Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 09, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36174 | ||
Entity Registrant Name | NMI Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-4914248 | ||
Entity Address, Address Line One | 2100 Powell Street | ||
Entity Address, City or Town | Emeryville | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94608 | ||
City Area Code | 855 | ||
Local Phone Number | 530-6642 | ||
Title of 12(b) Security | Class A Common Stock, $.01 par value per share | ||
Trading Symbol | NMIH | ||
Security Exchange Name | NASDAQ | ||
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 | ||
Document Financial Statement Error Correction Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,710,584,967 | ||
Entity Common Stock, Shares Outstanding | 80,879,843 | ||
Documents Incorporated by Reference | Portions of the registrant's Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2023. | ||
Entity Central Index Key | 0001547903 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | BDO USA, P.C. |
Auditor Location | San Francisco, CA |
Auditor Firm ID | 243 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,542,862 and $2,352,747 as of December 31, 2023 and December 31, 2022, respectively) | $ 2,371,021 | $ 2,099,389 |
Cash and cash equivalents (including restricted cash of $1,338 and $2,176 as of December 31, 2023 and December 31, 2022, respectively) | 96,689 | 44,426 |
Premiums receivable | 76,456 | 69,680 |
Accrued investment income | 19,785 | 14,144 |
Deferred policy acquisition costs, net | 62,905 | 58,564 |
Software and equipment, net | 30,252 | 31,930 |
Intangible assets and goodwill | 3,634 | 3,634 |
Reinsurance recoverable | 27,514 | 21,587 |
Prepaid federal income taxes | 235,286 | 154,409 |
Other assets | 16,965 | 18,267 |
Total assets | 2,940,507 | 2,516,030 |
Liabilities | ||
Debt | 397,595 | 396,051 |
Unearned premiums | 92,295 | 123,035 |
Accounts payable and accrued expenses | 86,189 | 74,576 |
Reserve for insurance claims and claim expenses | 123,974 | 99,836 |
Reinsurance funds withheld | 1,421 | 2,674 |
Deferred tax liability, net | 301,573 | 193,859 |
Other liabilities | 11,456 | 12,272 |
Total liabilities | 1,014,503 | 902,303 |
Commitments and contingencies (see Note 14) | ||
Shareholders' equity | ||
Common stock - class A shares, $0.01 par value; 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 and 86,472,742 shares issued and 83,549,879 shares outstanding as of December 31, 2022 (250,000,000 shares authorized) | 873 | 865 |
Additional paid-in capital | 990,816 | 972,717 |
Treasury stock, at cost: 6,452,858 and 2,922,863 common shares as of December 31, 2023 and December 31, 2022, respectively | (148,921) | (56,575) |
Accumulated other comprehensive loss, net of tax | (139,917) | (204,323) |
Retained earnings | 1,223,153 | 901,043 |
Total shareholders' equity | 1,926,004 | 1,613,727 |
Total liabilities and shareholders' equity | $ 2,940,507 | $ 2,516,030 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Amortized Cost | $ 2,542,862 | $ 2,352,747 |
Restricted cash | $ 1,338 | $ 2,176 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued (in shares) | 87,334,138 | 86,472,742 |
Common stock, outstanding (in shares) | 80,881,280 | 83,549,879 |
Common stock, authorized (in shares) | 250,000,000 | 250,000,000 |
Treasury stock, common shares (in shares) | 6,452,858 | 2,922,863 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | |||
Net premiums earned | $ 510,768 | $ 475,266 | $ 444,294 |
Net investment income | 67,512 | 46,406 | 38,072 |
Net realized investment (losses) gains | (33) | 481 | 729 |
Other revenues | 756 | 1,192 | 1,977 |
Total revenues | 579,003 | 523,345 | 485,072 |
Expenses | |||
Insurance claims and claim expenses (benefits) | 22,618 | (3,594) | 12,305 |
Underwriting and operating expenses | 110,699 | 117,490 | 142,303 |
Service expenses | 771 | 1,094 | 2,509 |
Interest expense | 32,212 | 32,163 | 31,796 |
Gain from change in fair value of warrant liability | 0 | (1,113) | (566) |
Total expenses | 166,300 | 146,040 | 188,347 |
Income before income taxes | 412,703 | 377,305 | 296,725 |
Income tax expense | 90,593 | 84,403 | 65,595 |
Net income | $ 322,110 | $ 292,902 | $ 231,130 |
Earnings per share | |||
Basic (in dollars per share) | $ 3.91 | $ 3.45 | $ 2.70 |
Diluted (in dollars per share) | $ 3.84 | $ 3.39 | $ 2.65 |
Weighted average common shares outstanding | |||
Basic (in shares) | 82,407 | 84,921 | 85,620 |
Diluted (in shares) | 83,854 | 85,999 | 86,885 |
Comprehensive income: | |||
Net income | $ 322,110 | $ 292,902 | $ 231,130 |
Other comprehensive income (loss), net of tax: | |||
Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $17,113, $(54,608) and $(13,768) for each of the years in the three-year period ended December 31, 2023, respectively | 64,380 | (205,428) | (51,795) |
Reclassification adjustment for realized losses (gains) included in net income, net of tax (benefit) expense of $(7), $101 and $153 for each of the years in the three-years ended December 31, 2023, respectively | 26 | (380) | (576) |
Other comprehensive income (loss), net of tax | 64,406 | (205,808) | (52,371) |
Comprehensive income | $ 386,516 | $ 87,094 | $ 178,759 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Unrealized gains (losses) in accumulated other comprehensive income, tax expense (benefit) | $ 17,113 | $ (54,608) | $ (13,768) |
Reclassification adjustment for realized losses (gains) included in net income, tax (benefit) expense | $ (7) | $ 101 | $ 153 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock - Class A | Additional Paid-in Capital | Treasury Stock, At Cost | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2020 | 85,163,000 | |||||
Beginning balance at Dec. 31, 2020 | $ 1,369,591 | $ 852 | $ 937,872 | $ 0 | $ 53,856 | $ 377,011 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock: class A shares issued related to warrant exercises (in shares) | 86,000 | |||||
Common stock: class A shares issued related to warrant exercises | 1,983 | $ 1 | 1,982 | |||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes (in shares) | 544,000 | |||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | (1,225) | $ 5 | (1,230) | |||
Share-based compensation expense | 16,678 | 16,678 | ||||
Change in unrealized investment gains/losses, tax expense (benefit) | (52,371) | (52,371) | ||||
Net income | 231,130 | 231,130 | ||||
Ending balance (in shares) at Dec. 31, 2021 | 85,793,000 | |||||
Ending balance at Dec. 31, 2021 | 1,565,786 | $ 858 | 955,302 | 0 | 1,485 | 608,141 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock: class A shares issued related to warrant exercises (in shares) | 84,000 | |||||
Common stock: class A shares issued related to warrant exercises | 1,768 | $ 1 | 1,767 | |||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes (in shares) | 596,000 | |||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | 229 | $ 6 | 223 | |||
Repurchase of common stock (in shares) | (2,923,000) | |||||
Repurchase of common stock | (56,575) | (56,575) | ||||
Share-based compensation expense | 15,425 | 15,425 | ||||
Change in unrealized investment gains/losses, tax expense (benefit) | (205,808) | (205,808) | ||||
Net income | $ 292,902 | 292,902 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 83,549,879 | 83,550,000 | ||||
Ending balance at Dec. 31, 2022 | $ 1,613,727 | $ 865 | 972,717 | (56,575) | (204,323) | 901,043 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes (in shares) | 861,000 | |||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | 1,193 | $ 8 | 1,185 | |||
Repurchase of common stock (in shares) | (3,530,000) | |||||
Repurchase of common stock | (92,346) | (92,346) | ||||
Share-based compensation expense | 16,914 | 16,914 | ||||
Change in unrealized investment gains/losses, tax expense (benefit) | 64,406 | 64,406 | ||||
Net income | $ 322,110 | 322,110 | ||||
Ending balance (in shares) at Dec. 31, 2023 | 80,881,280 | 80,881,000 | ||||
Ending balance at Dec. 31, 2023 | $ 1,926,004 | $ 873 | $ 990,816 | $ (148,921) | $ (139,917) | $ 1,223,153 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Change in unrealized investment gains/losses, tax expense (benefit) | $ 17,120 | $ (54,709) | $ (13,921) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income | $ 322,110 | $ 292,902 | $ 231,130 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net realized investment loss (gains) | 33 | (481) | (729) |
Gain from change in fair value of warrant liability | 0 | (1,113) | (566) |
Depreciation and amortization | 11,541 | 11,870 | 11,232 |
Net amortization of premium on investment securities | 481 | 5,721 | 6,733 |
Amortization of debt discount and debt issuance costs | 1,961 | 1,846 | 1,861 |
Deferred income taxes | 90,593 | 84,393 | 65,510 |
Share-based compensation expense | 16,914 | 15,425 | 16,678 |
Changes in operating assets and liabilities: | |||
Premiums receivable | (6,776) | (9,322) | (10,579) |
Accrued investment income | (5,641) | (2,244) | (2,038) |
Deferred policy acquisition costs, net | (4,341) | 1,020 | 2,641 |
Reinsurance recoverable | (5,927) | (1,267) | (2,712) |
Prepaid federal income taxes | (80,877) | (65,165) | (42,853) |
Other assets | (316) | 236 | (218) |
Unearned premiums | (30,740) | (16,202) | 20,420 |
Reserve for insurance claims and claim expenses | 24,138 | (3,715) | 12,984 |
Reinsurance balances, net | (859) | (1,904) | (683) |
Accounts payable and accrued expenses | 10,389 | 1,394 | 16,908 |
Net cash provided by operating activities | 342,683 | 313,394 | 325,719 |
Cash flows from investing activities | |||
Purchase of short-term investments | (166,224) | (313,926) | (10,640) |
Purchase of fixed-maturity investments, available-for-sale | (488,562) | (233,586) | (514,405) |
Proceeds from maturity of short-term investments | 320,545 | 151,635 | 0 |
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 143,613 | 116,663 | 163,103 |
Additions to software and equipment | (9,372) | (10,572) | (12,238) |
Net cash used in investing activities | (200,000) | (289,786) | (374,180) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock related to employee equity plans | 10,549 | 5,442 | 4,201 |
Proceeds from issuance of common stock related to warrant exercises | 0 | 518 | 503 |
Taxes paid related to net share settlement of equity awards | (9,356) | (5,213) | (5,426) |
Payments of debt issuance costs | 0 | 0 | (1,108) |
Repurchases of common stock | (91,613) | (56,575) | 0 |
Net cash used in financing activities | (90,420) | (55,828) | (1,830) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 52,263 | (32,220) | (50,291) |
Cash, cash equivalents and restricted cash, beginning of period | 44,426 | 76,646 | 126,937 |
Cash, cash equivalents and restricted cash, end of period | 96,689 | 44,426 | 76,646 |
Supplemental disclosures of cash flow information | |||
Interest paid | 29,500 | 29,500 | 29,500 |
Income taxes (paid) refunded | $ (20) | $ 20 | $ 457 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation NMI Holdings, Inc. (NMIH) is a Delaware corporation, incorporated in May 2011 to provide private mortgage guaranty insurance (which we refer to as mortgage insurance or MI) through its wholly-owned insurance subsidiaries, National Mortgage Insurance Corporation (NMIC) and National Mortgage Reinsurance Inc One (Re One). Our common stock is listed on the Nasdaq exchange under the ticker symbol "NMIH." NMIC, our primary insurance subsidiary, issued its first mortgage insurance policy in April 2013. NMIC is licensed to write mortgage insurance in all 50 states and the District of Columbia (D.C.). Re One historically provided reinsurance coverage to NMIC in accordance with certain statutory risk retention requirements. Such requirements have been repealed and the reinsurance coverage provided by Re One to NMIC has been commuted. Re One remains a wholly-owned, licensed insurance subsidiary; however, it does not currently have active insurance exposures. In August 2015, NMIH capitalized a wholly-owned subsidiary, NMI Services, Inc. (NMIS), through which we offer outsourced loan review services to mortgage loan originators. We operate as a single segment for the purposes of assessing performance and making operating decisions. Basis of Presentation The accompanying consolidated financial statements include the results of NMIH and its wholly-owned subsidiaries. All inter-company transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and our accounts are maintained in U.S. dollars. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities as of the balance sheet date. Estimates also affect the reported amounts of income and expenses for the reporting period. Actual results could differ from those estimates. |
Summary of Accounting Principle
Summary of Accounting Principles | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Accounting Principles | Summary of Accounting Principles Use of Estimates We use accounting principles and methods that conform to GAAP. We are required to apply significant judgment and make material estimates in the preparation of our financial statements and with regard to various accounting, reporting and disclosure matters. Assumptions and estimates are required to apply these principles where actual measurement is not possible or practical. Insurance Premium Revenue Recognition Premiums for primary mortgage insurance policies may be paid in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium), with such election and payment type fixed at policy inception. Premiums written at origination for single premium policies are initially deferred as unearned premiums and amortized into earnings over the estimated policy life, in accordance with the anticipated expiration of risk. Monthly premiums are recognized as revenue in the month billed and when the coverage is effective. Annual premiums are initially deferred and earned on a straight-line basis over the year of coverage. Upon cancellation of a policy, all remaining non-refundable deferred and unearned premium is immediately earned, and any refundable deferred and unearned premium is returned to the policyholder and recorded as a reduction to written premium and unearned premium reserve in the period paid. Premiums written on pool transactions are earned over the period that coverage is provided. Our pool insurance agreement with Fannie Mae expired on August 31, 2023 and we will not recognize any pool premiums written or earned in connection with the agreement in future periods. Concentrations For the years ended December 31, 2023, 2022 and 2021, no customer accounted for more than 10% of our consolidated revenues. At December 31, 2023, 2022 and 2021 approximately 10%, 11% and 10%, respectively, of our total risk-in-force (RIF) was concentrated in California. Reserves for Insurance Claims and Claim Expenses We establish reserves for claims based on our best estimate of the ultimate claim costs for defaulted loans using the general principles contained in ASC 944, Financial Services - Insurance (ASC 944). A loan is considered to be in "default" as of the payment date at which a borrower has missed the preceding two or more consecutive monthly payments. We establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as incurred but not reported (IBNR) reserves. We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees, as well as other general expenses of administering the claim settlement process. Claim expense reserves are either allocated ( i.e. , associated with a specific claim) or unallocated ( i.e. , not associated with a specific claim). The establishment of claims and claim expense reserves is subject to inherent uncertainty and requires significant judgment by management. Reserves are established by estimating the number of loans in default that will result in a claim payment, which is referred to as claim frequency, and the amount of claim payment expected to be paid on each such loan in default, which is referred to as claim severity. Claim frequency and severity estimates are established based on historical observed experience regarding certain loan factors, such as age of the default, size of the loan and loan-to-value (LTV) ratios, and are strongly influenced by assumptions about the path of certain economic factors, such as house price appreciation, trends in unemployment and mortgage rates. We consider the appropriateness of such inputs at each fiscal quarter and conduct an actuarial review annually to evaluate and, if necessary, update these assumptions. Investments We have designated our investment portfolio as available-for-sale and report our invested assets at fair value. Unrealized gains and losses in the portfolio, net of related tax expense or benefit, are recognized as a component of accumulated other comprehensive income (AOCI) in shareholders' equity. We measure fair value and classify invested assets in a hierarchy for disclosure purposes consisting of three "levels" based on the observability of inputs available in the marketplace used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). See Note 4, " Fair Value of Financial Instruments " for further discussion. Purchases and sales of investments are recorded on a trade date basis. Net investment income is recognized when earned, and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method, and is net of investment management fees and other investment related expenses. For asset-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to changes in effective yields and prepayment assumptions are recognized on a prospective basis. We recognize an impairment on a security through the consolidated statement of operations and comprehensive income if (i) we intend to sell the impaired security; or (ii) it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis. If a sale is intended or likely to be required, we write down the amortized cost basis of the security to fair value and recognize the full amount of the impairment through the statement of operations as a " Realized Investment Loss ." For securities in an unrealized loss position where a sale is not intended or likely to be required, we further assess if the decline in fair value below amortized cost is driven by a credit related impairment, considering several items including, but not limited to: • the severity of the decline in fair value; • the financial condition of the issuer; • the failure of the issuer to make scheduled interest or principal payments; • recent rating downgrades of the applicable security or issuer by one or more nationally recognized statistical ratings organization; and • other adverse conditions related to or impacting the security or issuer. To the extent we determine that a security impairment is credit-related, an impairment loss is recognized through the statement of operations as a provision for credit loss expense, and presented as a " Realized Investment Loss. " We recognize an allowance for credit losses for the difference between the amortized cost and present value of future expected cash flows, limited by the amount the fair value of the security is below its amortized cost. Subsequent changes (favorable and unfavorable) in credit losses are recognized through the statement of operations as a provision for or a reversal of credit loss expense, and presented as a " Realized Investment Gain or Loss. " The portion of a security impairment attributed to other non-credit related factors is recognized in other comprehensive income, net of taxes. We have elected to present accrued interest receivable separately from available for sale securities on our consolidated balance sheets. Accrued interest receivable was $19.8 million and $14.1 million as of December 31, 2023 and 2022, respectively, and is included in " Accrued Investment Income. " We have elected not to measure an allowance for credit losses for accrued interest receivable on available for sale securities. Accrued interest for available for sale securities is written off against interest income when the receivable has aged 90 days past due. We did not write off any accrued interest receivable during the years ended December 31, 2023, 2022 or 2021. We consider items such as U.S. Treasury Bills and commercial paper with original maturities of 12 months or less to be short-term investments. Deferred Policy Acquisition Costs (DAC) Costs directly associated with the successful acquisition of mortgage insurance policies, consisting of certain selling expenses and other policy issuance and underwriting expenses, are initially deferred and reported as DAC. DAC is reviewed periodically to determine that it does not exceed recoverable amounts. DAC is amortized to expense in proportion to estimated gross profits over the life of the associated policies. We revise the rate of amortization to reflect actual experience and any changes to persistency or loss development. Total amortization of DAC for the years ended December 31, 2023, 2022 and 2021, net of a portion of the ceding commissions earned under our quota share reinsurance agreements (see " Reinsurance ", below ) , was $3.6 million, $11.9 million and $22.8 million, respectively. Premium Deficiency Reserves We consider whether a premium deficiency exists and a premium deficiency reserve is required at each fiscal quarter using best estimate assumptions as of the testing date. A premium deficiency reserve is established if the net present value of expected future claim costs, claim adjustment expenses, policyholder dividends, unamortized acquisition costs and maintenance costs exceeds the net present value of expected future premiums, anticipated investment income and existing reserves for a specified group of policies. We have determined that no premium deficiency reserves were necessary for any of