Performance-based share awards | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Share-based payment arrangement, plan modification, incremental cost | $ 4 | ||||||||||||||||||
Total unrecognized compensation expense | $ 0.4 | ||||||||||||||||||
Expected weighted average period for recognition of expense | 2 months 12 days | ||||||||||||||||||
Time-Based Share Awards | Nonvested Shares | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Granted (in shares) | 87,000 | 93,000 | 69,000 | ||||||||||||||||
Time-Based Share Awards | Nonvested Shares | Subsequent Event | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Granted (in shares) | 301,495 | ||||||||||||||||||
Time-Based Share Awards | Employee | Nonvested Share Units | Incentive Program Bonus Award Fiscal Year Performance | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting period | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | |||||||||||
Time-Based Share Awards | Employee | Nonvested Share Units | Incentive Program Bonus Award Fiscal Year Performance | First Vesting Date | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||||||
Time-Based Share Awards | Employee | Nonvested Share Units | Incentive Program Bonus Award Fiscal Year Performance | Second Vesting Date | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||||||
Time-Based Share Awards | Employee | Nonvested Share Units | Incentive Program Bonus Award Fiscal Year Performance | Third Vesting Date | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||||||
Time-Based Share Awards | Director | Nonvested Share Units | Maximum | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting period | 1 year | 1 year | 1 year | 1 year | |||||||||||||||
Time-Based Share Awards | Certain Employees | Nonvested Shares | Subsequent Event | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Granted (in shares) | 75,581 | ||||||||||||||||||
Compounded Annual Book Value Per Share Growth 16% | Nonvested Shares | Performance Based Grants 2015, 2016, 2017 & 2018 | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 100% | ||||||||||||||||||
Time and Performance- Based Share Awards | Nonvested Shares | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Granted (in shares) | 308,000 | 281,000 | 109,000 | ||||||||||||||||
Time and Performance- Based Share Awards | Certain Senior Management | Nonvested Shares | Subsequent Event | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Granted (in shares) | 394,319 | ||||||||||||||||||
2013 Plan | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Shares authorized (in shares) | 7,500,000 | ||||||||||||||||||
Number of share available for future grant (in shares) | 2,800,000 | ||||||||||||||||||
2013 Plan | Time-Based Share Awards | Certain Senior Management | Nonvested Shares | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Performance period | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | |||||||||||||
2013 Plan | Time-Based Share Awards | Certain Senior Management | Nonvested Shares | First Vesting Date | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||||||
2013 Plan | Time-Based Share Awards | Certain Senior Management | Nonvested Shares | Second Vesting Date | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||||||
2013 Plan | Time-Based Share Awards | Certain Senior Management | Nonvested Shares | Third Vesting Date | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percentage | 33.33% | ||||||||||||||||||
2013 Plan | Vesting Based On Performance | Certain Senior Management | Nonvested Shares | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Performance period | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | |||||||||||||
2013 Plan | Vesting Based On Performance | Certain Senior Management | Nonvested Shares | Maximum | |||||||||||||||||||
Stock-based compensation | |||||||||||||||||||
Vesting percent | 200% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Nonvested Performance-based Share Awards (Details) - Nonvested Shares | 36 Months Ended | |||||
Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
13% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 13% | |||||
13% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 100% | |||||
13% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 150% | |||||
13% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 200% | |||||
14% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 14% | |||||
14% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 100% | |||||
14% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 150% | |||||
14% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 200% | |||||
12% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 12% | |||||
12% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 75% | |||||
12% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 125% | |||||
12% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 175% | |||||
10% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 10% | |||||
10% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 50% | |||||
10% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 100% | |||||
10% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 150% | |||||
8% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 8% | |||||
8% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 25% | |||||
8% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 75% | |||||
8% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 125% | |||||
6% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 6% | |||||
6% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 0% | |||||
6% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 50% | |||||
6% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 100% | |||||
11% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 11% | |||||
11% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 75% | |||||
11% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 125% | |||||
11% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 175% | |||||
9% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 9% | |||||
9% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 50% | |||||
9% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 100% | |||||
9% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 150% | |||||
7% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 7% | |||||
7% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 25% | |||||
7% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 75% | |||||
7% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 125% | |||||
5% | Forecast | ||||||
Stock-based compensation | ||||||
Three-Year Book Value Per Share CAGR | 5% | |||||
5% | ≤25th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 0% | |||||
5% | 50th percentile "Target" | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 50% | |||||
5% | ≥75th percentile | Forecast | ||||||
Stock-based compensation | ||||||
Vesting percentile | 100% | |||||
2020 Performance-Based Grants | 13% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 13% | |||||
Nonvested Common Shares Earned | 10% | |||||
2020 Performance-Based Grants | 14% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 14% | |||||
Nonvested Common Shares Earned | 35% | |||||
2020 Performance-Based Grants | 15% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 15% | |||||
Nonvested Common Shares Earned | 60% | |||||
2020 Performance-Based Grants | 16% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 16% | |||||
Nonvested Common Shares Earned | 85% | |||||
2020 Performance-Based Grants | Maximum | 13% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 13% | |||||
Nonvested Common Shares Earned | 0% | |||||
2020 Performance-Based Grants | Minimum | 17% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 17% | |||||
Nonvested Common Shares Earned | 100% | |||||
2019 Performance-Based Grants | 14% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 14% | |||||
Nonvested Common Shares Earned | 10% | |||||
2019 Performance-Based Grants | 15% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 15% | |||||
Nonvested Common Shares Earned | 35% | |||||
2019 Performance-Based Grants | 16% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 16% | |||||
Nonvested Common Shares Earned | 60% | |||||
2019 Performance-Based Grants | 17% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 17% | |||||
Nonvested Common Shares Earned | 85% | |||||
2019 Performance-Based Grants | Maximum | 14% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 14% | |||||
Nonvested Common Shares Earned | 0% | |||||
2019 Performance-Based Grants | Minimum | 18% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 18% | |||||
Nonvested Common Shares Earned | 100% | |||||
2018 Performance-Based Grants | 15% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 15% | |||||
Nonvested Common Shares Earned | 25% | |||||
2018 Performance-Based Grants | 16% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 16% | |||||
Nonvested Common Shares Earned | 50% | |||||
2018 Performance-Based Grants | 17% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 17% | |||||
Nonvested Common Shares Earned | 75% | |||||
2018 Performance-Based Grants | Maximum | 15% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 15% | |||||
Nonvested Common Shares Earned | 0% | |||||
2018 Performance-Based Grants | Minimum | 18% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 18% | |||||
Nonvested Common Shares Earned | 100% | |||||
2017 Performance-Based Grants | 16% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 16% | |||||