the years in the three-year period ended December 31, 2023. Reinsurance We cede insurance risk through the use of reinsurance contracts and follow reinsurance accounting for those transactions where significant risk is transferred. We account for premiums, claims and claim expenses that are ceded to reinsurers on basis consistent with that which we use to account for the original policies we issue and pursuant to the terms of our reinsurance contracts. We account for premiums ceded or otherwise paid to reinsurers as a reduction to premium revenue. NMIC entered into quota share reinsurance treaties effective September 1, 2016 (the 2016 QSR Transaction), January 1, 2018 (the 2018 QSR Transaction), April 1, 2020 (the 2020 QSR Transaction and, as amended January 1, 2024, the Amended 2020 QSR Transaction), January 1, 2021 (the 2021 QSR Transaction), October 1, 2021 (the 2022 QSR Transaction), July 1, 2022 (the 2022 Seasoned QSR Transaction), and January 1, 2023 (the 2023 QSR Transaction), which we refer to collectively as the QSR Transactions. We earn profit and ceding commissions in connection with the QSR Transactions (see Note 6, " Reinsurance "). Profit commissions represent a percentage of the profits recognized by reinsurers that are returned to us, based on the level of claims and claim expenses that we cede. We recognize any profit commissions we earn as a decrease to ceded earned premiums. Ceding commissions are calculated as a percentage of ceded written premiums under the 2016 QSR Transaction and as a percentage of ceded earned premiums under the 2018, 2020 (and Amended 2020), 2021, 2022, 2022 Seasoned and 2023 QSR Transactions, and are intended to cover our costs of acquiring and servicing direct policies. We recognize any ceding commissions generated under the QSR Transactions in a manner consistent with our recognition of earnings on the underlying reinsured policies. We account for ceding commissions earned as a reduction to underwriting and operating expenses. Under the QSR Transactions, we cede a portion of claims and claim expenses and reserves to our reinsurers, and account for such ceded reserves as "Reinsurance Recoverables" on the consolidated balance sheets and such ceded expenses as reductions to claims and claim expenses on the consolidated statements of operations. As of December 31, 2023 and 2022, we had $27.5 million and $21.6 million, respectively, of reinsurance recoverables under the QSR Transactions. We remain directly liable for all claim payments if we are unable to collect the recoverables due from our reinsurers and, as such, we actively monitor and manage our counterparty credit exposure to our reinsurance providers. We establish an allowance for expected credit loss against our reinsurance recoverables if we do not expect to recover amounts due from one or more of our reinsurance counterparties, and report our reinsurance recoverables net of such allowance, if any. We actively monitor the counterparty credit profiles of our reinsurers and each is required to partially collateralize its obligations under the terms of our QSR Transactions. The allowance for credit loss established with respect to our reinsurance recoverables was deemed immaterial as of December 31, 2023 and 2022. Variable Interest Entities NMIC is a party to excess-of-loss reinsurance agreements with Oaktown Re III Ltd., Oaktown Re V Ltd., Oaktown Re VI Ltd., and Oaktown Re VII Ltd. (special purpose reinsurance entities collectively referred to as the Oaktown Re Vehicles) effective July 30, 2019, October 29, 2020, April 27, 2021, and October 26, 2021, respectively. At inception of the respective reinsurance agreements, we determined that each of the Oaktown Re Vehicles was a variable interest entity (VIE), as defined under GAAP Accounting Standards Codification (ASC) 810, because they did not have sufficient equity at risk to finance their respective activities. We evaluated the VIEs at inception to determine whether NMIC was the primary beneficiary under each deal and, if so, whether we were required to consolidate the assets and liabilities of each VIE. The primary beneficiary of a VIE is an enterprise that (1) has the power to direct the activities of the VIE, which most significantly impact its economic performance and (2) has significant economic exposure to the VIE, i.e. , the obligation to absorb losses or receive benefits that could potentially be significant. The determination of whether an entity is the primary beneficiary of a VIE is complex and requires management judgment regarding determinative factors, including the expected results of the VIE and how those results are absorbed by beneficial interest holders, as well as which party has the power to direct activities that most significantly impact the performance of the VIE. We concluded that we are not the primary beneficiary of each VIE and, as such, we do not consolidate them in our consolidated financial statements. See Note 6, " Reinsurance " for further discussion of the reinsurance arrangements. Income Taxes We account for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes . The liability method measures the expected future tax effects of temporary differences at the enacted tax rates applicable for the period in which the deferred asset or liability is expected to be realized or settled. Temporary differences are differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements that would result in future increases or decreases in taxes owed on a cash basis compared to amounts already recognized as tax expense in the consolidated statements of operations. We purchase non-interest bearing U.S. Mortgage Guaranty Tax and Loss Bonds issued by the Treasury Department in order to claim a tax deduction for our contingency reserve balance. The tax and loss bonds are carried at cost and are reported as " Prepaid Federal Income Taxes " on the consolidated balance sheets. See Note 10, " Income Taxes ", for further discussion of the tax and loss bonds and other income tax matters. Share-Based Compensation We account for stock compensation in accordance with ASC 718, Compensation - Stock Compensation , which addresses accounting for share-based awards and recognition of compensation expense, measured using grant date fair value, over the requisite service or performance period of the award. Share-based compensation includes restricted stock units (RSUs) and stock option grants under our stock incentive plans. We calculate the fair value of stock option grants using a Black-Scholes option pricing model, which takes into account various subjective assumptions. Key assumptions used in the model include the expected volatility of our stock price, dividend yield and the risk-free interest rate, as well as the expected option term, giving consideration to the contractual terms of any award. We use the simplified method to estimate expected option term during the period as sufficient historical exercise data is not available. RSU grants may contain a service condition, or performance and service conditions. RSU grants are valued at our stock price on the date of grant less the present value of anticipated dividends, and we recognize their fair value as compensation expense over their requisite service or performance and service periods. We account for stock option and RSU forfeitures as they occur. Share-based compensation is recorded in “Underwriting and Operating Expenses” on the consolidated statements of operations and comprehensive income. Earnings Per Share (EPS) Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and common share equivalents that would be issuable upon the vesting of existing service-based and certain performance and service-based RSUs, and exercise of vested and unvested stock options and outstanding warrants. Common share equivalents are excluded from EPS computations in the periods in which they have an anti-dilutive effect. Share Repurchases Common stock repurchases are recorded at cost and presented as “ Treasury Stock ” on the consolidated balance sheets and statements of changes in shareholders’ equity. At the date of repurchase, shareholders’ equity is reduced by the aggregate repurchase price plus commissions, applicable taxes and other expenses that arise from the repurchase transaction. Cash and Cash Equivalents We consider items such as U.S. Treasury Bills, certificates of deposit and money market funds with original maturities of 90 days or less to be cash equivalents. Software and Equipment We capitalize certain costs associated with the development of internal-use software and equipment. Software and equipment are stated at cost, less accumulated amortization and depreciation. Amortization of software and depreciation of equipment commences at the beginning of the month following our placement of the assets into use. Amortization and depreciation are calculated on a straight-line basis over the estimated useful life of the respective assets, typically from three Underwriting and Operating Expenses ” on the consolidated statements of operations and comprehensive income. For further detail, see Note 11, “ Software and Equipment. ” Leases We recognize right-of-use (ROU) assets and corresponding lease liabilities for our lease arrangements. Lease liabilities are established based on the estimated present value of lease payments over the relevant lease term. We estimate a discount rate for each lease based on our estimated incremental borrowing rate at the commencement date of the relevant lease, taking into consideration the cost of any outstanding collateralized borrowings we have at such time with adjustment for the terms of the lease agreement, and prevailing market conditions and macroeconomic factors at the time of its commencement. ROU assets are measured as the associated lease liability plus any direct costs incurred in connection with the initial establishment of the lease, less any lease incentives received. Business Combinations, Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired from a business combination. In accordance with ASC 350, Intangibles – Goodwill and Other , we test goodwill for impairment annually or more frequently if we believe indicators of impairment exist. We have not identified any impairments of goodwill through December 31, 2023. Our intangible assets consist of state licenses and Fannie Mae and Freddie Mac (collectively, the GSEs) applications which have indefinite lives. We test indefinite-lived intangible assets for impairment annually or more frequently if we believe indicators of impairment exist. We have not identified any impairments of indefinite-lived intangible assets through December 31, 2023. Premiums Receivable Premiums receivable consists of premiums due on our mortgage insurance policies. If a mortgage insurance premium is unpaid for more than 120 days, the associated receivable is written off against earned premium and the related insurance policy is canceled. We recognize an allowance for credit losses for premiums receivable based on credit losses expected to arise over the life of the receivable. Due to the nature of our insurance policies (a necessary precondition for access to mortgage credit for covered borrowers) and the short duration of the related receivables, we do not typically experience credit losses against our premium receivables and the allowance for credit loss established on premium receivables was deemed immaterial at December 31, 2023 and 2022. Premiums receivable may be written off prior to 120 days in the ordinary course of business for non-credit events including, but not limited to, the modification or refinancing of an underlying insured loan. We established a $2.7 million and $2.3 million reserve for premium write-offs at December 31, 2023 and 2022, respectively. Other Revenues Other revenues represent underwriting fee revenue from our subsidiary, NMIS, which provides outsourced loan review services to mortgage loan originators. NMIS fees are earned and recognized as services are provided. Recent Accounting Pronouncements – Adopted In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). The update provides guidance to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The FASB subsequently issued ASU 2019-09 in November 2019 and ASU 2020-11 in November 2020, which amended the effective date for this standard and provided transition relief to facilitate early application for long duration contracts. The standard will now take effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. We adopted this ASU on January 1, 2023 and determined it did not have a material impact on our consolidated financial statements as none of our contracts were within scope of the update. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The update provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. Reference rate reform refers to the global transition away from referencing the London Interbank Offered Rate (LIBOR) in financial contracts. Topic 848 includes optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. In December 2022, the FASB issued ASU 2022-06, which extended the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. We adopted Topic 848 on September 30, 2023 and determined it did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements – Not yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The update expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The standard will take effect for all public business entities, including those that have only a single reportable segment for fiscal years beginning after December 15, 2023. We are currently evaluating the impact the adoption of this ASU will have, if any, on our consolidated financial statements. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments We hold all investments on an available-for-sale basis at fair value on our consolidated balance sheets and evaluate each position quarterly for impairment. We recognize an impairment on a security through the statement of operations if (i) we intend to sell the impaired security; or (ii) it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis. If a sale is intended or likely to be required, we recognize an impairment loss equivalent to the difference of the amortized cost basis of the security and its fair value through the consolidated statements of operations and comprehensive income as a “Net Realized Investment Loss.” In the event of an impairment of a security that we intend to and have the ability to hold to maturity, we evaluate the drivers of the impairment to determine the portion that is credit related and the portion that is non-credit related. The portion of impairment loss that is attributed to credit related factors is recognized through the statement of operations as a provision for credit loss and the portion that is attributed to non-credit related factors is recognized in other comprehensive income, net of taxes. Fair Values and Gross Unrealized Gains and Losses on Investments Amortized Gross Unrealized Fair Gains Losses As of December 31, 2023 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 164,278 $ 3,374 $ (1,264) $ 166,388 Municipal debt securities 678,339 1,253 (58,462) 621,130 Corporate debt securities 1,624,187 7,868 (120,576) 1,511,479 Asset-backed securities 52,242 1 (4,032) 48,211 Total bonds 2,519,046 12,496 (184,334) 2,347,208 Short-term investments 23,816 2 (5) 23,813 Total investments $ 2,542,862 $ 12,498 $ (184,339) $ 2,371,021 Amortized Gross Unrealized Fair Gains Losses As of December 31, 2022 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 82,301 $ — $ (2,369) $ 79,932 Municipal debt securities 563,972 — (80,796) 483,176 Corporate debt securities 1,457,589 1,149 (165,096) 1,293,642 Asset-backed securities 74,762 — (6,204) 68,558 Total bonds 2,178,624 1,149 (254,465) 1,925,308 Short-term investments 174,123 185 (227) 174,081 Total investments $ 2,352,747 $ 1,334 $ (254,692) $ 2,099,389 We did not own any mortgage-backed securities in our asset-backed securities portfolio at December 31, 2023 or 2022. The following table presents a breakdown of the fair value of our corporate debt securities by issuer industry group as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Financial 35 % 38 % Consumer 26 24 Utilities 13 11 Industrial 9 8 Communications 9 11 Technology 8 8 Total 100 % 100 % As of December 31, 2023 and 2022, approximately $5.3 million and $5.4 million, respectively, of our cash and investments were held in the form of U.S. Treasury securities on deposit with various state insurance departments to satisfy regulatory requirements. Scheduled Maturities The amortized cost and fair value of available-for-sale securities as of December 31, 2023 and 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed securities provide for periodic payments throughout their lives, they are listed below in a separate category. As of December 31, 2023 Amortized Fair (In Thousands) Due in one year or less $ 191,375 $ 189,729 Due after one through five years 1,237,192 1,162,259 Due after five through ten years 1,050,989 959,633 Due after ten years 11,064 11,189 Asset-backed securities 52,242 48,211 Total investments $ 2,542,862 $ 2,371,021 As of December 31, 2022 Amortized Fair (In Thousands) Due in one year or less $ 271,613 $ 270,428 Due after one through five years 935,615 862,747 Due after five through ten years 1,047,461 875,947 Due after ten years 23,296 21,709 Asset-backed securities 74,762 68,558 Total investments $ 2,352,747 $ 2,099,389 Aging of Unrealized Losses As of December 31, 2023, the investment portfolio had gross unrealized losses of $184.3 million, of which $183.1 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer. As of December 31, 2022, the investment portfolio had gross unrealized losses of $254.7 million, of which $218.5 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer. For those securities in an unrealized loss position, the length of time the securities were in such a position is as follows: Less Than Twelve Months Twelve Months or Greater Total # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses As of December 31, 2023 ($ In Thousands) U.S. Treasury securities and obligations of U.S. government agencies 8 $ 5,022 $ (62) 17 $ 72,003 $ (1,202) 25 $ 77,025 $ (1,264) Municipal debt securities 14 56,280 (502) 217 467,098 (57,960) 231 523,378 (58,462) Corporate debt securities 13 56,039 (705) 266 1,150,662 (119,871) 279 1,206,701 (120,576) Asset-backed securities — — — 23 47,426 (4,032) 23 47,426 (4,032) Short-term investments 1 9,925 (5) — — — 1 9,925 (5) Total 36 $ 127,266 $ (1,274) 523 $ 1,737,189 $ (183,065) 559 $ 1,864,455 $ (184,339) Less Than Twelve Months Twelve Months or Greater Total # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses As of December 31, 2022 ($ In Thousands) U.S. Treasury securities and obligations of U.S. government agencies 19 $ 77,164 $ (2,260) 4 $ 2,768 $ (109) 23 $ 79,932 $ (2,369) Municipal debt securities 57 143,097 (12,942) 181 340,079 (67,854) 238 483,176 (80,796) Corporate debt securities 141 434,174 (19,699) 168 790,537 (145,397) 309 1,224,711 (165,096) Asset-backed securities 12 13,527 (1,097) 14 55,031 (5,107) 26 68,558 (6,204) Short-term investments 12 104,236 (227) — — — 12 104,236 (227) Total 241 $ 772,198 $ (36,225) 367 $ 1,188,415 $ (218,467) 608 $ 1,960,613 $ (254,692) Allowance for Credit Losses As of December 31, 2023 and 2022, we did not recognize an allowance for credit loss for any security in the investment portfolio and we did not record any provision for credit loss for investment securities during the years ended December 31, 2023 or 2022. We evaluated the securities in an unrealized loss position as of December 31, 2023, assessing their credit ratings as well as any adverse conditions specifically related to the security. Based upon our assessment of the amount and timing of cash flows to be collected over the remaining life of each instrument, we believe the unrealized losses as of December 31, 2023 are not indicative of the ultimate collectability of the current amortized cost of the securities. Rather, the unrealized losses on securities held as of December 31, 2023 were primarily driven by fluctuations in interest rates, and to a lesser extent, movements in credit spreads following the purchase of those securities. Net Investment Income The following table presents the components of net investment income: For the years ended December 31, 2023 2022 2021 (In Thousands) Investment income (1) $ 68,214 $ 47,720 $ 39,385 Investment expenses (702) (1,314) (1,313) Net investment income $ 67,512 $ 46,406 $ 38,072 (1) Includes interest income recognized on cash and cash equivalents of $2.3 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively. Interest income recognized on cash and cash equivalents was de minimis for the year ended December 31, 2021. The following table presents the components of net realized investment (losses) gains: For the years ended December 31, 2023 2022 2021 (In Thousands) Gross realized investment gains $ — $ 490 $ 729 Gross realized investment losses (33) (9) — Net realized investment (losses) gains $ (33) $ 481 $ 729 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following describes the valuation techniques used by us to determine the fair value of our financial instruments: We established a fair value hierarchy by prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this standard are described below: Level 1 – Fair value measurements based on quoted prices in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted price for such instruments. Level 2 – Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 – Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions, which require significant management judgment or estimation about the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assets classified as Level 1 and Level 2 To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources 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. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information and data changes, and directional moves compared to market moves. This model combines all inputs to arrive at a value assigned to each security. We have not made any adjustments to the prices obtained from the independent pricing sources. The following tables present the level within the fair value hierarchy at which our financial instruments were measured: Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of December 31, 2023 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 166,388 $ — $ — $ 166,388 Municipal debt securities — 621,130 — 621,130 Corporate debt securities — 1,511,479 — 1,511,479 Asset-backed securities — 48,211 — 48,211 Cash, cash equivalents and short-term investments 120,502 — — 120,502 Total assets $ 286,890 $ 2,180,820 $ — $ 2,467,710 Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of December 31, 2022 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 79,932 $ — $ — $ 79,932 Municipal debt securities — 483,176 — 483,176 Corporate debt securities — 1,293,642 — 1,293,642 Asset-backed securities — 68,558 — 68,558 Cash, cash equivalents and short-term investments 218,507 — — 218,507 Total assets $ 298,439 $ 1,845,376 $ — $ 2,143,815 There were no transfers between Level 2 and Level 3 of the fair value hierarchy during the years ended December 31, 2023 or 2022. Financial Instruments Not Measured at Fair Value On June 19, 2020, we issued $400 million aggregate principal amount of senior secured notes that mature on June 1, 2025 (the Notes) and used a portion of the proceeds from the Notes offering to repay amounts due under our then outstanding $150 million term loan. At December 31, 2023, the Notes were carried at a cost of $397.6 million, net of unamortized debt issuance costs of $2.4 million, and had a fair value of $401.9 million as assessed under our Level 2 hierarchy. At December 31, 2022, the Notes were carried at a cost of $396.1 million, net of unamortized debt issuance costs of $3.9 million, and had a fair value of $405.9 million. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Secured Notes At December 31, 2023, we had $400 million aggregate principal amount of senior secured notes outstanding. The Notes were issued pursuant to an indenture dated June 19, 2020 and bear interest at a rate of 7.375%, payable semi-annually on June 1 and December 1. The Notes mature on June 1, 2025. We may elect to redeem the Notes in whole or in part at any time prior to March 1, 2025 at a price based on 100% of the aggregate principal amount of any Notes redeemed plus the “Applicable Premium,” plus accrued and unpaid interest thereon. Applicable Premium is defined as the greater of (1) 1.0% of the principal amount of the Notes, or (2) the excess of the present value of the principal value of the Notes plus all future interest payments over the principal amount. We may elect to redeem the Notes in whole or in part at any time prior to March 1, 2025 at a price equal to 100% of the aggregate principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon. Interest expense for the Notes includes interest and the amortization of capitalized debt issuance costs. In connection with the Notes offering, we recorded capitalized debt issuance costs of $7.4 million. Such amounts will be amortized over the contractual life of the Notes using the effective interest method. The effective interest rate on the Notes is 7.825%. At December 31, 2023 and 2022, approximately $2.4 million and $3.9 million, respectively, of unamortized debt issuance costs remained. At December 31, 2023 and 2022, $2.5 million of accrued and unpaid interest on the Notes was included in “ Accounts Payable and Accrued Expenses ” on the consolidated balance sheets. 2021 Revolving Credit Facility On November 29, 2021, we amended our $110 million senior secured revolving credit facility (the 2020 Revolving Credit Facility and as amended, the 2021 Revolving Credit Facility), expanding the lender group, increasing the revolving capacity to $250 million, and extending the maturity from February 22, 2023 to the earlier of (x) November 29, 2025, or (y) if any existing senior secured notes remain outstanding on such date, February 28, 2025. Borrowings under the 2021 Revolving Credit Facility may be used for general corporate purposes, including to support the growth of our new business production and operations, and accrue interest at a variable rate equal to, at our discretion, (i) a Base Rate (as defined in the 2021 Revolving Credit Facility) subject to a floor of 1.00% per annum plus a margin of 0.375% to 1.875% per annum, or (ii) the Adjusted Term Secured Overnight Financing Rate (as defined in the 2021 Revolving Credit Facility) plus a margin of 1.375% to 2.875% per annum, with the margin in each of (i) or (ii) based on our applicable corporate credit rating at the time. As of December 31, 2023 and 2022, no amounts were drawn under the 2021 Revolving Credit Facility. Under the 2021 Revolving Credit Facility, we are required to pay a quarterly commitment fee on the average daily undrawn amount of 0.175% to 0.525%, based on the applicable corporate credit rating at the time. As of December 31, 2023, the applicable commitment fee was 0.30%. For the years ended December 31, 2023, 2022 and 2021, we recorded $0.8 million, $0.8 million and $0.4 million of commitment fees in interest expense, respectively. In January 2024, Moody's upgraded its insurance financial strength rating of NMIC and its rating of the Notes. As a result of the upgrade, the commitment fee due under the 2021 Revolving Credit Facility will be reduced to 0.225% in future periods. We incurred debt issuance costs of $1.1 million in connection with the 2021 Revolving Credit Facility and had $0.6 million of unamortized debt issuance costs associated with the 2020 Revolving Credit Facility remaining at the time of its amendment and replacement. Combined unamortized debt issuance costs are amortized through interest expense on a straight-line basis over the contractual life of the 2021 Revolving Credit Facility. At December 31, 2023 and 2022, remaining unamortized deferred debt issuance costs were $0.8 million and $1.2 million, respectively, in “Other Assets” on our consolidated balance sheets. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2023 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance We enter into third-party reinsurance transactions to actively manage our risk, ensure compliance with PMIERs, state regulatory and other applicable capital requirements, (respectively, as defined therein), and support the growth of our business. The Wisconsin Office of the Commissioner of Insurance (Wisconsin OCI) has approved and the GSEs have indicated their non-objection to all such transactions (subject to certain conditions and ongoing review). The effect of our reinsurance agreements on premiums written and earned is as follows: For the years ended December 31, 2023 2022 2021 (In Thousands) Net premiums written Direct $ 619,670 $ 577,926 $ 557,050 Ceded (1) (139,130) (117,680) (88,539) Net premiums written $ 480,540 $ 460,246 $ 468,511 Net premiums earned Direct $ 650,411 $ 594,127 $ 536,630 Ceded (1) (139,643) (118,861) (92,336) Net premiums earned $ 510,768 $ 475,266 $ 444,294 (1) Net of profit commission. Excess-of-loss Reinsurance Insurance-Linked Notes NMIC is a party to reinsurance agreements with Oaktown Re III Ltd., Oaktown Re V Ltd., Oaktown Re VI Ltd., and Oaktown Re VII Ltd. (special purpose reinsurance entities collectively referred to as the Oaktown Re Vehicles) effective July 30, 2019, October 29, 2020, April 27, 2021, and October 26, 2021, respectively. Each agreement provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies. Under each agreement, NMIC retains a first layer of aggregate loss exposure on covered policies and the respective Oaktown Re Vehicle then provides second layer loss protection up to a defined reinsurance coverage amount. NMIC then retains losses in excess of the respective reinsurance coverage amounts. NMIC makes risk premium payments to the Oaktown Re Vehicles for the applicable outstanding reinsurance coverage amount and pays an additional amount for anticipated operating expenses (capped at $250 thousand per year). NMIC ceded aggregate premiums to the Oaktown Re Vehicles of $31.1 million, $41.9 million and $41.3 million during the years ended December 31, 2023, 2022 and 2021, respectively. NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure under each excess-of-loss agreement. NMIC did not cede any incurred losses on covered policies to the Oaktown Re Vehicles during the years ended December 31, 2023, 2022 and 2021, as the aggregate first layer risk retention for each applicable agreement was not exhausted during such periods. Under the terms of each excess-of-loss reinsurance agreement, the Oaktown Re Vehicles are required to fully collateralize their outstanding reinsurance coverage amount to NMIC with funds deposited into segregated reinsurance trusts. Such trust funds are required to be invested in short-term U.S. Treasury money market funds at all times. Each Oaktown Re Vehicle financed its respective collateral requirement through the issuance of mortgage insurance-linked notes to unaffiliated investors. Such insurance-linked notes mature ten years (in the case of the notes issued by Oaktown Re III Ltd. and Oaktown Re V Ltd.) and 12.5 years (in the case of the notes issued by Oaktown Re VI Ltd. and Oaktown Re VII Ltd.) from the inception date of their associated reinsurance agreement. We refer to NMIC’s reinsurance agreements with and the insurance-linked note issuances by Oaktown Re Vehicles individually as the 2019 ILN Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and 2021-2 ILN Transaction, and collectively as the ILN Transactions. The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles decrease (over a ten-year period in the case of Oaktown Re III Ltd. and Oaktown Re V Ltd. and 12.5-year NMIC holds optional termination rights under each ILN Transaction, including, among others, an optional call feature which provides NMIC the discretion to terminate the transaction on or after a prescribed date, and a clean-up call if the outstanding reinsurance coverage amount amortizes to 10% or less of the reinsurance coverage amount at inception or if NMIC reasonably determines that changes to GSE or rating agency asset requirements would cause a material and adverse effect on the capital treatment afforded to NMIC under a given agreement. In addition, there are certain events that trigger mandatory termination of an agreement, including NMIC's failure to pay premiums or consent to reductions in a trust account to make principal payments to noteholders, among others. Effective July 25, 2023, NMIC exercised its optional call to terminate and commute its previously outstanding excess of loss reinsurance agreement with Oaktown Re II Ltd. In connection with the termination and commutation of the agreement, the insurance-linked notes issued by Oaktown Re II Ltd. were redeemed in full with a distribution of remaining collateral assets. The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding ILN Transaction. Current amounts are presented as of December 31, 2023. ( $ values in thousands) Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1) 2019 ILN Transaction July 30, 2019 6/1/2018 – 6/30/2019 $326,905 $159,476 $123,424 $121,751 2020-2 ILN Transaction October 29, 2020 4/1/2020 – 9/30/2020 (2) 242,351 55,792 121,777 121,177 2021-1 ILN Transaction April 27, 2021 10/1/2020 – 3/31/2021 (3) 367,238 217,630 163,708 163,394 2021-2 ILN Transaction October 26, 2021 4/1/2021 – 9/30/2021 (4) 363,596 310,567 146,229 145,858 (1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable ILN Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss. (2) Approximately 1% of the production covered by the 2020-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2020. (3) Approximately 1% of the production covered by the 2021-1 ILN Transaction has coverage reporting dates between July 1, 2019 and September 30, 2020. (4) Approximately 2% of the production covered by the 2021-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2021. Under the terms of our ILN Transactions, we are required to maintain a certain level of restricted funds in premium deposit accounts with Bank of New York Mellon until the respective notes have been redeemed in full. “ Cash and Cash Equivalents ” on our consolidated balance sheets includes restricted amounts of $1.3 million and $2.2 million as of December 31, 2023 and 2022, respectively. The restricted balances required under these transactions will decline over time as the outstanding principal balance of the respective insurance-linked notes are amortized. Traditional Reinsurance NMIC is party to five excess-of-loss reinsurance agreements with broad panels of third-party reinsurers – the 2022-1 XOL Transaction, effective April 1, 2022, the 2022-2 XOL Transaction, effective July 1, 2022, the 2022-3 XOL Transaction, effective October 1, 2022, the 2023-1 XOL Transaction, effective January 1, 2023, and the 2023-2 XOL Transaction, effective July 1, 2023 – which we refer to collectively as the XOL Transactions. Each XOL Transaction provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies. Under each agreement, NMIC retains a first layer of aggregate loss exposure on covered policies and the reinsurers then provide second layer loss protection up to a defined reinsurance coverage amount. The reinsurance coverage amount of each XOL Transaction is set to approximate the PMIERs minimum required assets of its reference pool and decreases from its peak over a ten-year period in the event the PMIERs minimum required assets of the pool declines. NMIC retains losses in excess of the outstanding reinsurance coverage amount. Under the terms of the XOL Transactions, NMIC makes risk premium payments to its third-party reinsurance providers for the outstanding reinsurance coverage amount and ceded aggregate premiums of $31.2 million and $13.9 million during the years ended December 31, 2023 and 2022, respectively. NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure under each agreement. NMIC did not cede any incurred losses on covered policies under the XOL Transactions during the years ended December 31, 2023 and 2022, as the aggregate first layer risk retention for each agreement was not exhausted during such periods. NMIC holds optional termination rights which provide it the discretion to terminate each XOL Transaction on or after a specified date. NMIC may also elect to terminate the XOL Transactions at any point if the outstanding reinsurance coverage amount amortizes to 10% or less of the reinsurance coverage amount provided at inception, or if it determines that it will no longer be able to take full PMIERs asset credit for the coverage. Additionally, under the terms of the treaties, NMIC may selectively terminate its engagement with individual reinsurers under certain circumstances. Such selective termination rights arise when, among other reasons, a reinsurer experiences a deterioration in its capital position below a prescribed threshold, and/or a reinsurer breaches (and fails to cure) its collateral posting obligation. Each of the third-party reinsurance providers that is party to the XOL Transactions has an insurer financial strength rating of A- or better by S&P Global Ratings (S&P), A.M. Best Company Inc. (A.M. Best) or both. The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding XOL Transaction. Current amounts are presented as of December 31, 2023. ( $ values in thousands) Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1) 2022-1 XOL Transaction April 1, 2022 10/1/2021 – 3/31/2022 (2) $289,741 $253,252 $133,366 $133,123 2022-2 XOL Transaction July 1, 2022 4/1/2022 – 6/30/2022 (3) 154,306 152,347 78,906 78,736 2022-3 XOL Transaction October 1, 2022 7/1/2022 – 9/30/2022 96,779 96,197 106,265 106,265 2023-1 XOL Transaction January 1, 2023 10/1/2022 – 6/30/2023 89,864 88,351 146,513 146,348 2023-2 XOL Transaction (4) July 1, 2023 7/1/2023 – 12/31/2023 71,602 71,602 113,372 113,372 (1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable XOL Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss. (2) Approximately 1% of the production covered by the 2022-1 XOL Transaction has coverage reporting dates between October 21, 2019 and September 30, 2021. (3) Approximately 1% of the production covered by the 2022-2 XOL Transaction has coverage reporting dates between January 4, 2021 and March 31, 2022. (4) The 2023-2 XOL Transaction provides coverage for production generated between July 1, 2023 and December 31, 2023. The current reinsurance coverage and current first layer retained loss will decrease in future periods to the extent the PMIERs minimum required assets of the covered pool declines. Quota Share Reinsurance NMIC is party to seven quota share reinsurance treaties – the 2016 QSR Transaction, effective September 1, 2016, the 2018 QSR Transaction, effective January 1, 2018, the 2020 QSR Transaction, effective April 1, 2020 (and amended effective January 1, 2024), the 2021 QSR Transaction, effective January 1, 2021, the 2022 QSR Transaction, effective October 1, 2021, the 2022 Seasoned QSR Transaction, effective July 1, 2022 and the 2023 QSR Transaction, effective January 1, 2023 – which we refer to collectively as the QSR Transactions. Under each of the QSR Transactions, NMIC cedes a proportional share of its risk on eligible policies to panels of third-party reinsurance providers. Each of the third-party reinsurance providers that is party to the QSR Transactions has an insurer financial strength rating of A- or better by S&P, A.M. Best or both. Under the terms of the 2016 QSR Transaction, NMIC cedes premiums written related to 25% of the risk on eligible primary policies written for all periods through December 31, 2017 and 100% of the risk under our pool agreement with Fannie Mae. The 2016 QSR Transaction is scheduled to terminate on December 31, 2027, except with respect to the ceded pool risk, which expired on August 31, 2023. NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2020, or at the end of any calendar quarter thereafter, which could result in NMIC recapturing the related risk. Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related to 25% of the risk on eligible policies written in 2018 and 20% of the risk on eligible policies written in 2019. The 2018 QSR Transaction is scheduled to terminate on December 31, 2029. NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2022, or at the end of any calendar quarter thereafter, which could result in NMIC recapturing the related risk. Under the terms of the 2020 QSR Transaction, NMIC cedes premiums earned related to 21% of the risk on eligible policies written from April 1, 2020 to December 31, 2020. The 2020 QSR Transaction is scheduled to terminate on December 31, 2030. NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2023, or at the end of any calendar quarter thereafter, which could result in NMIC recapturing the related risk. Under the terms of the 2021 QSR Transaction, NMIC cedes premiums earned related to 22.5% of the risk on eligible policies written from January 1, 2021 to October 30, 2021. The 2021 QSR Transaction is scheduled to terminate on December 31, 2031. NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2024, or at the end of any calendar quarter thereafter, which could result in NMIC recapturing the related risk. Under the terms of the 2022 QSR Transaction, NMIC cedes premiums earned related to 20% of the risk on eligible policies written primarily between October 30, 2021 and December 31, 2022. The 2022 QSR Transaction is scheduled to terminate on December 31, 2032. NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2024 or semi-annually thereafter, which could result in NMIC recapturing the related risk. In connection with the 2022 QSR Transaction, NMIC entered into the 2023 QSR Transaction as a springing back-to-back quota share agreement. Under the terms of the 2023 QSR Transaction, NMIC cedes premiums earned related to 20% of the risk on eligible policies written from January 1, 2023 to December 31, 2023. The 2023 QSR Transaction is scheduled to terminate on December 31, 2033. NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2025 or semi-annually thereafter, which could result in NMIC recapturing the related risk. Under the terms of the 2022 Seasoned QSR Transaction, NMIC cedes premiums earned related to 95% of the net risk on eligible policies primarily for a seasoned pool of mortgage insurance policies that had previously been covered under the retired Oaktown Re Ltd. and Oaktown Re IV Ltd. reinsurance transactions, after the consideration of coverage provided by other QSR Transactions. The 2022 Seasoned QSR Transaction is scheduled to terminate on June 30, 2032. NMIC has the option, based on certain conditions, to terminate the agreement as of June 30, 2025 or quarterly thereafter through December 31, 2027 with the payment of a termination fee, and as of March 31, 2028 or quarterly thereafter without the payment of a termination fee. Such termination could result in NMIC recapturing the related risk. NMIC may terminate any or all of the QSR Transactions without penalty if, due to a change in PMIERs requirements, it is no longer able to take full PMIERs asset credit for the RIF ceded under the respective agreements. Additionally, under the terms of the QSR Transactions, NMIC may elect to selectively terminate its engagement with individual reinsurers on a run-off basis ( i.e. , reinsurers continue providing coverage on all risk ceded prior to the termination date, with no new cessions going forward) or cut-off basis ( i.e. , the reinsurance arrangement is completely terminated with NMIC recapturing all previously ceded risk) under certain circumstances. Such selective termination rights arise when, among other reasons, a reinsurer experiences a deterioration in its capital position below a prescribed threshold and/or a reinsurer breaches (and fails to cure) its collateral posting obligations under the relevant agreement. Effective April 1, 2019, NMIC elected to terminate its engagement with one reinsurer under the 2016 QSR Transaction on a cut-off basis. In connection with the termination, NMIC recaptured approximately $500 million of previously ceded primary RIF and stopped ceding new premiums earned or written with respect to the recaptured risk. With the termination, ceded premiums written under the 2016 QSR Transaction decreased from 25% to 20.5% on eligible policies. The termination had no effect on the cession of pool risk under the 2016 QSR Transaction. Effective December 31, 2023, NMIC elected to selectively terminate its engagement with certain reinsurers under the 2020 QSR Transaction and concurrently entered into an amended agreement effective January 1, 2024 (the Amended 2020 QSR Transaction) with the remaining reinsurance participants. Under the Amended 2020 QSR Transaction, NMIC will retain consistent coverage with that provided under the original 2020 QSR Transaction and continue to cede premiums earned related to 21% of the risk on eligible policies written from April 1, 2020 to December 31, 2020. NMIC will receive an enhanced ceding commission under the Amended 2020 QSR Transaction. The Amended 2020 QSR Transaction is scheduled to terminate on December 31, 2030 and NMIC has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of December 31, 2025, or at the end of any calendar quarter thereafter, which could result in NMIC recapturing the related risk. The following table shows amounts related to the QSR Transactions: As of and for the years ended December 31, 2023 2022 2021 (In Thousands) Ceded risk-in-force $ 12,626,541 $ 12,617,169 $ 8,194,604 Ceded premiums earned (167,331) (143,747) (110,140) Ceded claims and claim expenses 7,436 1,620 3,233 Ceding commission earned 39,211 32,314 23,473 Profit commission 90,006 80,714 59,104 Ceded premiums written under the 2016 QSR Transaction are recorded as prepaid reinsurance premiums in "Other Assets" on our consolidated balance sheets and amortized to ceded premiums earned in a manner consistent with the recognition of revenue on direct premiums. Under all other QSR Transactions, premiums are ceded on an earned basis as defined in the agreement. NMIC receives a 20% ceding commission for premiums ceded under the QSR Transactions, except with respect to the 2022 Seasoned QSR Transaction under which it receives a 35% ceding commission and the Amended 2020 QSR Transaction under which it receives a 36% ceding commission. NMIC also receives a profit commission under each of the QSR Transactions, provided that the loss ratios on loans covered under the 2016, 2018, 2020 (2020 Amended), 2021, 2022, 2022 Seasoned and 2023 QSR Transactions, generally remain below 60%, 61%, 50% (50% as amended), 57.5%, 62%, 55% and 62%, respectively, as measured annually. Ceded claims and claim expenses under each of the QSR Transactions reduce the respective profit commission received by NMIC on a dollar-for-dollar basis. In accordance with the terms of the 2016 QSR Transaction, rather than making a cash payment or transferring investments for ceded premiums written, NMIC established a funds withheld liability, which also includes amounts due to NMIC for ceding and profit commissions. Any loss recoveries and any potential profit commission to NMIC will be realized from this account until exhausted. NMIC’s reinsurance recoverable balance is further supported by trust accounts established and maintained by each reinsurer in accordance with the PMIERs funding requirements for risk ceded to non-affiliates. The reinsurance recoverable on loss reserves related to the 2016 QSR Transaction was $1.7 million and $2.6 million as of December 31, 2023 and 2022, respectively. |
Reserve for Insurance Claims an
Reserve for Insurance Claims and Claim Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Insurance [Abstract] | |
Reserves for Insurance Claims and Claim Expenses | Reserves for Insurance Claims and Claim Expenses We hold gross reserves in an amount equal to the estimated liability for insurance claims and claim expenses related to defaults on insured mortgage loans. A loan is considered to be in “default” as of the payment date at which a borrower has missed the preceding two or more consecutive monthly payments. We establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as IBNR reserves. We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees, as well as other general expenses of administering the claim settlement process. As of December 31, 2023, we held gross reserves for insurance claims and claim expenses of $124.0 million. During the year ended December 31, 2023, we paid 199 claims totaling $5.2 million, including 186 claims covered under the QSR Transactions representing $1.0 million of ceded claims and claim expenses. We had 5,099 loans in default in our primary insured portfolio as of December 31, 2023, which represented a 0.81% default rate against 629,690 total policies in-force and 4,449 loans in default in our primary portfolio as of December 31, 2022, which represented a 0.75% default rate against 594,142 total policies in-force. The size of the reserve we establish for each defaulted loan (and by extension our aggregate reserve for claims and claim expenses) reflects our best estimate of the future claim payment to be made for each individual loan in default. Our future claims exposure is a function of the number of defaulted loans that progress to claim payment (which we refer to as frequency) and the amount to be paid to settle such claims (which we refer to as severity). Our estimates of claims frequency and severity are not formulaic, rather they are broadly synthesized based on historical observed experience for similarly situated loans and assumptions about future macroeconomic factors. The following table provides a reconciliation of the beginning and ending gross reserve balances for primary insurance claims and claim expenses (benefits): For the years ended December 31, 2023 2022 2021 (In Thousands) Beginning balance $ 99,836 $ 103,551 $ 90,567 Less reinsurance recoverables (1) (21,587) (20,320) (17,608) Beginning balance, net of reinsurance recoverables 78,249 83,231 72,959 Add claims incurred: Claims and claim expenses (benefits) incurred: Current year (2) 78,285 45,168 23,433 Prior years (3) (56,390) (48,762) (11,128) Total claims and claim expenses (benefits) incurred (4) 21,895 (3,594) 12,305 Less claims paid: Claims and claim expenses paid: Current year (2) 600 74 16 Prior years (3) 3,575 1,314 2,017 Reinsurance terminations (491) — — Total claims and claim expenses paid 3,684 1,388 2,033 Reserve at end of period, net of reinsurance recoverables 96,460 78,249 83,231 Add reinsurance recoverables (1) 27,514 21,587 20,320 Ending balance $ 123,974 $ 99,836 $ 103,551 (1) Related to ceded losses recoverable under the QSR Transactions. See Note 6, “ Reinsurance ” for additional information. (2) Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $70.6 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2023, $39.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2022, and $18.1 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2021. (3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023, $42.5 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2022, and $6.3 million attributed to net case reserves and $5.0 million attributed to net IBNR reserves for the year ended December 31, 2021. (4) Excludes a $0.7 million termination fee for the year ended December 31, 2023 incurred in connection with the amendment of the 2020 QSR Transaction. The “claims incurred” section of the table above shows claims and claim expenses (benefits) incurred on defaults occurring in current and prior years, including IBNR reserves, and is presented net of reinsurance. The amount of claims incurred relating to current year defaults increased during the year ended December 31, 2023, compared to the years ended December 31, 2022 and 2021, primarily due to an increase in the average case reserve established against newly defaulted loans, as well as an increase in the total number of new delinquencies emerging during the period tied to the growth and natural seasoning of our portfolio. Our provision for claims and claim expenses during the years ended December 31, 2023, 2022 and 2021 benefited from favorable development on prior year defaults. We recognized $56.4 million, $48.8 million and $11.1 million of favorable prior year development during the years ended December 31, 2023, 2022 and 2021, respectively, primarily due to cure activity and ongoing analysis of recent loss development trends. We may increase or decrease our claim estimates and reserves as we learn additional information about individual defaulted loans, and continue to observe and analyze loss development trends in our portfolio. Gross reserves of $24.0 million related to prior year defaults remained as of December 31, 2023. The following tables provide claim development data by accident year (or the year in which a default has occurred) and a reconciliation to the reserve for insurance claims and claim expenses. The information about net incurred losses and paid claims development for the years ended prior to 2023 is presented as supplementary information. Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance (1) As of December 31, 2023 Accident Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total of IBNR Defaults (2) Unaudited ($ In Thousands) 2014 $ 83 $ 34 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ — — 2015 699 664 743 764 894 894 894 894 894 — — 2016 2,394 1,568 1,790 1,934 1,936 1,930 1,893 1,986 1 1 2017 6,028 3,475 3,570 3,807 3,716 3,718 3,712 4 2 2018 7,779 5,271 4,709 4,533 4,282 4,312 15 11 2019 14,391 7,229 5,781 4,604 4,606 74 40 2020 65,769 56,154 18,862 7,472 315 164 2021 22,847 14,337 4,092 501 139 2022 44,334 11,023 733 522 2023 76,967 4,694 4,220 Total $ 115,068 $ 6,337 5,099 (1) Amounts include case and IBNR reserves. (2) Number of defaults outstanding as of December 31, 2023. Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance Accident Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Unaudited (In Thousands) 2014 $ — $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 2015 50 246 684 720 804 894 894 894 894 2016 171 890 1,596 1,826 1,827 1,877 1,878 1,978 2017 27 1,655 2,925 3,494 3,640 3,655 3,661 2018 130 1,981 3,537 3,780 3,909 4,116 2019 69 2,368 3,212 3,534 3,621 2020 586 1,320 1,909 3,265 2021 16 274 914 2022 74 1,252 2023 600 Total $ 20,305 Reconciliation of Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses (In Thousands) As of December 31, 2023 Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance $ 115,068 Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance (20,305) All outstanding liabilities before 2014, net of reinsurance — Liabilities for unpaid claims and allocated claims adjustment expenses, net of reinsurance 94,763 Reinsurance recoverable on unpaid claims 27,514 Unallocated claims adjustment expenses 1,697 Total gross liability for unpaid claims and claim adjustment expenses $ 123,974 The following is supplementary information shows the average percentage of claims and allocated claims adjustment expenses paid in the years following the incurrence of a claim as of December 31, 2023: Average annual percentage payout of incurred claims and allocated claims adjustment expenses by age, net of reinsurance (unaudited) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Claims duration disclosure 3% 36% 25% 9% 3% 4% 0% 2 % 0 % 0 % |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic EPS is based on the weighted average number of shares of common stock outstanding. Diluted EPS is based on the weighted average number of shares of common stock outstanding and common stock equivalents that would be issuable upon the vesting of service-based and performance and service-based RSUs, and the exercise of vested and unvested stock options and outstanding warrants. The following table reconciles the net income and the weighted average shares of common stock outstanding used in the computations of basic and diluted EPS of common stock: For the years ended December 31, 2023 2022 2021 (In Thousands, except for per share data) Net income $ 322,110 $ 292,902 $ 231,130 Basic weighted average shares outstanding 82,407 84,921 85,620 Basic earnings per share $ 3.91 $ 3.45 $ 2.70 Net income $ 322,110 $ 292,902 $ 231,130 Gain from change in fair value of warrant liability (1) — (1,113) (566) Diluted net income $ 322,110 $ 291,789 $ 230,564 Basic weighted average shares outstanding 82,407 84,921 85,620 Dilutive effect of issuable shares 1,447 1,078 1,265 Diluted weighted average shares outstanding 83,854 85,999 86,885 Diluted earnings per share $ 3.84 $ 3.39 $ 2.65 Anti-dilutive shares 2 18 3 (1) We issued 992 thousand warrants in connection with a private placement of our common stock in April 2012. The warrants were issued with a ten-year contractual term and all unexercised warrants expired in April 2022. Changes in the fair value of warrants were reported in our consolidated statements of operations and comprehensive income in the period in which such changes occurred. No warrants remained outstanding as of December 31, 2023 or 2022. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-based compensation includes stock options, service-based RSUs and performance and service-based RSUs granted under our 2012 Stock Incentive Plan (2012 Plan) and our Amended and Restated 2014 Omnibus Incentive Plan (2014 Plan, and together with the 2012 Plan, the Stock Plans). The 2012 Plan was approved by the Board on April 16, 2012 and authorized 5.5 million shares of common stock to be reserved for issuance, with limits of 3.85 million shares available for stock option issuance and 1.65 million shares available for RSU issuance. The 2012 Plan expired on April 24, 2022, with all unissued shares of common stock remaining under the 2012 Plan expiring thereafter. Share-based compensation previously issued under the 2012 Plan remains outstanding following the 2012 Plan expiry to the extent non-exercised or non-vested. The 2014 Plan was originally approved by our stockholders at our annual meeting on May 8, 2014 and authorized 4.0 million shares of common stock to be reserved for issuance. On May 11, 2017, our stockholders approved amendments to the 2014 Plan at our annual stockholder meeting, authorizing an additional 2.0 million shares of common stock for issuance, increasing the total shares of common stock reserved for issuance under the plan to 6.0 million with the full amount available to be issued as either RSUs or options. On May 12, 2022, our stockholders approved further amendments to the 2014 Plan, authorizing an additional 2.25 million shares of common stock for issuance, increasing the total shares of common stock reserved for issuance under the plan to 8.25 million with the full amount available to be issued as either RSUs or options. These shares may be either authorized but unissued shares or treasury shares. Options granted under the 2014 Plan are non-qualified stock options and may be granted to employees, directors and other key persons. The exercise price per share for options covered by the 2014 Plan is determined by the Board at the time of grant, but shall not be less than the fair market value of our common stock, defined as the closing price of our common stock, on the date of the grant. The term of the stock option grants is established by the Board, but no stock option shall be exercisable more than ten years after the date the stock option was granted. The vesting period of the stock option grants is also established by the Board at the time of grant and is generally expected to be a three-year period. For the years ended December 31, 2023, 2022 and 2021, we incurred $16.9 million, $15.4 million and $16.7 million, respectively, of expenses related to awards granted under the Stock Plans and we recognized associated gross income tax benefits of $3.6 million, $3.2 million and $3.5 million during each respective period. A summary of option activity during the year ended December 31, 2023 is as follows: For the year ended December 31, 2023 Shares Weighted Average Grant Date Fair Value per Share Weighted Average Exercise Price (Shares in Thousands) Options outstanding at December 31, 2022 1,146 $ 4.93 $ 13.48 Options granted — — — Options exercised (415) 3.74 9.87 Options forfeited — — — Options expired — — — Options outstanding at December 31, 2023 731 $ 5.61 $ 15.53 As of December 31, 2023, there were 0.7 million fully vested and exercisable options. During the year ended December 31, 2023, 0.4 million options were exercised with an aggregate intrinsic value of $8.2 million. The weighted average exercise price for fully vested and exercisable options outstanding as of December 31, 2023 was $15.53 and the weighted average remaining contractual life of such options was 3.81 years as of December 31, 2023. The aggregate intrinsic value of such fully vested and exercisable options was $10.3 million as of December 31, 2023. No stock options were granted during the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023, all outstanding options had vested and no unrecognized compensation cost related to non-vested stock options remained. A summary of RSU activity during the year ended December 31, 2023 is as follows: For the year ended December 31, 2023 Shares Weighted Average Grant Date Fair Value per Share (Shares in Thousands) Non-vested restricted stock units at December 31, 2022 1,190 $ 24.06 Restricted stock units granted 708 22.75 Performance adjustment (1) 48 31.00 Restricted stock units vested (2) (575) 24.68 Restricted stock units forfeited (35) 21.77 Non-vested restricted stock units at December 31, 2023 1,336 $ 23.41 (1) Performance adjustment represents the difference between the number of target shares at grant date and the number of shares vested at settlement, which can range from 0% to 200% of target achievement depending on results over the applicable performance period. (2) Represents amounts vested during the year, including the impact of performance adjustments for service and performance-based RSUs. At December 31, 2023, we had 1.3 million granted and non-vested RSUs with a weighted average remaining contractual life of 1.28 years, consisting of 0.9 million RSUs that are subject to service-based vesting requirements and 0.4 million RSUs that are subject to performance and service-based vesting requirements. The total fair value of RSUs vested during the year ended December 31, 2023 was $14.2 million. As of December 31, 2023, $12.1 million of total unrecognized compensation costs related to non-vested RSUs remained. Total remaining unrecognized compensation costs related to non-vested RSUs outstanding at December 31, 2023 will be recognized on a weighted average basis over 1.27 years. Non-vested RSUs subject to service-based vesting requirements vest over a period ranging from one The grant date fair value of non-vested RSUs is measured as the closing price of our common stock on the date of grant less the present value of anticipated dividends to be paid during the vesting period. 401(k) Savings Plan We offer our employees a 401(k) Savings Plan (401(k) Plan) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code (IRC). Under the 401(k) Plan, we match up to 100% of eligible employees' pre-tax contributions up to 5% of eligible compensation. During the years ended December 31, 2023, 2022 and 2021, we incurred approximately $1.9 million, $2.0 million and $2.0 million of expense related to our matching 401(k) Plan contributions, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are a U.S. taxpayer and are subject to a statutory U.S. federal corporate income tax rate of 21%. NMIH files a consolidated U.S. federal and various state income tax returns on behalf of itself and its subsidiaries. Total income tax expense consists of the following components: For the years ended December 31, 2023 2022 2021 (In Thousands) Current $ — $ 10 $ 85 Deferred 90,593 84,393 65,510 Total income tax expense $ 90,593 $ 84,403 $ 65,595 The following table presents a reconciliation between the federal statutory income tax rate and our effective income tax rate: For the years ended December 31, 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State provision 0.6 0.6 0.5 Share-based and other compensation 0.4 0.5 0.6 Warrant gain — (0.1) — Other — 0.4 — Effective income tax rate 22.0 % 22.4 % 22.1 % The components of our net deferred tax liability are summarized as follows: As of December 31, 2023 2022 Deferred tax asset: (In Thousands) Unrealized loss on investments $ 36,085 $ 53,205 Net operating loss carryforward 8,910 8,898 Share-based compensation 6,026 6,320 Unearned premium reserve 3,957 5,264 Accrued expenses 1,369 1,430 Other 1,190 957 Total gross deferred tax asset 57,537 76,074 Less: valuation allowance (9,169) (8,888) Total deferred tax asset 48,368 67,186 Deferred tax liability: Contingency reserve (331,342) (242,192) Deferred acquisition costs (13,586) (12,653) Capitalized software (2,496) (4,737) Other (2,517) (1,463) Total deferred tax liability (349,941) (261,045) Net deferred income tax (liability) $ (301,573) $ (193,859) As a mortgage guaranty insurance company, we are eligible to claim a tax deduction for our statutory contingency reserve balance, subject to certain limitations outlined under IRC Section 832(e), to the extent we acquire tax and loss bonds in an amount equal to the tax benefit derived from the claimed deduction, which is our intent. During the years ended December 31, 2023, 2022 and 2021, we purchased $80.9 million, $65.2 million and $42.9 million, of tax and loss bonds, respectively. As a result, we had no current federal income tax provision for the years ended December 31, 2023, 2022 and 2021. As of December 31, 2023 and 2022, we held $235.3 million and $154.4 million of tax and loss bonds, respectively, in " Prepaid Federal Income Taxes " on our consolidated balance sheets. At December 31, 2023, we had a federal net operating loss carryforward of $1.2 million which expires in varying amounts in 2030 and 2031, and state net operating loss carryforwards of $136.5 million, which begin to expire in varying amounts in 2031. Section 382 of the IRC imposes annual limitations on a corporation's ability to utilize its net operating loss carryforward if it experiences an "ownership change." As a result of the acquisition of our insurance subsidiaries in 2012, $7.3 million of federal net operating losses were subject to annual limitations of $0.8 million through 2016, $0.5 million in 2017 and $0.3 million, thereafter, through 2028. Our federal net operating loss carryforward arises from this limitation and the constraint on our ability to utilize the net operating loss carryforward in full during the current period. We are required to establish a valuation allowance against our deferred tax assets when it is more likely than not that all or a portion of the asset will not be realized. We assess our need for a valuation allowance on a quarterly basis. In the course of our review, we assess all available evidence, both positive and negative, including our expectations for future sources of income and contractual cash flows, the availability and application of tax planning strategies, and the potential reversal of temporary tax differences. At December 31, 2023 and 2022, we recorded valuation allowances of $9.2 million and $8.9 million, respectively, against state net deferred tax assets. The valuation allowances for both years primarily relate to state net operating losses generated by NMIH, as NMIH operates at a loss and currently only generates revenue from its investment portfolio. As of December 31, 2023 and 2022, we had zero reserves for unrecognized tax benefits as we have taken no material uncertain tax positions that would have required a reserve to be measured and recognized. We file income tax returns with the U.S. federal government and various state jurisdictions that are subject to potential examination by tax authorities. We are not currently under examination by federal or state jurisdictions. Our U.S. federal income tax returns for 2020 and subsequent years, and state income tax returns for 2019 and subsequent years, remain open by statute. |