Nonvested Common Shares Earned | 25% | |||||
2017 Performance-Based Grants | 17% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 17% | |||||
Nonvested Common Shares Earned | 50% | |||||
2017 Performance-Based Grants | 18% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 18% | |||||
Nonvested Common Shares Earned | 75% | |||||
2017 Performance-Based Grants | Maximum | 16% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 16% | |||||
Nonvested Common Shares Earned | 0% | |||||
2017 Performance-Based Grants | Minimum | 19% | ||||||
Stock-based compensation | ||||||
Compounded Annual Book Value Per Share Growth | 19% | |||||
Nonvested Common Shares Earned | 100% |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Awards | Time and Performance- Based Share Awards | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 500 | 363 | 394 |
Granted (in shares) | 308 | 281 | 109 |
Vested (in shares) | (139) | (113) | (140) |
Forfeited (in shares) | (22) | (31) | 0 |
Outstanding at end of period (in shares) | 647 | 500 | 363 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 31.29 | $ 47.09 | $ 42.02 |
Granted (in dollars per share) | 14.83 | 15.64 | 51.52 |
Vested (in dollars per share) | 45.32 | 45.02 | 36.29 |
Forfeited (in dollars per share) | 15.45 | 24.33 | |
Outstanding at end of period (in dollars per share) | $ 20.99 | $ 31.29 | $ 47.09 |
Share Awards | Time-Based Share Awards | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 140 | 153 | 169 |
Granted (in shares) | 87 | 93 | 69 |
Vested (in shares) | (86) | (98) | (85) |
Forfeited (in shares) | (3) | (8) | 0 |
Outstanding at end of period (in shares) | 138 | 140 | 153 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 45.31 | $ 46.34 | $ 41.31 |
Granted (in dollars per share) | 46.15 | 43.67 | 51.52 |
Vested (in dollars per share) | 45.07 | 45.40 | 40.47 |
Forfeited (in dollars per share) | 46.91 | 44.94 | |
Outstanding at end of period (in dollars per share) | $ 45.94 | $ 45.31 | $ 46.34 |
Share Units | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 461 | 492 | 351 |
Granted (in shares) | 161 | 212 | 350 |
Vested (in shares) | (192) | (214) | (192) |
Forfeited (in shares) | (80) | (29) | (17) |
Outstanding at end of period (in shares) | 350 | 461 | 492 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 47.94 | $ 46.59 | $ 39.78 |
Granted (in dollars per share) | 42.56 | 46.96 | 48.75 |
Vested (in dollars per share) | 47.53 | 43.74 | 37.76 |
Forfeited (in dollars per share) | 48.73 | 48.85 | 50.04 |
Outstanding at end of period (in dollars per share) | $ 45.51 | $ 47.94 | $ 46.59 |
DEU | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 28 | 21 | 5 |
Granted (in shares) | 25 | 17 | 19 |
Vested (in shares) | (14) | (9) | (3) |
Forfeited (in shares) | (2) | (1) | 0 |
Outstanding at end of period (in shares) | 37 | 28 | 21 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 41.75 | $ 37.66 | $ 51.11 |
Granted (in dollars per share) | 40.28 | 44.86 | 35.42 |
Vested (in dollars per share) | 41.29 | 38.53 | 49.79 |
Forfeited (in dollars per share) | 42.70 | 40.53 | 33.86 |
Outstanding at end of period (in dollars per share) | $ 40.86 | $ 41.75 | $ 37.66 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Compensation Expense, Net of Forfeitures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Compensation expense | $ 18,381 | $ 20,844 | $ 18,462 |
Income tax benefit | $ 3,636 | $ 4,088 | $ 3,511 |
Dividends Restrictions (Details
Dividends Restrictions (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2023 | |
Dividends Restrictions | ||||
Total equity | $ 4,462,309,000 | $ 4,236,114,000 | $ 3,862,633,000 | |
Affiliated Entity | ||||
Dividends Restrictions | ||||
Dividends paid to parent company | 0 | 0 | 55,000,000 | |
Essent Guaranty | Affiliated Entity | ||||
Dividends Restrictions | ||||
Unassigned surplus | 314,700,000 | |||
Dividends paid to parent company | 315,000,000 | 247,200,000 | 0 | |
Essent Guaranty | Affiliated Entity | Subsequent Event | ||||
Dividends Restrictions | ||||
Amount available for dividend distribution | $ 314,700,000 | |||
Essent PA | Affiliated Entity | ||||
Dividends Restrictions | ||||
Unassigned surplus | 13,600,000 | |||
Dividends paid to parent company | 5,000,000 | $ 0 | $ 0 | |
Essent PA | Affiliated Entity | Subsequent Event | ||||
Dividends Restrictions | ||||
Amount available for dividend distribution | $ 5,300,000 | |||
Essent Re | Affiliated Entity | ||||
Dividends Restrictions | ||||
Total equity | 1,500,000,000 | |||
Essent Re | Affiliated Entity | 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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of income tax expense | |||
Current | $ 98,666 | $ 56,509 | $ 38,402 |
Deferred | 58,168 | 84,022 | 38,653 |
Total income tax expense | 156,834 | 140,531 | 77,055 |
Effective Income Tax Rate Reconciliation, Amount | |||
Tax provision at weighted average statutory rates | 148,176 | 127,046 | 75,763 |
State taxes, net of federal benefit | 6,306 | 11,295 | 0 |
Non-deductible expenses | 4,041 | 3,652 | 2,482 |
Tax exempt interest, net of proration | (1,463) | (1,606) | (1,462) |
Excess tax (benefit) deficit from stock-based compensation | 75 | 61 | (599) |
Other | (301) | 83 | 871 |
Total income tax expense | $ 156,834 | $ 140,531 | $ 77,055 |
% of pretax income | |||
Tax provision at weighted average statutory rates | 15% | 15.50% | 15.50% |
State taxes, net of federal benefit | 0.60% | 1.40% | 0% |
Non-deductible expenses | 0.40% | 0.40% | 0.50% |
Tax exempt interest, net of proration | (0.10%) | (0.20%) | (0.30%) |
Excess tax (benefit) deficit from stock-based compensation | 0% | 0% | (0.10%) |
Other | 0% | 0% | 0.10% |
Total income tax expense | 15.90% | 17.10% | 15.70% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Net purchases of T&L Bonds | $ 57,650,000 | $ 58,174,000 | $ 40,751,000 |
Prepaid federal income tax | 418,460,000 | 360,810,000 | |
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. | 3,400,000,000 | ||
Essent Holdings | Essent Irish Intermediate | |||
Operating Loss Carryforwards [Line Items] | |||
Withholding taxes accrued with respect to un-remitted earnings | 0 | ||
Bermuda | Bermuda | |||
Operating Loss Carryforwards [Line Items] | |||
Income before income taxes | 282,500,000 | 217,300,000 | 129,300,000 |
U.S. | US | |||
Operating Loss Carryforwards [Line Items] | |||
Income before income taxes | 705,600,000 | $ 605,000,000 | $ 360,800,000 |
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. | $ 169,700,000 | ||
United States Ireland Tax Treaty Benefits Availed | Essent Holdings | Essent Irish Intermediate | |||
Operating Loss Carryforwards [Line Items] | |||
Withholding tax rate on dividends paid | 5% | ||
Absent Benefits Of United States Ireland Tax Treaty | Essent Holdings | Essent Irish Intermediate | |||
Operating Loss Carryforwards [Line Items] | |||
Withholding tax rate on dividends paid | 30% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Net deferred tax asset | ||
Deferred tax assets | $ 91,729 | $ 29,100 |
Deferred tax liabilities | (448,539) | (402,754) |
Net deferred tax liability | (356,810) | (373,654) |
Components of the net deferred tax asset | ||
Contingency reserves | (432,265) | (372,336) |
Unrealized (gain) loss on investments | 60,439 | |
Unrealized (gain) loss on investments | (14,573) | |
Unearned premium reserve | 14,099 | 12,539 |
Investments in limited partnerships | (13,907) | (13,002) |
Accrued expenses | 6,257 | 6,076 |
Unearned ceding commissions | 2,363 | 2,474 |
Change in fair market value of derivatives | 2,377 | 1,827 |
Deferred policy acquisition costs | (2,152) | (2,642) |
Nonvested shares | 1,640 | 1,841 |
Start-up expenditures, net | 1,233 | 880 |
Fixed assets | 1,197 | 836 |
Impairments on available-for-sale investment securities | 1,155 | 0 |
Loss reserves | 965 | 2,622 |
Prepaid expenses | (156) | (123) |
Loss reserves - TCJA transition adjustment | (59) | (78) |
Organizational expenditures | 4 | 5 |
Net deferred tax liability | $ (356,810) | $ (373,654) |
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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net income | $ 831,353 | $ 681,783 | $ 413,041 |
Basic weighted average shares outstanding (in shares) | 107,205 | 111,164 | 106,098 |
Dilutive effect of nonvested shares (in shares) | 448 | 391 | 278 |
Diluted weighted average shares outstanding (in shares) | 107,653 | 111,555 | 106,376 |
Basic earnings per share (in dollars per share) | $ 7.75 | $ 6.13 | $ 3.89 |
Diluted earnings per share (in dollars per share) | $ 7.72 | $ 6.11 | $ 3.88 |
Earnings per Share (EPS) - Narr
Earnings per Share (EPS) - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contingently issuable awards | |||
Antidilutive nonvested shares (in shares) | 77,759 | 186,020 | 324,813 |
2022 Performance-Based Grants | |||
Contingently issuable awards | |||
Vesting percentile | 131% | ||
Percentage of award issuable if current period end were end of contingency period | 66% | ||
2021 Performance based share awards | |||
Contingently issuable awards | |||
Vesting percentile | 100% | 100% | |
Percentage of award issuable if current period end were end of contingency period | 50% | 50% |
Earnings per Share (EPS) - Sche
Earnings per Share (EPS) - Schedule of Percent of Shares Issuable Under Terms of Agreement (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
2022 Performance-Based Grants | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Vesting percentile | 131% | ||