Software and Equipment
Software and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Software and Equipment | Software and Equipment Software and equipment consist largely of capitalized software developed to support our mortgage insurance operations. Software and equipment, net of accumulated amortization and depreciation, as of December 31, 2023 and 2022, consists of the following: December 31, 2023 December 31, 2022 (In Thousands) Software $ 91,363 $ 83,016 Equipment 11,409 10,731 Leasehold improvements 2,511 2,511 Subtotal 105,283 96,258 Accumulated amortization and depreciation (75,031) (64,328) Software and equipment, net $ 30,252 $ 31,930 Capitalized costs for software, equipment, and leasehold improvements during the years ended December 31, 2023, 2022 and 2021 were $9.9 million, $11.8 million and $13.6 million, respectively. Amortization and depreciation expense for software, equipment, and leasehold improvements for the years ended December 31, 2023, 2022 and 2021 were $11.5 million, $11.9 million and $11.2 million, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets and goodwill consist of identifiable intangible assets and goodwill purchased in connection with the acquisition of our insurance subsidiaries. Intangible assets and goodwill as of both December 31, 2023 and 2022 were as follows: (In Thousands) Expected Lives Goodwill $ 3,244 Indefinite State licenses 260 Indefinite GSE applications 130 Indefinite Total intangible assets and goodwill $ 3,634 We test goodwill and intangible assets for impairment annually or more frequently if we believe indicators of impairment exist. No impairments of indefinite-lived intangibles or goodwill were identified during the years ended December 31, 2023, 2022 and 2021. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases We have two operating lease agreements related to our corporate headquarters and a data center facility for which we recognized operating ROU assets and lease liabilities of $9.1 million and $11.4 million in " Other Assets " and " Other Liabilities ," respectively, on our consolidated balance sheets as of December 31, 2023. As of December 31, 2022, we recognized operating ROU assets and lease liabilities of $10.4 million and $12.1 million, respectively. As of December 31, 2023 and 2022, we did not have any finance leases. In January 2022 we modified the lease for our corporate headquarters, securing a reduction in pricing and incremental leasehold improvement concessions, reducing the square footage of leased space and extending the remaining term through March 2030. In February 2022, we renewed the lease of our data center facility, extending its term through January 2024. Upon the respective modification and extension, the ROU asset and liability associated with each lease was remeasured, using our current estimated incremental borrowing rate, resulting in an aggregate increase to ROU assets and lease liabilities of $9.7 million. We did not enter any new operating leases or recognize any new ROU assets or lease liabilities during the year ended December 31, 2023. The following table provides a summary of our ROU asset and lease liability assumptions as of December 31, 2023: Weighted average remaining lease term 6.2 years Weighted average discount rate 6.50 % Cash paid on our operating leases for the years ended December 31, 2023, 2022 and 2021 was $1.5 million, $0.8 million and $2.6 million and lease expense incurred was $2.0 million, $2.0 million and $2.3 million during each respective period. Future payments due under our existing operating leases as of December 31, 2023 are as follows: Years ending December 31, (In Thousands) 2024 $ 2,080 2025 2,128 2026 2,190 2027 2,256 2028 2,322 2029 and thereafter 2,995 Total undiscounted lease payments 13,971 Less effects of discounting (2,582) Present value of lease payments $ 11,389 Lease expense is recorded in “Underwriting and Operating Expenses” on the consolidated statements of operations and comprehensive income. Our existing leases have original terms that range from two |
Leases | Leases We have two operating lease agreements related to our corporate headquarters and a data center facility for which we recognized operating ROU assets and lease liabilities of $9.1 million and $11.4 million in " Other Assets " and " Other Liabilities ," respectively, on our consolidated balance sheets as of December 31, 2023. As of December 31, 2022, we recognized operating ROU assets and lease liabilities of $10.4 million and $12.1 million, respectively. As of December 31, 2023 and 2022, we did not have any finance leases. In January 2022 we modified the lease for our corporate headquarters, securing a reduction in pricing and incremental leasehold improvement concessions, reducing the square footage of leased space and extending the remaining term through March 2030. In February 2022, we renewed the lease of our data center facility, extending its term through January 2024. Upon the respective modification and extension, the ROU asset and liability associated with each lease was remeasured, using our current estimated incremental borrowing rate, resulting in an aggregate increase to ROU assets and lease liabilities of $9.7 million. We did not enter any new operating leases or recognize any new ROU assets or lease liabilities during the year ended December 31, 2023. The following table provides a summary of our ROU asset and lease liability assumptions as of December 31, 2023: Weighted average remaining lease term 6.2 years Weighted average discount rate 6.50 % Cash paid on our operating leases for the years ended December 31, 2023, 2022 and 2021 was $1.5 million, $0.8 million and $2.6 million and lease expense incurred was $2.0 million, $2.0 million and $2.3 million during each respective period. Future payments due under our existing operating leases as of December 31, 2023 are as follows: Years ending December 31, (In Thousands) 2024 $ 2,080 2025 2,128 2026 2,190 2027 2,256 2028 2,322 2029 and thereafter 2,995 Total undiscounted lease payments 13,971 Less effects of discounting (2,582) Present value of lease payments $ 11,389 Lease expense is recorded in “Underwriting and Operating Expenses” on the consolidated statements of operations and comprehensive income. Our existing leases have original terms that range from two |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies PMIERs As an approved insurer , NMIC is subject to ongoing compliance with the PMIERs established by each of the GSEs ( italicized terms have the same meaning that such terms have in the PMIERs, as described below). The PMIERs establish operational, business, remedial and financial requirements applicable to approved insurers . The PMIERs financial requirements prescribe a risk-based methodology whereby the amount of assets required to be held against each insured loan is determined based on certain loan-level risk characteristics, such as FICO, vintage (year of origination), performing vs. non-performing ( i.e. , current vs. delinquent), LTV ratio and other risk features. In general, higher quality loans carry lower charges. Under the PMIERs, approved insurers must maintain available assets that equal or exceed minimum required assets , which is an amount equal to the greater of (i) $400 million or (ii) a total risk-based required asset amount. The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis against certain risk-based factors derived from tables set out in the PMIERs , which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our ILN Transactions, XOL Transactions and QSR Transactions. The aggregate gross risk-based required asset amount for performing, primary insurance is subject to a floor of 5.6% of performing primary adjusted RIF . By April 15th of each year, NMIC must certify it met all PMIERs requirements as of December 31st of the prior year. We certified to the GSEs by April 15, 2023 that NMIC was in full compliance with the PMIERs as of December 31, 2022. NMIC also has an ongoing obligation to immediately notify the GSEs in writing upon discovery of a failure to meet one or more of the PMIERs requirements. We continuously monitor NMIC's compliance with the PMIERs. Litigation We record a litigation liability when we determine that it is probable a litigation loss will be incurred and the amount of such anticipated loss can be reasonably estimated. In the event we determine that a litigation loss is reasonably possible (though not probable), we disclose an estimate of the possible loss if such estimate can be reasonably established or disclose the matter with no estimate if such estimate cannot be reasonably made. We evaluate litigation and other legal developments that could affect our accrual for probable losses or our estimated disclosure of possible losses and make ongoing adjustments to our accruals and disclosures as appropriate. Significant judgment is required to determine both the likelihood and the estimated amount of potential losses related to such matters. We are currently named as a defendant in a litigation proceeding pertaining to the refund of certain mortgage insurance premiums under the Homeowners Protection Act. The case was dismissed in September 2023 and is currently pending appeal. We do not currently expect that it is reasonably possible that we will incur a material loss in connection with the case and have not recorded a litigation liability for this matter. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Common Stock | Common Stock As of December 31, 2023 and 2022, we had 80.9 million and 83.5 million outstanding shares of Class A common stock, respectively. Holders of our common stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. Each holder of our common stock is entitled to one vote per share on all matters to be voted upon by stockholders, and there are no cumulative voting rights. Holders of common stock are entitled to receive dividends ratably if any are declared. Share repurchase program On February 10, 2022, our Board of Directors authorized a $125 million share repurchase program (excluding associated costs and applicable taxes) effective through December 31, 2023. On July 31, 2023, our Board of Directors authorized a new $200 million share repurchase program (excluding associated costs and applicable taxes) effective through December 31, 2025. Concurrent with the new authorization, our Board of Directors also approved an extension of our existing $125 million share repurchase program through December 31, 2025 to align its remaining tenor with that of the $200 million program. The authorization provides us the flexibility, based on market and business conditions, stock price and other factors, to repurchase stock from time to time through open market purchases, privately negotiated transactions, or other means, including pursuant to Rule 10b5-1 trading plans. During the year ended December 31, 2023, we repurchased 3.5 million shares at an average price of $25.93 per share (excluding associated costs and applicable taxes). During the year ended December 31, 2022, we repurchased 2.9 million shares at an average price of $19.34 per share (excluding associated costs). As of December 31, 2023, we had $176.9 million of repurchase authority remaining. |
Regulatory Information
Regulatory Information | 12 Months Ended |
Dec. 31, 2023 | |
Insurance [Abstract] | |
Regulatory Information | Regulatory Information Statutory Requirements Our insurance subsidiaries, NMIC and Re One, file financial statements in conformity with statutory accounting principles (SAP) prescribed or permitted by the Wisconsin OCI, NMIC's principal regulator. Prescribed SAP includes state laws, regulations and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). The Wisconsin OCI recognizes only statutory accounting practices prescribed or permitted by the state of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under Wisconsin insurance laws. The Wisconsin OCI has imposed a prescribed accounting practice for the treatment of statutory contingency reserves that differs from the treatment promulgated by the NAIC. Under Wisconsin OCI's prescribed practice mortgage guaranty insurers are required to reflect changes in their contingency reserves through statutory income. Such approach contrasts with the NAIC's treatment, which records changes to contingency reserves directly to unassigned funds. As a Wisconsin-domiciled insurer, NMIC's statutory net income reflects an expense associated with the change in its contingency reserve. While such treatment impacts NMIC's statutory net income, it does not have an effect on NMIC's statutory capital position. The following table presents NMIC's statutory net income, statutory surplus, contingency reserve, statutory capital and risk-to-capital (RTC) ratio as of and for the years ended December 31, 2023, 2022 and 2021: As of and for the years ended December 31, 2023 2022 2021 (In Thousands) Statutory net income $ 104,464 $ 107,418 $ 34,975 Statutory surplus 963,085 980,225 893,848 Contingency reserve 1,573,360 1,266,038 1,036,639 Statutory capital (1) $ 2,536,445 $ 2,246,263 $ 1,930,487 Risk-to-capital 11.4:1 11.1:1 11.6:1 (1) Represents the total of the statutory surplus and contingency reserve. Under applicable law in Wisconsin and 15 other states, mortgage insurers must maintain minimum amounts of statutory capital relative to RIF to continue writing new business. While formulations of minimum statutory capital may vary in each state, the most common measure allows for a maximum permitted RTC ratio of 25:1. Wisconsin and certain other states, including California and Illinois, apply a substantially similar requirement referred to as minimum policyholders' position. As of December 31, 2023, NMIC's performing primary RIF, net of reinsurance, was approximately $29.0 billion and its RTC ratio was 11.4:1. As of December 31, 2022, NMIC's performing primary RIF, net of reinsurance, was approximately $25.0 billion and its RTC ratio was 11.1:1. Effective October 1, 2021, the reinsurance agreement between NMIC and Re One was commuted and all ceded risk was transferred back to NMIC. Following the commutation, Re One has no risk in force or further obligation on future claims. Re One recorded a statutory loss of $0.4 million and $58 thousand for the years ended December 31, 2023 and 2022, respectively, and statutory income of $3.0 million for the year ended December 31, 2021. Re One had $2.0 million and $5.6 million of statutory capital at December 31, 2023 and 2022, respectively. Debt Service Allocation The Wisconsin OCI has approved the allocation of interest expense on the $400 million Notes and $250 million 2021 Revolving Credit Facility to NMIC, to the extent proceeds from such offering and facility are distributed to NMIC or used to repay, redeem or otherwise defease amounts raised by NMIC under prior credit arrangements that have previously been distributed to NMIC. Dividend Restrictions NMIH is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. Delaware law provides that dividends are only payable out of a corporation's capital surplus or, subject to certain limitations, recent net profits. NMIC and Re One are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and the GSEs that may restrict their ability to pay dividends to NMIH. Under Wisconsin law, NMIC and Re One may pay dividends up to specified levels ( i.e. , "ordinary" dividends) with 30 days' prior notice to the Wisconsin OCI. Dividends in larger amounts ( i.e .,"extraordinary" dividends), are subject to the Wisconsin OCI's prior approval. Under Wisconsin law, an extraordinary dividend is defined as any payment or distribution that together with other dividends and distributions made within the preceding twelve months exceeds the lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the twelve-month period ending the preceding December 31. During the year ended December 31, 2023, NMIC paid a $98.0 million ordinary course dividend to NMIH. NMIC has the capacity to pay aggregate ordinary dividends of $96.3 million to NMIH during the twelve-month period ending December 31, 2024. As an approved insurer under PMIERs, NMIC would generally be subject to additional restrictions on its ability to pay dividends to NMIH if it failed to meet the financial requirements prescribed by PMIERs. Approved insurers that fail to meet the prescribed PMIERs financial requirements are not permitted to pay dividends without prior approval from the GSEs. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) 2023 Quarters 2023 First Second Third Fourth Year (In Thousands, except per share data) Net premiums earned $ 121,754 $ 125,985 $ 130,089 $ 132,940 $ 510,768 Net investment income 14,894 16,518 17,853 18,247 67,512 Net realized investment losses (33) — — — (33) Other revenues 164 182 217 193 756 Insurance claims and claim expenses 6,701 2,873 4,812 8,232 22,618 Underwriting and operating expenses 25,786 27,448 27,749 29,716 110,699 Service expenses 80 267 239 185 771 Interest expense 8,039 8,048 8,059 8,066 32,212 Income before income taxes 96,173 104,049 107,300 105,181 412,703 Income tax expense 21,715 23,765 23,345 21,768 90,593 Net income $ 74,458 $ 80,284 $ 83,955 $ 83,413 $ 322,110 Basic earnings per share (1) $ 0.89 $ 0.97 $ 1.02 $ 1.03 $ 3.91 Diluted earnings per share (1) $ 0.88 $ 0.95 $ 1.00 $ 1.01 $ 3.84 Weighted average common shares outstanding - basic 83,600 82,958 82,096 81,005 82,407 Weighted average common shares outstanding - diluted 84,840 84,190 83,670 82,685 83,854 (1) Due to the use of weighted average shares outstanding when calculating EPS, the sum of quarterly per share data may not equal the per share data for the year. 2022 Quarters 2022 First Second Third Fourth Year (In Thousands, except per share data) Net premiums earned $ 116,495 $ 120,870 $ 118,317 $ 119,584 $ 475,266 Net investment income 10,199 10,921 11,945 13,341 46,406 Net realized investment gains 408 53 14 6 481 Other revenues 339 376 301 176 1,192 Insurance claims and claim (benefits) expenses (619) (3,036) (3,389) 3,450 (3,594) Underwriting and operating expenses 32,935 30,700 27,144 26,711 117,490 Service expenses 430 336 197 131 1,094 Interest expense 8,041 8,051 8,036 8,035 32,163 Gain from change in fair value of warrant liability (93) (1,020) — — (1,113) Income before income taxes 86,747 97,189 98,589 94,780 377,305 Income tax expense 19,067 21,745 21,751 21,840 84,403 Net income $ 67,680 $ 75,444 $ 76,838 $ 72,940 $ 292,902 Basic earnings per share (1) $ 0.79 $ 0.88 $ 0.91 $ 0.87 $ 3.45 Diluted earnings per share (1) $ 0.77 $ 0.86 $ 0.90 $ 0.86 $ 3.39 Weighted average common shares outstanding - basic 85,953 85,734 84,444 83,592 84,921 Weighted average common shares outstanding - diluted 87,310 86,577 85,485 84,809 85,999 (1) Due to the use of weighted average shares outstanding when calculating EPS, the sum of quarterly per share data may not equal the per share data for the year. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events Quota Share Reinsurance Effective January 1, 2024, NMIC entered into a quota share reinsurance treaty with a broad panel of highly rated reinsurers that will provide coverage for mortgage insurance policies to be written between January 1, 2024 and December 31, 2024 (the 2024 QSR Transaction). Under the terms of the agreement, NMIC will cede premiums earned related to 20% of the risk on eligible policies in exchange for reimbursement of ceded claims and claim expenses on covered policies, a ceding commission equal to 20% and profit commission of up to 56% that varies directly and inversely with ceded claims. Excess-of-Loss Reinsurance Effective January 1, 2024, NMIC entered into a reinsurance agreement with a broad panel of highly rated reinsurers that provides for up to $162.5 million of aggregate excess-of-loss reinsurance coverage for delinquencies that emerge on mortgage insurance policies written between January 1, 2024 and December 31, 2024 (the 2024 XOL Transaction). For the reinsurance coverage period, NMIC will retain a first layer of aggregate losses on covered policies and the reinsurers then provide second layer loss protection up to $162.5 million. NMIC retains losses in excess of the outstanding reinsurance coverage amount. |