Percentage of award issuable if current period end were end of contingency period | 66% | ||
2021 Performance based share awards | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Vesting percentile | 100% | 100% | |
Percentage of award issuable if current period end were end of contingency period | 50% | 50% | |
2020 Performance-Based Grants | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Vesting percentile | 100% | 100% | 25% |
2019 Performance-Based Grants | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Vesting percentile | 100% | 100% | |
2018 Performance-Based Grants | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Vesting percentile | 100% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other comprehensive income (loss): | |||
Other comprehensive (losses) gain, before tax | $ (508,510) | $ (103,044) | |
Other comprehensive income (loss): | |||
Other comprehensive (losses) gain, tax effect | 75,013 | 15,477 | |
Net of Tax | |||
Stockholders equity, beginning of year | 4,236,114 | 3,862,633 | |
Other comprehensive income (loss): | |||
Total other comprehensive (loss) income | (433,497) | (87,567) | $ 82,087 |
Stockholders equity, end of year | 4,462,309 | 4,236,114 | 3,862,633 |
Income from other invested assets | 28,676 | 56,386 | (215) |
Accumulated Other Comprehensive Income (Loss) | |||
Before Tax | |||
AOCI before tax, beginning of year | 65,280 | 168,324 | |
Other comprehensive income (loss): | |||
AOCI before tax, end of year | (443,230) | 65,280 | 168,324 |
Tax Effect | |||
AOCI tax effect, beginning of year | (14,573) | (30,050) | |
Other comprehensive income (loss): | |||
AOCI tax effect, end of year | 60,440 | (14,573) | (30,050) |
Net of Tax | |||
Stockholders equity, beginning of year | 50,707 | 138,274 | 56,187 |
Other comprehensive income (loss): | |||
Total other comprehensive (loss) income | (433,497) | (87,567) | 82,087 |
Stockholders equity, end of year | (382,790) | 50,707 | $ 138,274 |
Accumulated Net Investment Gains (Losses) On Investments | |||
Other comprehensive income (loss): | |||
Unrealized holding (losses) gains arising during the year, before tax | (521,682) | (94,986) | |
Less: Reclassification adjustment for gains included in net income, before tax | 13,172 | (8,058) | |
Other comprehensive (losses) gain, before tax | (508,510) | (103,044) | |
Other comprehensive income (loss): | |||
Unrealized holding (losses) gains arising during the year, tax effect | 75,118 | 13,858 | |
Less: Reclassification adjustment for gains included in net income, tax effect | (105) | 1,619 | |
Other comprehensive (losses) gain, tax effect | 75,013 | 15,477 | |
Other comprehensive income (loss): | |||
Unrealized holding (losses) gains arising during the year, net of tax | (446,564) | (81,128) | |
Less: Reclassification adjustment for gains included in net income, net of tax | 13,067 | (6,439) | |
Total other comprehensive (loss) income | $ (433,497) | (87,567) | |
Accumulated Net Investment Gains (Losses) On Investments | Other Invested Assets | |||
Other comprehensive income (loss): | |||
Income from other invested assets | $ 7,600 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial Assets: | ||
Fair Value | $ 4,741,625 | $ 4,962,887 |
Recurring | ||
Financial Assets: | ||
Total assets at fair value | 4,741,625 | 4,962,887 |
Recurring | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 556,438 | 448,793 |
Recurring | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 49,058 | 5,504 |
Recurring | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 783,743 | 1,008,863 |
Recurring | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 602,690 | 627,599 |
Recurring | Non-U.S. government securities | ||
Financial Assets: | ||
Fair Value | 62,399 | 79,743 |
Recurring | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 1,414,321 | 1,455,247 |
Recurring | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 511,824 | 545,423 |
Recurring | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 624,561 | 581,703 |
Recurring | Money market funds | ||
Financial Assets: | ||
Fair Value | 136,591 | 210,012 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | ||
Financial Assets: | ||
Total assets at fair value | 693,029 | 658,805 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 556,438 | 448,793 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Non-U.S. government securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Money market funds | ||
Financial Assets: | ||
Fair Value | 136,591 | 210,012 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Total assets at fair value | 4,048,596 | 4,304,082 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 49,058 | 5,504 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 783,743 | 1,008,863 |
Recurring | Significant Other Observable Inputs (Level 2) | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 602,690 | 627,599 |
Recurring | Significant Other Observable Inputs (Level 2) | Non-U.S. government securities | ||
Financial Assets: | ||
Fair Value | 62,399 | 79,743 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 1,414,321 | 1,455,247 |
Recurring | Significant Other Observable Inputs (Level 2) | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 511,824 | 545,423 |
Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 624,561 | 581,703 |
Recurring | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Total assets at fair value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. agency securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Municipal debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Non-U.S. government securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Asset-backed securities | ||
Financial Assets: | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Money market funds | ||
Financial Assets: | ||
Fair Value | $ 0 | $ 0 |
Statutory Accounting - Schedule
Statutory Accounting - Schedule of Statutory Net Income, Statutory Surplus and Contingency Reserve Liability (Details) - Affiliated Entity - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Essent Guaranty | |||
Dividends Restrictions | |||
Statutory net income | $ 590,505 | $ 497,652 | $ 312,091 |
Statutory surplus | 1,020,034 | 1,043,866 | 1,048,878 |
Contingency reserve liability | 2,048,740 | 1,792,671 | 1,499,782 |
Essent PA | |||
Dividends Restrictions | |||
Statutory net income | 859 | 3,176 | 4,560 |
Statutory surplus | 52,609 | 56,136 | 54,354 |
Contingency reserve liability | $ 56,744 | $ 57,384 | $ 56,032 |
Statutory Accounting - Narrativ
Statutory Accounting - Narrative (Details) - Affiliated Entity - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Essent Guaranty | |||
Dividends Restrictions | |||
Increase in contingency reserve | $ 256,100 | ||
Released contingency reserves | 19,400 | $ 3,800 | |
Statutory net income | 590,505 | 497,652 | $ 312,091 |
Essent PA | |||
Dividends Restrictions | |||
Increase in contingency reserve | (600) | ||
Released contingency reserves | 1,500 | 300 | |
Statutory net income | 859 | 3,176 | $ 4,560 |
Essent Re | |||
Dividends Restrictions | |||
Statutory capital and surplus | 1,500,000 | 1,300,000 | |
Statutory net income | $ 315,000 | $ 228,900 |
Capital Maintenance Agreement (
Capital Maintenance Agreement (Details) | Dec. 31, 2022 USD ($) |
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 | 0.6 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments-Other Than Investments in Related Parties (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | $ 5,442,797 |
Fair Value | 4,999,566 |
Amount at which shown in the Balance Sheet | 4,999,566 |
Fixed maturities | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 4,932,574 |
Fair Value | 4,489,598 |
Amount at which shown in the Balance Sheet | 4,489,598 |
Fixed maturities | United States Government and government agencies and authorities | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 1,416,257 |
Fair Value | 1,273,844 |
Amount at which shown in the Balance Sheet | 1,273,844 |
Fixed maturities | States, municipalities and political subdivisions | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 661,934 |
Fair Value | 602,690 |
Amount at which shown in the Balance Sheet | 602,690 |
Fixed maturities | Residential and commercial mortgage securities | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 577,915 |
Fair Value | 511,824 |
Amount at which shown in the Balance Sheet | 511,824 |
Fixed maturities | Asset-backed securities | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 660,345 |
Fair Value | 624,561 |
Amount at which shown in the Balance Sheet | 624,561 |
Fixed maturities | Foreign government and agency securities | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 69,651 |
Fair Value | 62,399 |
Amount at which shown in the Balance Sheet | 62,399 |
Fixed maturities | All other corporate bonds | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 1,546,472 |
Fair Value | 1,414,280 |
Amount at which shown in the Balance Sheet | 1,414,280 |
Short-term investments | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 252,282 |
Fair Value | 252,027 |
Amount at which shown in the Balance Sheet | 252,027 |
Other invested assets | |
Investments-Other Than Investments in Related Parties | |
Amortized Cost | 257,941 |
Fair Value | 257,941 |
Amount at which shown in the Balance Sheet | $ 257,941 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | |||
Total investments available for sale | $ 4,741,625 | $ 4,962,887 | |