SCHEDULE I - SUMMARY OF INVESTM
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended |
Dec. 31, 2023 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Summary of Investments - Other than Investments in Related Parties | December 31, 2023 Amortized Cost Fair Value Amount Reflected on Balance Sheet (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 164,278 $ 166,388 $ 166,388 Municipal debt securities 678,339 621,130 621,130 Corporate debt securities 1,624,187 1,511,479 1,511,479 Asset-backed securities 52,242 48,211 48,211 Total bonds 2,519,046 2,347,208 2,347,208 Short-term investments 23,816 23,813 23,813 Total investments $ 2,542,862 $ 2,371,021 $ 2,371,021 |
SCHEDULE II - FINANCIAL INFORMA
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information Disclosure [Abstract] | |
Financial Information of Registrant - Parent Company Only | December 31, 2023 December 31, 2022 (In Thousands, except for share data) Assets Fixed maturities, available-for-sale, at fair value $ 47,290 $ 83,918 Cash and cash equivalents 66,374 4,940 Investment in subsidiaries, at equity in net assets 2,468,333 2,092,457 Accrued investment income 235 440 Due from affiliates, net 91,126 83,018 Software and equipment, net 30,252 31,930 Other assets 13,858 15,408 Total assets $ 2,717,468 $ 2,312,111 Liabilities Debt $ 397,595 $ 396,051 Accounts payable and accrued expenses 38,524 34,697 Deferred tax liability, net 343,956 255,550 Other liabilities 11,389 12,086 Total liabilities 791,464 698,384 Shareholders' equity Common stock - class A shares, $0.01 par value; 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 and 86,472,742 shares issued and 83,549,879 shares outstanding as of December 31, 2022 (250,000,000 shares authorized) 873 865 Additional paid-in capital 990,816 972,717 Treasury stock, at cost: 6,452,858 and 2,922,863 common shares as of December 31, 2023 and December 31, 2022, respectively (148,921) (56,575) Accumulated other comprehensive loss, net of tax (139,917) (204,323) Retained earnings 1,223,153 901,043 Total shareholders' equity 1,926,004 1,613,727 Total liabilities and shareholders' equity $ 2,717,468 $ 2,312,111 For the years ended December 31, 2023 2022 2021 (In Thousands) Revenues Net investment income $ 3,920 $ 1,204 $ 327 Net realized investment (losses) gains (31) (13) 10 Total revenues 3,889 1,191 337 Expenses Other operating expenses 7,828 7,590 8,264 Interest expense — — 68 Gain from change in fair value of warrant liability — (1,113) (566) Total expenses 7,828 6,477 7,766 Equity in net income of subsidiaries 412,974 378,406 303,970 Income before income taxes 409,035 373,120 296,541 Income tax expense 86,925 80,218 65,411 Net income $ 322,110 $ 292,902 $ 231,130 Other comprehensive income (loss), net of tax: Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $312, $(748), and $(95) for each of the years in the three-year period ended December 31, 2023, respectively 1,173 (2,815) (357) Reclassification adjustment for realized losses (gains) included in net income, net of tax (benefit) expense of $(7), $(3) and $2 for each of the years in the three-year period ended December 31, 2023, respectively 25 10 (8) Equity in other comprehensive income (loss) of subsidiaries 63,208 (203,003) (52,006) Other comprehensive income (loss), net of tax 64,406 (205,808) (52,371) Comprehensive income $ 386,516 $ 87,094 $ 178,759 For the years ended December 31, 2023 2022 2021 Cash flows from operating activities (In Thousands) Net income $ 322,110 $ 292,902 $ 231,130 Adjustments to reconcile net income to net cash provided by operating activities: Gain from change in fair value of warrant liability — (1,113) (566) Net realized investment losses (gains) 31 13 (10) Depreciation and amortization (890) 789 801 Amortization of debt discount and debt issuance costs 1,962 1,846 1,861 Deferred income taxes 88,192 81,057 66,941 Share-based compensation expense 16,914 15,425 16,678 Changes in operating assets and liabilities: Investment in subsidiaries, at equity in net assets (314,556) (343,477) (302,165) Accrued investment income 205 (73) (104) Receivable from affiliates (8,108) 3,348 (9,474) Other assets (57) 518 (496) Accounts payable and accrued expenses 2,605 (8,731) 10,068 Net cash provided by operating activities 108,408 42,504 14,664 Cash flows from investing activities Capitalization of subsidiaries (800) (800) (800) Purchase of short-term investments (89,068) (110,076) (10,640) Purchase of fixed-maturity investments, available-for-sale — — (2,797) Proceeds from maturity of short-term investments 100,607 86,995 — Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale 30,538 19,673 4,464 Software and equipment 2,169 1,291 (1,026) Net cash provided by (used in) investing activities 43,446 (2,917) (10,799) Cash flows from financing activities Proceeds from issuance of common stock related to employee equity plans 10,549 5,442 4,201 Proceeds from issuance of common stock related to warrant exercises — 518 503 Taxes paid related to net share settlement of equity awards (9,356) (5,213) (5,426) Payments of debt issuance costs — — (1,108) Repurchase of common stock (91,613) (56,575) — Net cash used in financing activities (90,420) (55,828) (1,830) Net increase (decrease) in cash, cash equivalents and restricted cash 61,434 (16,241) 2,035 Cash, cash equivalents and restricted cash, beginning of period 4,940 21,181 19,146 Cash, cash equivalents and restricted cash, end of period $ 66,374 $ 4,940 $ 21,181 Note A The NMI Holdings, Inc. (Parent Company) financial statements represent the stand-alone financial statements of the Parent Company. 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. Refer to the Parent Company's consolidated financial statements for additional information. NMIH and its subsidiaries entered into a tax sharing agreement effective August 23, 2012, which was subsequently amended on September 1, 2016. Under original and amended agreements, each of the parties agreed to file consolidated federal income tax returns for all tax years beginning in and subsequent to 2012, with NMIH as the direct tax filer. The tax liability of each subsidiary that is party to the agreement is limited to the amount of the liability it would incur if it filed separate returns. Note B NMIC and Re One are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and the GSEs that may restrict their ability to pay dividends to NMIH. Under Wisconsin law, NMIC and Re One may pay dividends up to specified levels ( i.e ., "ordinary" dividends) with 30 days' prior notice to the Wisconsin OCI. Dividends in larger amounts ( i.e. ,"extraordinary" dividends), are subject to the Wisconsin OCI's prior approval. Under Wisconsin law, an extraordinary dividend is defined as any payment or distribution that together with other dividends and distributions made within the preceding twelve months exceeds the lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the twelve-month period ending the preceding December 31. During the year ended December 31, 2023, NMIC paid a $98.0 million ordinary course dividend to NMIH, representing its full ordinary course dividend capacity payable under Wisconsin law for the twelve-month period ending December 31, 2023. NMIC has the capacity to pay aggregate ordinary dividends of $96.3 million to NMIH during the twelve-month period ending December 31, 2024. The remaining net assets from dividend capacity are considered restricted. As of December 31, 2023, the amount of restricted net assets held by our consolidated insurance subsidiaries, which represents our equity investment in those insurance subsidiaries less their aggregate dividend capacity, totaled $2.5 billion, compared to $2.1 billion as of December 31, 2022. Note C The Parent Company provides certain services to its subsidiaries. The Parent Company allocates to its subsidiaries corporate expense it incurs in the capacity of supporting those subsidiaries, based on either an allocated percentage of time spent or internally allocated capital. Total operating expenses allocated to subsidiaries for each of the years in the three-year period ended December 31, 2023 were $163.9 million, $148.4 million and $149.4 million, respectively. Amounts charged to the subsidiaries for operating expenses are based on actual cost, without any mark-up. The Parent Company considers these charges fair and reasonable. The subsidiaries reimburse the Parent Company for these costs in a timely manner, which has the impact of improving the cash flows of the Parent Company. |
SCHEDULE IV - FINANCIAL INFORMA
SCHEDULE IV - FINANCIAL INFORMATION OF REGISTRANT REINSURANCE | 12 Months Ended |
Dec. 31, 2023 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Financial Information of Registrant Reinsurance | Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net For the years ended December 31, (In Thousands) 2023 $ 650,411 $ 139,643 $ — $ 510,768 — % 2022 594,127 118,861 — 475,266 — 2021 536,630 92,336 — 444,294 — |
Summary of Accounting Princip_2
Summary of Accounting Principles (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the results of NMIH and its wholly-owned subsidiaries. All inter-company transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and our accounts are maintained in U.S. dollars. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities as of the balance sheet date. Estimates also affect the reported amounts of income and expenses for the reporting period. Actual results could differ from those estimates. |
Use of Estimates | Use of Estimates We use accounting principles and methods that conform to GAAP. We are required to apply significant judgment and make material estimates in the preparation of our financial statements and with regard to various accounting, reporting and disclosure matters. Assumptions and estimates are required to apply these principles where actual measurement is not possible or practical. |
Insurance Premium Revenue Recognition | Insurance Premium Revenue Recognition Premiums for primary mortgage insurance policies may be paid in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium), with such election and payment type fixed at policy inception. Premiums written at origination for single premium policies are initially deferred as unearned premiums and amortized into earnings over the estimated policy life, in accordance with the anticipated expiration of risk. Monthly premiums are recognized as revenue in the month billed and when the coverage is effective. Annual premiums are initially deferred and earned on a straight-line basis over the year of coverage. Upon cancellation of a policy, all remaining non-refundable deferred and unearned premium is immediately earned, and any refundable deferred and unearned premium is returned to the policyholder and recorded as a reduction to written premium and unearned premium reserve in the period paid. Premiums written on pool transactions are earned over the period that coverage is provided. Our pool insurance agreement with Fannie Mae expired on August 31, 2023 and we will not recognize any pool premiums written or earned in connection with the agreement in future periods. |
Reserve for Insurance Claims and Claims Expenses | Reserves for Insurance Claims and Claim Expenses We establish reserves for claims based on our best estimate of the ultimate claim costs for defaulted loans using the general principles contained in ASC 944, Financial Services - Insurance (ASC 944). A loan is considered to be in "default" as of the payment date at which a borrower has missed the preceding two or more consecutive monthly payments. We establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as incurred but not reported (IBNR) reserves. We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees, as well as other general expenses of administering the claim settlement process. Claim expense reserves are either allocated ( i.e. , associated with a specific claim) or unallocated ( i.e. , not associated with a specific claim). The establishment of claims and claim expense reserves is subject to inherent uncertainty and requires significant judgment by management. Reserves are established by estimating the number of loans in default that will result in a claim payment, which is referred to as claim frequency, and the amount of claim payment expected to be paid on each such loan in default, which is referred to as claim severity. Claim frequency and severity estimates are established based on historical observed experience regarding certain loan factors, such as age of the default, size of the loan and loan-to-value (LTV) ratios, and are strongly influenced by assumptions about the path of certain economic factors, such as house price appreciation, trends in unemployment and mortgage rates. We consider the appropriateness of such inputs at each fiscal quarter and conduct an actuarial review annually to evaluate and, if necessary, update these assumptions. |
Investments | Investments We have designated our investment portfolio as available-for-sale and report our invested assets at fair value. Unrealized gains and losses in the portfolio, net of related tax expense or benefit, are recognized as a component of accumulated other comprehensive income (AOCI) in shareholders' equity. We measure fair value and classify invested assets in a hierarchy for disclosure purposes consisting of three "levels" based on the observability of inputs available in the marketplace used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). See Note 4, " Fair Value of Financial Instruments " for further discussion. Purchases and sales of investments are recorded on a trade date basis. Net investment income is recognized when earned, and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method, and is net of investment management fees and other investment related expenses. For asset-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to changes in effective yields and prepayment assumptions are recognized on a prospective basis. We recognize an impairment on a security through the consolidated statement of operations and comprehensive income if (i) we intend to sell the impaired security; or (ii) it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis. If a sale is intended or likely to be required, we write down the amortized cost basis of the security to fair value and recognize the full amount of the impairment through the statement of operations as a " Realized Investment Loss ." For securities in an unrealized loss position where a sale is not intended or likely to be required, we further assess if the decline in fair value below amortized cost is driven by a credit related impairment, considering several items including, but not limited to: • the severity of the decline in fair value; • the financial condition of the issuer; • the failure of the issuer to make scheduled interest or principal payments; • recent rating downgrades of the applicable security or issuer by one or more nationally recognized statistical ratings organization; and • other adverse conditions related to or impacting the security or issuer. To the extent we determine that a security impairment is credit-related, an impairment loss is recognized through the statement of operations as a provision for credit loss expense, and presented as a " Realized Investment Loss. " We recognize an allowance for credit losses for the difference between the amortized cost and present value of future expected cash flows, limited by the amount the fair value of the security is below its amortized cost. Subsequent changes (favorable and unfavorable) in credit losses are recognized through the statement of operations as a provision for or a reversal of credit loss expense, and presented as a " Realized Investment Gain or Loss. " The portion of a security impairment attributed to other non-credit related factors is recognized in other comprehensive income, net of taxes. We have elected to present accrued interest receivable separately from available for sale securities on our consolidated balance sheets. Accrued interest receivable was $19.8 million and $14.1 million as of December 31, 2023 and 2022, respectively, and is included in " Accrued Investment Income. " We have elected not to measure an allowance for credit losses for accrued interest receivable on available for sale securities. Accrued interest for available for sale securities is written off against interest income when the receivable has aged 90 days past due. We did not write off any accrued interest receivable during the years ended December 31, 2023, 2022 or 2021. We consider items such as U.S. Treasury Bills and commercial paper with original maturities of 12 months or less to be short-term investments. |
Deferred Policy Acquisition Costs (DAC) | Deferred Policy Acquisition Costs (DAC) |
Premium Deficiency Reserves | Premium Deficiency Reserves |
Reinsurance | Reinsurance We cede insurance risk through the use of reinsurance contracts and follow reinsurance accounting for those transactions where significant risk is transferred. We account for premiums, claims and claim expenses that are ceded to reinsurers on basis consistent with that which we use to account for the original policies we issue and pursuant to the terms of our reinsurance contracts. We account for premiums ceded or otherwise paid to reinsurers as a reduction to premium revenue. NMIC entered into quota share reinsurance treaties effective September 1, 2016 (the 2016 QSR Transaction), January 1, 2018 (the 2018 QSR Transaction), April 1, 2020 (the 2020 QSR Transaction and, as amended January 1, 2024, the Amended 2020 QSR Transaction), January 1, 2021 (the 2021 QSR Transaction), October 1, 2021 (the 2022 QSR Transaction), July 1, 2022 (the 2022 Seasoned QSR Transaction), and January 1, 2023 (the 2023 QSR Transaction), which we refer to collectively as the QSR Transactions. We earn profit and ceding commissions in connection with the QSR Transactions (see Note 6, " Reinsurance "). Profit commissions represent a percentage of the profits recognized by reinsurers that are returned to us, based on the level of claims and claim expenses that we cede. We recognize any profit commissions we earn as a decrease to ceded earned premiums. Ceding commissions are calculated as a percentage of ceded written premiums under the 2016 QSR Transaction and as a percentage of ceded earned premiums under the 2018, 2020 (and Amended 2020), 2021, 2022, 2022 Seasoned and 2023 QSR Transactions, and are intended to cover our costs of acquiring and servicing direct policies. We recognize any ceding commissions generated under the QSR Transactions in a manner consistent with our recognition of earnings on the underlying reinsured policies. We account for ceding commissions earned as a reduction to underwriting and operating expenses. Under the QSR Transactions, we cede a portion of claims and claim expenses and reserves to our reinsurers, and account for such ceded reserves as "Reinsurance Recoverables" on the consolidated balance sheets and such ceded expenses as reductions to claims and claim expenses on the consolidated statements of operations. As of December 31, 2023 and 2022, we had $27.5 million and $21.6 million, respectively, of reinsurance recoverables under the QSR Transactions. We remain directly liable for all claim payments if we are unable to collect the recoverables due from our reinsurers and, as such, we actively monitor and manage our counterparty credit exposure to our reinsurance providers. We establish an allowance for expected credit loss against our reinsurance recoverables if we do not expect to recover amounts due from one or more of our reinsurance counterparties, and report our reinsurance recoverables net of such allowance, if any. We actively monitor the counterparty credit profiles of our reinsurers and each is required to partially collateralize its obligations under the terms of our QSR Transactions. The allowance for credit loss established with respect to our reinsurance recoverables was deemed immaterial as of December 31, 2023 and 2022. |