Other invested assets | 257,941 | 170,472 | |
Cash | 81,240 | 81,491 | |
Other assets | 104,489 | 49,712 | |
Total assets | 5,723,797 | 5,722,174 | |
Liabilities | |||
Credit facility borrowings (at carrying value, less unamortized deferred costs of $4,136 in 2022 and $5,177 in 2021) | 420,864 | 419,823 | |
Other accrued liabilities | 104,463 | 99,753 | |
Total liabilities | 1,261,488 | 1,486,060 | |
Commitments and contingencies | |||
Stockholders' Equity | |||
Common shares | 1,615 | 1,641 | |
Additional paid-in capital | 1,350,377 | 1,428,952 | |
Accumulated other comprehensive (loss) income | (382,790) | 50,707 | |
Retained earnings | 3,493,107 | 2,754,814 | |
Total stockholders' equity | 4,462,309 | 4,236,114 | $ 3,862,633 |
Total liabilities and stockholders' equity | 5,723,797 | 5,722,174 | |
Amortized cost | 5,184,856 | 4,897,607 | |
Unamortized deferred costs | 4,136 | 5,177 | |
Fixed maturities | |||
Assets | |||
Total investments available for sale | 4,489,598 | 4,649,800 | |
Stockholders' Equity | |||
Amortized cost | 4,932,574 | 4,584,521 | |
Short-term investments | |||
Assets | |||
Total investments available for sale | 252,027 | 313,087 | |
Stockholders' Equity | |||
Amortized cost | 252,282 | 313,086 | |
Parent Company | |||
Assets | |||
Total investments available for sale | 294,340 | 519,203 | |
Other invested assets | 2,166 | 0 | |
Cash | 6,160 | 10,073 | |
Due from affiliates | 840 | 837 | |
Investment in consolidated subsidiaries | 4,577,128 | 4,123,426 | |
Other assets | 5,834 | 7,537 | |
Total assets | 4,886,468 | 4,661,076 | |
Liabilities | |||
Due to affiliates | 752 | 940 | |
Credit facility borrowings (at carrying value, less unamortized deferred costs of $4,136 in 2022 and $5,177 in 2021) | 420,864 | 419,823 | |
Other accrued liabilities | 2,543 | 4,199 | |
Total liabilities | 424,159 | 424,962 | |
Commitments and contingencies | |||
Stockholders' Equity | |||
Common shares | 1,615 | 1,641 | |
Additional paid-in capital | 1,350,377 | 1,428,952 | |
Accumulated other comprehensive (loss) income | (382,790) | 50,707 | |
Retained earnings | 3,493,107 | 2,754,814 | |
Total stockholders' equity | 4,462,309 | 4,236,114 | |
Total liabilities and stockholders' equity | 4,886,468 | 4,661,076 | |
Unamortized deferred costs | 4,136 | 5,177 | |
Parent Company | Fixed maturities | |||
Assets | |||
Total investments available for sale | 226,718 | 356,592 | |
Stockholders' Equity | |||
Amortized cost | 249,284 | 355,700 | |
Parent Company | Short-term investments | |||
Assets | |||
Total investments available for sale | 67,622 | 162,611 | |
Stockholders' Equity | |||
Amortized cost | $ 67,783 | $ 162,610 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Net investment income | $ 124,409 | $ 88,765 | $ 80,087 |
Realized investment losses, net | (13,172) | 418 | 2,697 |
Total revenues | 1,000,824 | 1,028,510 | 955,154 |
Expenses: | |||
Interest expense | 15,608 | 8,282 | 9,074 |
Net income | 831,353 | 681,783 | 413,041 |
Other comprehensive income (loss): | |||
Change in unrealized (depreciation) appreciation of investments, net of tax (benefit) expense of $(75,013) in 2022, $(15,477) in 2021 and $16,836 in 2020 | (433,497) | (87,567) | 82,087 |
Total other comprehensive (loss) income | (433,497) | (87,567) | 82,087 |
Comprehensive income | 397,856 | 594,216 | 495,128 |
Change in unrealized appreciation (depreciation) of investments, tax (benefit) expense | (75,013) | (15,477) | 16,836 |
Parent Company | |||
Revenues: | |||
Net investment income | 6,433 | 5,378 | 1,181 |
Realized investment losses, net | (12,170) | (108) | (10) |
Administrative service fees from subsidiaries | 642 | 682 | 872 |
Total revenues | (5,095) | 5,952 | 2,043 |
Expenses: | |||
Administrative service fees to subsidiaries | 3,908 | 4,338 | 3,728 |
Other operating expenses | 7,614 | 7,193 | 5,929 |
Interest expense | 15,609 | 5,889 | 6,446 |
Total expenses | 27,131 | 17,420 | 16,103 |
Income before income taxes | (32,226) | (11,468) | (14,060) |
Loss before equity in undistributed net income of subsidiaries | (32,226) | (11,468) | (14,060) |
Equity in undistributed net income of subsidiaries | 863,579 | 693,251 | 427,101 |
Net income | 831,353 | 681,783 | 413,041 |
Other comprehensive income (loss): | |||
Change in unrealized (depreciation) appreciation of investments, net of tax (benefit) expense of $(75,013) in 2022, $(15,477) in 2021 and $16,836 in 2020 | (433,497) | (87,567) | 82,087 |
Total other comprehensive (loss) income | (433,497) | (87,567) | 82,087 |
Comprehensive income | 397,856 | 594,216 | 495,128 |
Change in unrealized appreciation (depreciation) of investments, tax (benefit) expense | $ (75,013) | $ (15,477) | $ 16,836 |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | ||||