Variable Interest Entities | Variable Interest Entities NMIC is a party to excess-of-loss reinsurance agreements with Oaktown Re III Ltd., Oaktown Re V Ltd., Oaktown Re VI Ltd., and Oaktown Re VII Ltd. (special purpose reinsurance entities collectively referred to as the Oaktown Re Vehicles) effective July 30, 2019, October 29, 2020, April 27, 2021, and October 26, 2021, respectively. At inception of the respective reinsurance agreements, we determined that each of the Oaktown Re Vehicles was a variable interest entity (VIE), as defined under GAAP Accounting Standards Codification (ASC) 810, because they did not have sufficient equity at risk to finance their respective activities. We evaluated the VIEs at inception to determine whether NMIC was the primary beneficiary under each deal and, if so, whether we were required to consolidate the assets and liabilities of each VIE. The primary beneficiary of a VIE is an enterprise that (1) has the power to direct the activities of the VIE, which most significantly impact its economic performance and (2) has significant economic exposure to the VIE, i.e. , the obligation to absorb losses or receive benefits that could potentially be significant. The determination of whether an entity is the primary beneficiary of a VIE is complex and requires management judgment regarding determinative factors, including the expected results of the VIE and how those results are absorbed by beneficial interest holders, as well as which party has the power to direct activities that most significantly impact the performance of the VIE. We concluded that we are not the primary beneficiary of each VIE and, as such, we do not consolidate them in our consolidated financial statements. |
Income Taxes | Income Taxes We account for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes . The liability method measures the expected future tax effects of temporary differences at the enacted tax rates applicable for the period in which the deferred asset or liability is expected to be realized or settled. Temporary differences are differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements that would result in future increases or decreases in taxes owed on a cash basis compared to amounts already recognized as tax expense in the consolidated statements of operations. We purchase non-interest bearing U.S. Mortgage Guaranty Tax and Loss Bonds issued by the Treasury Department in order to claim a tax deduction for our contingency reserve balance. The tax and loss bonds are carried at cost and are reported as " Prepaid Federal Income Taxes " on the consolidated balance sheets. |
Share-Based Compensation | Share-Based Compensation We account for stock compensation in accordance with ASC 718, Compensation - Stock Compensation , which addresses accounting for share-based awards and recognition of compensation expense, measured using grant date fair value, over the requisite service or performance period of the award. Share-based compensation includes restricted stock units (RSUs) and stock option grants under our stock incentive plans. We calculate the fair value of stock option grants using a Black-Scholes option pricing model, which takes into account various subjective assumptions. Key assumptions used in the model include the expected volatility of our stock price, dividend yield and the risk-free interest rate, as well as the expected option term, giving consideration to the contractual terms of any award. We use the simplified method to estimate expected option term during the period as sufficient historical exercise data is not available. RSU grants may contain a service condition, or performance and service conditions. RSU grants are valued at our stock price on the date of grant less the present value of anticipated dividends, and we recognize their fair value as compensation expense over their requisite service or performance and service periods. We account for stock option and RSU forfeitures as they occur. Share-based compensation is recorded in “Underwriting and Operating Expenses” on the consolidated statements of operations and comprehensive income. |
Earnings Per Share (EPS) | Earnings Per Share (EPS) Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and common share equivalents that would be issuable upon the vesting of existing service-based and certain performance and service-based RSUs, and exercise of vested and unvested stock options and outstanding warrants. Common share equivalents are excluded from EPS computations in the periods in which they have an anti-dilutive effect. Basic EPS is based on the weighted average number of shares of common stock outstanding. Diluted EPS is based on the weighted average number of shares of common stock outstanding and common stock equivalents that would be issuable upon the vesting of service-based and performance and service-based RSUs, and the exercise of vested and unvested stock options and outstanding warrants. |
Share Repurchases | Share Repurchases Common stock repurchases are recorded at cost and presented as “ Treasury Stock |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider items such as U.S. Treasury Bills, certificates of deposit and money market funds with original maturities of 90 days or less to be cash equivalents. |
Software and Equipment | Software and Equipment We capitalize certain costs associated with the development of internal-use software and equipment. Software and equipment are stated at cost, less accumulated amortization and depreciation. Amortization of software and depreciation of equipment commences at the beginning of the month following our placement of the assets into use. Amortization and depreciation are calculated on a straight-line basis over the estimated useful life of the respective assets, typically from three Underwriting and Operating Expenses |
Leases | Leases |
Business Combinations, Goodwill and Intangible Assets | Business Combinations, Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired from a business combination. In accordance with ASC 350, Intangibles – Goodwill and Other , we test goodwill for impairment annually or more frequently if we believe indicators of impairment exist. We have not identified any impairments of goodwill through December 31, 2023. |
Premiums Receivable | Premiums Receivable Premiums receivable consists of premiums due on our mortgage insurance policies. If a mortgage insurance premium is unpaid for more than 120 days, the associated receivable is written off against earned premium and the related insurance policy is canceled. We recognize an allowance for credit losses for premiums receivable based on credit losses expected to arise over the life of the receivable. Due to the nature of our insurance policies (a necessary precondition for access to mortgage credit for covered borrowers) and the short duration of the related receivables, we do not typically experience credit losses against our premium receivables and the allowance for credit loss established on premium receivables was deemed immaterial at December 31, 2023 and 2022. Premiums receivable may be written off prior to 120 days in the ordinary course of business for non-credit events including, but not limited to, the modification or refinancing of an underlying insured loan. We established a $2.7 million and $2.3 million reserve for premium write-offs at December 31, 2023 and 2022, respectively. |
Other Revenues | Other Revenues Other revenues represent underwriting fee revenue from our subsidiary, NMIS, which provides outsourced loan review services to mortgage loan originators. NMIS fees are earned and recognized as services are provided. |
Recent Accounting Pronouncements - Adopted and Not Yet Adopted | Recent Accounting Pronouncements – Adopted In August 2018, the Financial Accounting Standards Board (FASB) issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). The update provides guidance to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The FASB subsequently issued ASU 2019-09 in November 2019 and ASU 2020-11 in November 2020, which amended the effective date for this standard and provided transition relief to facilitate early application for long duration contracts. The standard will now take effect for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. We adopted this ASU on January 1, 2023 and determined it did not have a material impact on our consolidated financial statements as none of our contracts were within scope of the update. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The update provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. Reference rate reform refers to the global transition away from referencing the London Interbank Offered Rate (LIBOR) in financial contracts. Topic 848 includes optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This standard may be elected and applied prospectively over time from March 12, 2020 through December 31, 2022 as reference rate reform activities occur. In December 2022, the FASB issued ASU 2022-06, which extended the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. We adopted Topic 848 on September 30, 2023 and determined it did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements – Not yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The update expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The standard will take effect for all public business entities, including those that have only a single reportable segment for fiscal years beginning after December 15, 2023. We are currently evaluating the impact the adoption of this ASU will have, if any, on our consolidated financial statements. |
Fair Value of Financial Instruments | The following describes the valuation techniques used by us to determine the fair value of our financial instruments: We established a fair value hierarchy by prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this standard are described below: Level 1 – Fair value measurements based on quoted prices in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted price for such instruments. Level 2 – Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 – Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions, which require significant management judgment or estimation about the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assets classified as Level 1 and Level 2 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of fair values and gross unrealized gains and losses | Fair Values and Gross Unrealized Gains and Losses on Investments Amortized Gross Unrealized Fair Gains Losses As of December 31, 2023 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 164,278 $ 3,374 $ (1,264) $ 166,388 Municipal debt securities 678,339 1,253 (58,462) 621,130 Corporate debt securities 1,624,187 7,868 (120,576) 1,511,479 Asset-backed securities 52,242 1 (4,032) 48,211 Total bonds 2,519,046 12,496 (184,334) 2,347,208 Short-term investments 23,816 2 (5) 23,813 Total investments $ 2,542,862 $ 12,498 $ (184,339) $ 2,371,021 Amortized Gross Unrealized Fair Gains Losses As of December 31, 2022 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 82,301 $ — $ (2,369) $ 79,932 Municipal debt securities 563,972 — (80,796) 483,176 Corporate debt securities 1,457,589 1,149 (165,096) 1,293,642 Asset-backed securities 74,762 — (6,204) 68,558 Total bonds 2,178,624 1,149 (254,465) 1,925,308 Short-term investments 174,123 185 (227) 174,081 Total investments $ 2,352,747 $ 1,334 $ (254,692) $ 2,099,389 |
Schedule of investments by industry group | The following table presents a breakdown of the fair value of our corporate debt securities by issuer industry group as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Financial 35 % 38 % Consumer 26 24 Utilities 13 11 Industrial 9 8 Communications 9 11 Technology 8 8 Total 100 % 100 % |
Schedule of investments by maturity | The amortized cost and fair value of available-for-sale securities as of December 31, 2023 and 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed securities provide for periodic payments throughout their lives, they are listed below in a separate category. As of December 31, 2023 Amortized Fair (In Thousands) Due in one year or less $ 191,375 $ 189,729 Due after one through five years 1,237,192 1,162,259 Due after five through ten years 1,050,989 959,633 Due after ten years 11,064 11,189 Asset-backed securities 52,242 48,211 Total investments $ 2,542,862 $ 2,371,021 As of December 31, 2022 Amortized Fair (In Thousands) Due in one year or less $ 271,613 $ 270,428 Due after one through five years 935,615 862,747 Due after five through ten years 1,047,461 875,947 Due after ten years 23,296 21,709 Asset-backed securities 74,762 68,558 Total investments $ 2,352,747 $ 2,099,389 |
Schedule of aging unrealized losses | For those securities in an unrealized loss position, the length of time the securities were in such a position is as follows: Less Than Twelve Months Twelve Months or Greater Total # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses As of December 31, 2023 ($ In Thousands) U.S. Treasury securities and obligations of U.S. government agencies 8 $ 5,022 $ (62) 17 $ 72,003 $ (1,202) 25 $ 77,025 $ (1,264) Municipal debt securities 14 56,280 (502) 217 467,098 (57,960) 231 523,378 (58,462) Corporate debt securities 13 56,039 (705) 266 1,150,662 (119,871) 279 1,206,701 (120,576) Asset-backed securities — — — 23 47,426 (4,032) 23 47,426 (4,032) Short-term investments 1 9,925 (5) — — — 1 9,925 (5) Total 36 $ 127,266 $ (1,274) 523 $ 1,737,189 $ (183,065) 559 $ 1,864,455 $ (184,339) Less Than Twelve Months Twelve Months or Greater Total # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses As of December 31, 2022 ($ In Thousands) U.S. Treasury securities and obligations of U.S. government agencies 19 $ 77,164 $ (2,260) 4 $ 2,768 $ (109) 23 $ 79,932 $ (2,369) Municipal debt securities 57 143,097 (12,942) 181 340,079 (67,854) 238 483,176 (80,796) Corporate debt securities 141 434,174 (19,699) 168 790,537 (145,397) 309 1,224,711 (165,096) Asset-backed securities 12 13,527 (1,097) 14 55,031 (5,107) 26 68,558 (6,204) Short-term investments 12 104,236 (227) — — — 12 104,236 (227) Total 241 $ 772,198 $ (36,225) 367 $ 1,188,415 $ (218,467) 608 $ 1,960,613 $ (254,692) |
Schedule of net investment income | The following table presents the components of net investment income: For the years ended December 31, 2023 2022 2021 (In Thousands) Investment income (1) $ 68,214 $ 47,720 $ 39,385 Investment expenses (702) (1,314) (1,313) Net investment income $ 67,512 $ 46,406 $ 38,072 (1) Includes interest income recognized on cash and cash equivalents of $2.3 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively. Interest income recognized on cash and cash equivalents was de minimis for the year ended December 31, 2021. |
Schedule of net realized investment (losses) gains | The following table presents the components of net realized investment (losses) gains: For the years ended December 31, 2023 2022 2021 (In Thousands) Gross realized investment gains $ — $ 490 $ 729 Gross realized investment losses (33) (9) — Net realized investment (losses) gains $ (33) $ 481 $ 729 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements of financial instruments | The following tables present the level within the fair value hierarchy at which our financial instruments were measured: Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of December 31, 2023 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 166,388 $ — $ — $ 166,388 Municipal debt securities — 621,130 — 621,130 Corporate debt securities — 1,511,479 — 1,511,479 Asset-backed securities — 48,211 — 48,211 Cash, cash equivalents and short-term investments 120,502 — — 120,502 Total assets $ 286,890 $ 2,180,820 $ — $ 2,467,710 Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of December 31, 2022 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 79,932 $ — $ — $ 79,932 Municipal debt securities — 483,176 — 483,176 Corporate debt securities — 1,293,642 — 1,293,642 Asset-backed securities — 68,558 — 68,558 Cash, cash equivalents and short-term investments 218,507 — — 218,507 Total assets $ 298,439 $ 1,845,376 $ — $ 2,143,815 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Reinsurance Disclosures [Abstract] | |
Schedule of effects of reinsurance agreements | The effect of our reinsurance agreements on premiums written and earned is as follows: For the years ended December 31, 2023 2022 2021 (In Thousands) Net premiums written Direct $ 619,670 $ 577,926 $ 557,050 Ceded (1) (139,130) (117,680) (88,539) Net premiums written $ 480,540 $ 460,246 $ 468,511 Net premiums earned Direct $ 650,411 $ 594,127 $ 536,630 Ceded (1) (139,643) (118,861) (92,336) Net premiums earned $ 510,768 $ 475,266 $ 444,294 (1) Net of profit commission. The following table shows amounts related to the QSR Transactions: As of and for the years ended December 31, 2023 2022 2021 (In Thousands) Ceded risk-in-force $ 12,626,541 $ 12,617,169 $ 8,194,604 Ceded premiums earned (167,331) (143,747) (110,140) Ceded claims and claim expenses 7,436 1,620 3,233 Ceding commission earned 39,211 32,314 23,473 Profit commission 90,006 80,714 59,104 |
Schedule of ILN transactions | The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding ILN Transaction. Current amounts are presented as of December 31, 2023. ( $ values in thousands) Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1) 2019 ILN Transaction July 30, 2019 6/1/2018 – 6/30/2019 $326,905 $159,476 $123,424 $121,751 2020-2 ILN Transaction October 29, 2020 4/1/2020 – 9/30/2020 (2) 242,351 55,792 121,777 121,177 2021-1 ILN Transaction April 27, 2021 10/1/2020 – 3/31/2021 (3) 367,238 217,630 163,708 163,394 2021-2 ILN Transaction October 26, 2021 4/1/2021 – 9/30/2021 (4) 363,596 310,567 146,229 145,858 (1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable ILN Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss. (2) Approximately 1% of the production covered by the 2020-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2020. (3) Approximately 1% of the production covered by the 2021-1 ILN Transaction has coverage reporting dates between July 1, 2019 and September 30, 2020. (4) Approximately 2% of the production covered by the 2021-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2021. |
Schedule of XOL transactions | The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding XOL Transaction. Current amounts are presented as of December 31, 2023. ( $ values in thousands) Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1) 2022-1 XOL Transaction April 1, 2022 10/1/2021 – 3/31/2022 (2) $289,741 $253,252 $133,366 $133,123 2022-2 XOL Transaction July 1, 2022 4/1/2022 – 6/30/2022 (3) 154,306 152,347 78,906 78,736 2022-3 XOL Transaction October 1, 2022 7/1/2022 – 9/30/2022 96,779 96,197 106,265 106,265 2023-1 XOL Transaction January 1, 2023 10/1/2022 – 6/30/2023 89,864 88,351 146,513 146,348 2023-2 XOL Transaction (4) July 1, 2023 7/1/2023 – 12/31/2023 71,602 71,602 113,372 113,372 (1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable XOL Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss. (2) Approximately 1% of the production covered by the 2022-1 XOL Transaction has coverage reporting dates between October 21, 2019 and September 30, 2021. (3) Approximately 1% of the production covered by the 2022-2 XOL Transaction has coverage reporting dates between January 4, 2021 and March 31, 2022. (4) The 2023-2 XOL Transaction provides coverage for production generated between July 1, 2023 and December 31, 2023. The current reinsurance coverage and current first layer retained loss will decrease in future periods to the extent the PMIERs minimum required assets of the covered pool declines. |
Reserves for Insurance Claims a
Reserves for Insurance Claims and Claim Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Insurance [Abstract] | |
Schedule of reconciliation of liability for insurance claims and claims expenses (benefits) | The following table provides a reconciliation of the beginning and ending gross reserve balances for primary insurance claims and claim expenses (benefits): For the years ended December 31, 2023 2022 2021 (In Thousands) Beginning balance $ 99,836 $ 103,551 $ 90,567 Less reinsurance recoverables (1) (21,587) (20,320) (17,608) Beginning balance, net of reinsurance recoverables 78,249 83,231 72,959 Add claims incurred: Claims and claim expenses (benefits) incurred: Current year (2) 78,285 45,168 23,433 Prior years (3) (56,390) (48,762) (11,128) Total claims and claim expenses (benefits) incurred (4) 21,895 (3,594) 12,305 Less claims paid: Claims and claim expenses paid: Current year (2) 600 74 16 Prior years (3) 3,575 1,314 2,017 Reinsurance terminations (491) — — Total claims and claim expenses paid 3,684 1,388 2,033 Reserve at end of period, net of reinsurance recoverables 96,460 78,249 83,231 Add reinsurance recoverables (1) 27,514 21,587 20,320 Ending balance $ 123,974 $ 99,836 $ 103,551 (1) Related to ceded losses recoverable under the QSR Transactions. See Note 6, “ Reinsurance ” for additional information. (2) Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $70.6 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2023, $39.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2022, and $18.1 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2021. (3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023, $42.5 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2022, and $6.3 million attributed to net case reserves and $5.0 million attributed to net IBNR reserves for the year ended December 31, 2021. (4) Excludes a $0.7 million termination fee for the year ended December 31, 2023 incurred in connection with the amendment of the 2020 QSR Transaction. |