Net income | $ 831,353 | $ 681,783 | $ 413,041 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Loss on the sale of investments, net | 13,172 | (418) | (2,697) | |
Stock-based compensation expense | 18,381 | 20,844 | 18,462 | |
Amortization of premium on investment securities | 18,347 | 33,739 | 23,393 | |
Changes in assets and liabilities: | ||||
Other assets | (50,333) | (3,948) | (16,840) | |
Other accrued liabilities | (2,036) | 9,666 | 24,283 | |
Net cash provided by operating activities | 588,817 | 709,256 | 727,931 | |
Investing Activities | ||||
Net change in short-term investments | 61,060 | 413,773 | (411,498) | |
Investments in subsidiaries | (74,620) | (67,397) | (17,012) | |
Purchase of investments available for sale | (1,378,231) | (2,270,701) | (1,575,082) | |
Proceeds from maturities and paydowns of investments available for sale | 247,296 | 266,930 | 262,321 | |
Proceeds from sales of investments available for sale | 747,883 | 1,067,882 | 577,409 | |
Net cash used in investing activities | (398,872) | (583,167) | (1,154,417) | |
Financing Activities | ||||
Issuance of common shares, net of costs | $ 440,000 | 0 | 0 | 439,962 |
Credit facility borrowings | 0 | 225,000 | 200,000 | |
Credit facility repayments | 0 | (125,000) | (100,000) | |
Treasury stock acquired | (97,914) | (163,855) | (6,354) | |
Payment of issuance costs for credit facility | (154) | (5,849) | (6,232) | |
Dividends paid | (92,128) | (77,724) | (69,410) | |
Net cash (used in) provided by financing activities | (190,196) | (147,428) | 457,966 | |
Net (decrease) increase in cash | (251) | (21,339) | 31,480 | |
Supplemental Disclosure of Cash Flow Information | ||||
Interest payments | (13,595) | (6,951) | (8,263) | |
Noncash Transactions | ||||
Repayment of borrowings with term loan proceeds | 0 | (225,000) | (325,000) | |
Parent Company | ||||
Operating Activities | ||||
Net income | 831,353 | 681,783 | 413,041 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in net income of subsidiaries | (863,579) | (693,251) | (427,101) | |
Loss on the sale of investments, net | 12,170 | 108 | 10 | |
Stock-based compensation expense | 927 | 917 | 935 | |
Amortization of premium on investment securities | 800 | 1,438 | 435 | |
Changes in assets and liabilities: | ||||
Other assets | 1,775 | 312 | (319) | |
Other accrued liabilities | 19,232 | 21,447 | 18,208 | |
Net cash provided by operating activities | 2,678 | 12,754 | 5,209 | |
Investing Activities | ||||
Net change in short-term investments | 94,988 | 189,804 | (255,884) | |
Investments in subsidiaries | 0 | 0 | 0 | |
Purchase of investments available for sale | (157,468) | (273,747) | (205,668) | |
Proceeds from maturities and paydowns of investments available for sale | 81,351 | 18,384 | 838 | |
Proceeds from sales of investments available for sale | 164,733 | 101,618 | 3,386 | |
Net cash used in investing activities | 183,604 | 36,059 | (457,328) | |
Financing Activities | ||||
Issuance of common shares, net of costs | 0 | 0 | 439,962 | |
Credit facility borrowings | 0 | 200,000 | 200,000 | |
Credit facility repayments | 0 | 0 | (100,000) | |
Treasury stock acquired | (97,914) | (163,855) | (6,354) | |
Payment of issuance costs for credit facility | (154) | (5,849) | (5,236) | |
Dividends paid | (92,128) | (77,724) | (69,410) | |
Net cash (used in) provided by financing activities | (190,196) | (47,428) | 458,962 | |
Net (decrease) increase in cash | (3,914) | 1,385 | 6,843 | |
Cash at beginning of year | 10,073 | 8,688 | 1,845 | |
Cash at end of year | 6,159 | 10,073 | 8,688 | |
Supplemental Disclosure of Cash Flow Information | ||||
Interest payments | (13,595) | (4,792) | (5,714) | |
Noncash Transactions | ||||
Repayment of borrowings with term loan proceeds | $ 0 | $ (225,000) | $ (225,000) |
Schedule II - Condensed Finan_5
Schedule II - Condensed Financial Information of Registrant - Supplementary Notes (Details) - Affiliated Entity - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Financial Information of Registrant | |||
Dividends paid to parent company | $ 0 | $ 0 | $ 55,000,000 |
Essent Guaranty | |||
Condensed Financial Information of Registrant | |||
Unassigned surplus | 314,700,000 | ||
Dividends paid to parent company | 315,000,000 | 247,200,000 | 0 |
Essent PA | |||
Condensed Financial Information of Registrant | |||
Unassigned surplus | 13,600,000 | ||
Dividends paid to parent company | $ 5,000,000 | $ 0 | $ 0 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |||
Gross Amount | $ 950,200 | $ 983,457 | $ 951,302 |
Ceded to Other Companies | (107,673) | (110,914) | (88,738) |
Assumed from Other Companies | 0 | 0 | 0 |
Net premiums earned | $ 842,527 | $ 872,543 | $ 862,564 |
Assumed Premiums as a Percentage of Net Premiums | 0% | 0% | 0% |