Schedule of claims development data | The following tables provide claim development data by accident year (or the year in which a default has occurred) and a reconciliation to the reserve for insurance claims and claim expenses. The information about net incurred losses and paid claims development for the years ended prior to 2023 is presented as supplementary information. Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance (1) As of December 31, 2023 Accident Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total of IBNR Defaults (2) Unaudited ($ In Thousands) 2014 $ 83 $ 34 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ — — 2015 699 664 743 764 894 894 894 894 894 — — 2016 2,394 1,568 1,790 1,934 1,936 1,930 1,893 1,986 1 1 2017 6,028 3,475 3,570 3,807 3,716 3,718 3,712 4 2 2018 7,779 5,271 4,709 4,533 4,282 4,312 15 11 2019 14,391 7,229 5,781 4,604 4,606 74 40 2020 65,769 56,154 18,862 7,472 315 164 2021 22,847 14,337 4,092 501 139 2022 44,334 11,023 733 522 2023 76,967 4,694 4,220 Total $ 115,068 $ 6,337 5,099 (1) Amounts include case and IBNR reserves. (2) Number of defaults outstanding as of December 31, 2023. Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance Accident Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Unaudited (In Thousands) 2014 $ — $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 2015 50 246 684 720 804 894 894 894 894 2016 171 890 1,596 1,826 1,827 1,877 1,878 1,978 2017 27 1,655 2,925 3,494 3,640 3,655 3,661 2018 130 1,981 3,537 3,780 3,909 4,116 2019 69 2,368 3,212 3,534 3,621 2020 586 1,320 1,909 3,265 2021 16 274 914 2022 74 1,252 2023 600 Total $ 20,305 |
Schedule of reconciliation of claims development to liability | Reconciliation of Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses (In Thousands) As of December 31, 2023 Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance $ 115,068 Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance (20,305) All outstanding liabilities before 2014, net of reinsurance — Liabilities for unpaid claims and allocated claims adjustment expenses, net of reinsurance 94,763 Reinsurance recoverable on unpaid claims 27,514 Unallocated claims adjustment expenses 1,697 Total gross liability for unpaid claims and claim adjustment expenses $ 123,974 |
Schedule of historical claims duration | The following is supplementary information shows the average percentage of claims and allocated claims adjustment expenses paid in the years following the incurrence of a claim as of December 31, 2023: Average annual percentage payout of incurred claims and allocated claims adjustment expenses by age, net of reinsurance (unaudited) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Claims duration disclosure 3% 36% 25% 9% 3% 4% 0% 2 % 0 % 0 % |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table reconciles the net income and the weighted average shares of common stock outstanding used in the computations of basic and diluted EPS of common stock: For the years ended December 31, 2023 2022 2021 (In Thousands, except for per share data) Net income $ 322,110 $ 292,902 $ 231,130 Basic weighted average shares outstanding 82,407 84,921 85,620 Basic earnings per share $ 3.91 $ 3.45 $ 2.70 Net income $ 322,110 $ 292,902 $ 231,130 Gain from change in fair value of warrant liability (1) — (1,113) (566) Diluted net income $ 322,110 $ 291,789 $ 230,564 Basic weighted average shares outstanding 82,407 84,921 85,620 Dilutive effect of issuable shares 1,447 1,078 1,265 Diluted weighted average shares outstanding 83,854 85,999 86,885 Diluted earnings per share $ 3.84 $ 3.39 $ 2.65 Anti-dilutive shares 2 18 3 (1) We issued 992 thousand warrants in connection with a private placement of our common stock in April 2012. The warrants were issued with a ten-year contractual term and all unexercised warrants expired in April 2022. Changes in the fair value of warrants were reported in our consolidated statements of operations and comprehensive income in the period in which such changes occurred. No warrants remained outstanding as of December 31, 2023 or 2022. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock option activity | A summary of option activity during the year ended December 31, 2023 is as follows: For the year ended December 31, 2023 Shares Weighted Average Grant Date Fair Value per Share Weighted Average Exercise Price (Shares in Thousands) Options outstanding at December 31, 2022 1,146 $ 4.93 $ 13.48 Options granted — — — Options exercised (415) 3.74 9.87 Options forfeited — — — Options expired — — — Options outstanding at December 31, 2023 731 $ 5.61 $ 15.53 |
Schedule of restricted stock units activity | A summary of RSU activity during the year ended December 31, 2023 is as follows: For the year ended December 31, 2023 Shares Weighted Average Grant Date Fair Value per Share (Shares in Thousands) Non-vested restricted stock units at December 31, 2022 1,190 $ 24.06 Restricted stock units granted 708 22.75 Performance adjustment (1) 48 31.00 Restricted stock units vested (2) (575) 24.68 Restricted stock units forfeited (35) 21.77 Non-vested restricted stock units at December 31, 2023 1,336 $ 23.41 (1) Performance adjustment represents the difference between the number of target shares at grant date and the number of shares vested at settlement, which can range from 0% to 200% of target achievement depending on results over the applicable performance period. (2) Represents amounts vested during the year, including the impact of performance adjustments for service and performance-based RSUs. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | Total income tax expense consists of the following components: For the years ended December 31, 2023 2022 2021 (In Thousands) Current $ — $ 10 $ 85 Deferred 90,593 84,393 65,510 Total income tax expense $ 90,593 $ 84,403 $ 65,595 |
Schedule of effective income tax rate reconciliation | The following table presents a reconciliation between the federal statutory income tax rate and our effective income tax rate: For the years ended December 31, 2023 2022 2021 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State provision 0.6 0.6 0.5 Share-based and other compensation 0.4 0.5 0.6 Warrant gain — (0.1) — Other — 0.4 — Effective income tax rate 22.0 % 22.4 % 22.1 % |
Schedule of net deferred tax asset (liability) | The components of our net deferred tax liability are summarized as follows: As of December 31, 2023 2022 Deferred tax asset: (In Thousands) Unrealized loss on investments $ 36,085 $ 53,205 Net operating loss carryforward 8,910 8,898 Share-based compensation 6,026 6,320 Unearned premium reserve 3,957 5,264 Accrued expenses 1,369 1,430 Other 1,190 957 Total gross deferred tax asset 57,537 76,074 Less: valuation allowance (9,169) (8,888) Total deferred tax asset 48,368 67,186 Deferred tax liability: Contingency reserve (331,342) (242,192) Deferred acquisition costs (13,586) (12,653) Capitalized software (2,496) (4,737) Other (2,517) (1,463) Total deferred tax liability (349,941) (261,045) Net deferred income tax (liability) $ (301,573) $ (193,859) |
Software and Equipment (Tables)
Software and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of equipment and software | Software and equipment, net of accumulated amortization and depreciation, as of December 31, 2023 and 2022, consists of the following: December 31, 2023 December 31, 2022 (In Thousands) Software $ 91,363 $ 83,016 Equipment 11,409 10,731 Leasehold improvements 2,511 2,511 Subtotal 105,283 96,258 Accumulated amortization and depreciation (75,031) (64,328) Software and equipment, net $ 30,252 $ 31,930 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of identifiable intangible assets and goodwill | Intangible assets and goodwill consist of identifiable intangible assets and goodwill purchased in connection with the acquisition of our insurance subsidiaries. Intangible assets and goodwill as of both December 31, 2023 and 2022 were as follows: (In Thousands) Expected Lives Goodwill $ 3,244 Indefinite State licenses 260 Indefinite GSE applications 130 Indefinite Total intangible assets and goodwill $ 3,634 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of right-of-use asset and lease liability activity and assumptions | The following table provides a summary of our ROU asset and lease liability assumptions as of December 31, 2023: Weighted average remaining lease term 6.2 years Weighted average discount rate 6.50 % |
Schedule of future payments due under operating leases | Future payments due under our existing operating leases as of December 31, 2023 are as follows: Years ending December 31, (In Thousands) 2024 $ 2,080 2025 2,128 2026 2,190 2027 2,256 2028 2,322 2029 and thereafter 2,995 Total undiscounted lease payments 13,971 Less effects of discounting (2,582) Present value of lease payments $ 11,389 |
Regulatory Information (Tables)
Regulatory Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Insurance [Abstract] | |
Schedule of statutory net income, surplus, contingency reserve and risk-to-capital ratio | The following table presents NMIC's statutory net income, statutory surplus, contingency reserve, statutory capital and risk-to-capital (RTC) ratio as of and for the years ended December 31, 2023, 2022 and 2021: As of and for the years ended December 31, 2023 2022 2021 (In Thousands) Statutory net income $ 104,464 $ 107,418 $ 34,975 Statutory surplus 963,085 980,225 893,848 Contingency reserve 1,573,360 1,266,038 1,036,639 Statutory capital (1) $ 2,536,445 $ 2,246,263 $ 1,930,487 Risk-to-capital 11.4:1 11.1:1 11.6:1 (1) Represents the total of the statutory surplus and contingency reserve. |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | 2023 Quarters 2023 First Second Third Fourth Year (In Thousands, except per share data) Net premiums earned $ 121,754 $ 125,985 $ 130,089 $ 132,940 $ 510,768 Net investment income 14,894 16,518 17,853 18,247 67,512 Net realized investment losses (33) — — — (33) Other revenues 164 182 217 193 756 Insurance claims and claim expenses 6,701 2,873 4,812 8,232 22,618 Underwriting and operating expenses 25,786 27,448 27,749 29,716 110,699 Service expenses 80 267 239 185 771 Interest expense 8,039 8,048 8,059 8,066 32,212 Income before income taxes 96,173 104,049 107,300 105,181 412,703 Income tax expense 21,715 23,765 23,345 21,768 90,593 Net income $ 74,458 $ 80,284 $ 83,955 $ 83,413 $ 322,110 Basic earnings per share (1) $ 0.89 $ 0.97 $ 1.02 $ 1.03 $ 3.91 Diluted earnings per share (1) $ 0.88 $ 0.95 $ 1.00 $ 1.01 $ 3.84 Weighted average common shares outstanding - basic 83,600 82,958 82,096 81,005 82,407 Weighted average common shares outstanding - diluted 84,840 84,190 83,670 82,685 83,854 (1) Due to the use of weighted average shares outstanding when calculating EPS, the sum of quarterly per share data may not equal the per share data for the year. 2022 Quarters 2022 First Second Third Fourth Year (In Thousands, except per share data) Net premiums earned $ 116,495 $ 120,870 $ 118,317 $ 119,584 $ 475,266 Net investment income 10,199 10,921 11,945 13,341 46,406 Net realized investment gains 408 53 14 6 481 Other revenues 339 376 301 176 1,192 Insurance claims and claim (benefits) expenses (619) (3,036) (3,389) 3,450 (3,594) Underwriting and operating expenses 32,935 30,700 27,144 26,711 117,490 Service expenses 430 336 197 131 1,094 Interest expense 8,041 8,051 8,036 8,035 32,163 Gain from change in fair value of warrant liability (93) (1,020) — — (1,113) Income before income taxes 86,747 97,189 98,589 94,780 377,305 Income tax expense 19,067 21,745 21,751 21,840 84,403 Net income $ 67,680 $ 75,444 $ 76,838 $ 72,940 $ 292,902 Basic earnings per share (1) $ 0.79 $ 0.88 $ 0.91 $ 0.87 $ 3.45 Diluted earnings per share (1) $ 0.77 $ 0.86 $ 0.90 $ 0.86 $ 3.39 Weighted average common shares outstanding - basic 85,953 85,734 84,444 83,592 84,921 Weighted average common shares outstanding - diluted 87,310 86,577 85,485 84,809 85,999 (1) Due to the use of weighted average shares outstanding when calculating EPS, the sum of quarterly per share data may not equal the per share data for the year. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | Dec. 31, 2023 state |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which the entity operates | 50 |
Summary of Accounting Princip_3
Summary of Accounting Principles (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accrued interest receivable | $ 19,800,000 | $ 14,100,000 | |
Amortization of deferred acquisition expense | 3,600,000 | 11,900,000 | $ 22,800,000 |
Premium deficiency reserve expense | 0 | 0 | $ 0 |
Reinsurance recoverable | 27,514,000 | 21,587,000 | |
Impairments of goodwill | 0 | ||
Impairment of indefinite-lived intangible assets | $ 0 | ||
Premium receivable, number of days to be written off | 120 days | ||
Premium receivable, write-off reserve | $ 2,700,000 | $ 2,300,000 | |
Software | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 3 years | ||
Software | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 5 years | ||
Equipment | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 3 years | ||
Equipment | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 5 years | ||
Geographic Concentration Risk | Risk-in-Force | CALIFORNIA | |||
Finite-Lived Intangible Assets [Line Items] | |||
Concentration risk | 10% | 11% | 10% |
Investments - Fair Values and G
Investments - Fair Values and Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 2,542,862 | $ 2,352,747 |
Gross Unrealized Gains | 12,498 | 1,334 |
Gross Unrealized Losses | (184,339) | (254,692) |
Fair Value | 2,371,021 | 2,099,389 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 164,278 | 82,301 |
Gross Unrealized Gains | 3,374 | 0 |
Gross Unrealized Losses | (1,264) | (2,369) |
Fair Value | 166,388 | 79,932 |
Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 678,339 | 563,972 |
Gross Unrealized Gains | 1,253 | 0 |
Gross Unrealized Losses | (58,462) | (80,796) |
Fair Value | 621,130 | 483,176 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,624,187 | 1,457,589 |
Gross Unrealized Gains | 7,868 | 1,149 |
Gross Unrealized Losses | (120,576) | (165,096) |
Fair Value | 1,511,479 | 1,293,642 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 52,242 | 74,762 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (4,032) | (6,204) |
Fair Value | 48,211 | 68,558 |
Total bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,519,046 | 2,178,624 |
Gross Unrealized Gains | 12,496 | 1,149 |
Gross Unrealized Losses | (184,334) | (254,465) |
Fair Value | 2,347,208 | 1,925,308 |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,816 | 174,123 |
Gross Unrealized Gains | 2 | 185 |
Gross Unrealized Losses | (5) | (227) |
Fair Value | $ 23,813 | $ 174,081 |
Investments - Corporate Debt Se
Investments - Corporate Debt Securities by Industry Group (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 100% | 100% |
Financial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 35% | 38% |
Consumer | ||
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 26% | 24% |
Utilities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 13% | 11% |
Industrial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 9% | 8% |
Communications | ||
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 9% | 11% |
Technology | ||
Debt Securities, Available-for-sale [Line Items] | ||
Corporate debt securities as component of total (percent) | 8% | 8% |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Unrealized loss position, accumulated loss | $ 184,339 | $ 254,692 |
Unrealized loss position, 12 months or greater | 183,065 | 218,467 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and investments held with various state insurance departments | 5,300 | 5,400 |
Unrealized loss position, accumulated loss | 1,264 | 2,369 |
Unrealized loss position, 12 months or greater | $ 1,202 | $ 109 |
Investments - Scheduled Maturit
Investments - Scheduled Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due in one year or less | $ 191,375 | $ 271,613 |
Due after one through five years | 1,237,192 | 935,615 |
Due after five through ten years | 1,050,989 | 1,047,461 |
Due after ten years | 11,064 | 23,296 |
Asset-backed securities | 52,242 | 74,762 |
Amortized Cost | 2,542,862 | 2,352,747 |
Fair Value | ||
Due in one year or less | 189,729 | 270,428 |
Due after one through five years | 1,162,259 | 862,747 |
Due after five through ten years | 959,633 | 875,947 |
Due after ten years | 11,189 | 21,709 |
Asset-backed securities | 48,211 | 68,558 |
Fair Value | $ 2,371,021 | $ 2,099,389 |
Investments - Aging of Unrealiz
Investments - Aging of Unrealized Losses (Details) $ in Thousands | Dec. 31, 2023 USD ($) security | Dec. 31, 2022 USD ($) security |
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities, less than 12 months | security | 36 | 241 |
Fair value, less than 12 months | $ 127,266 | $ 772,198 |
Unrealized losses, less than 12 months | $ (1,274) | $ (36,225) |
Number of securities,12 months or greater | security | 523 | 367 |
Fair value, 12 months or greater | $ 1,737,189 | $ 1,188,415 |
Unrealized losses, 12 months or greater | $ (183,065) | $ (218,467) |
Number of securities, total | security | 559 | 608 |
Fair Value | $ 1,864,455 | $ 1,960,613 |
Unrealized Losses | $ (184,339) | $ (254,692) |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities, less than 12 months | security | 8 | 19 |
Fair value, less than 12 months | $ 5,022 | $ 77,164 |
Unrealized losses, less than 12 months | $ (62) | $ (2,260) |
Number of securities,12 months or greater | security | 17 | 4 |
Fair value, 12 months or greater | $ 72,003 | $ 2,768 |
Unrealized losses, 12 months or greater | $ (1,202) | $ (109) |
Number of securities, total | security | 25 | 23 |
Fair Value | $ 77,025 | $ 79,932 |
Unrealized Losses | $ (1,264) | $ (2,369) |
Municipal debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities, less than 12 months | security | 14 | 57 |
Fair value, less than 12 months | $ 56,280 | $ 143,097 |
Unrealized losses, less than 12 months | $ (502) | $ (12,942) |
Number of securities,12 months or greater | security | 217 | 181 |
Fair value, 12 months or greater | $ 467,098 | $ 340,079 |
Unrealized losses, 12 months or greater | $ (57,960) | $ (67,854) |
Number of securities, total | security | 231 | 238 |
Fair Value | $ 523,378 | $ 483,176 |
Unrealized Losses | $ (58,462) | $ (80,796) |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities, less than 12 months | security | 13 | 141 |
Fair value, less than 12 months | $ 56,039 | $ 434,174 |
Unrealized losses, less than 12 months | $ (705) | $ (19,699) |
Number of securities,12 months or greater | security | 266 | 168 |
Fair value, 12 months or greater | $ 1,150,662 | $ 790,537 |
Unrealized losses, 12 months or greater | $ (119,871) | $ (145,397) |
Number of securities, total | security | 279 | 309 |
Fair Value | $ 1,206,701 | $ 1,224,711 |
Unrealized Losses | $ (120,576) | $ (165,096) |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities, less than 12 months | security | 0 | 12 |
Fair value, less than 12 months | $ 0 | $ 13,527 |
Unrealized losses, less than 12 months | $ 0 | $ (1,097) |
Number of securities,12 months or greater | security | 23 | 14 |
Fair value, 12 months or greater | $ 47,426 | $ 55,031 |
Unrealized losses, 12 months or greater | $ (4,032) | $ (5,107) |
Number of securities, total | security | 23 | 26 |
Fair Value | $ 47,426 | $ 68,558 |
Unrealized Losses | $ (4,032) | $ (6,204) |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities, less than 12 months | security | 1 | 12 |
Fair value, less than 12 months | $ 9,925 | $ 104,236 |
Unrealized losses, less than 12 months | $ (5) | $ (227) |
Number of securities,12 months or greater | security | 0 | 0 |
Fair value, 12 months or greater | $ 0 | $ 0 |
Unrealized losses, 12 months or greater | $ 0 | $ 0 |
Number of securities, total | security | 1 | 12 |
Fair Value | $ 9,925 | $ 104,236 |
Unrealized Losses | $ (5) | $ (227) |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investment Income, Net [Abstract] | |||
Investment income | $ 68,214 | $ 47,720 | $ 39,385 |
Investment expenses | (702) | (1,314) | (1,313) |
Net investment income | 67,512 | 46,406 | $ 38,072 |
Cash and Cash Equivalents | |||
Investment Income, Net [Abstract] | |||
Investment income | $ 2,300 | $ 400 |
Investments - Net Realized Inve
Investments - Net Realized Investments (Losses) Gains (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross realized investment gains | $ 0 | $ 490 | $ 729 |
Gross realized investment losses | (33) | (9) | 0 |
Net realized investment (losses) gains | $ (33) | $ 481 | $ 729 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 2,371,021 | $ 2,099,389 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 166,388 | 79,932 |
Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 621,130 | 483,176 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 1,511,479 | 1,293,642 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 48,211 | 68,558 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, cash equivalents and short-term investments | 120,502 | 218,507 |
Total assets | 2,467,710 | 2,143,815 |
Recurring | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 166,388 | 79,932 |
Recurring | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 621,130 | 483,176 |
Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 1,511,479 | 1,293,642 |
Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 48,211 | 68,558 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, cash equivalents and short-term investments | 120,502 | 218,507 |
Total assets | 286,890 | 298,439 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 166,388 | 79,932 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, cash equivalents and short-term investments | 0 | 0 |
Total assets | 2,180,820 | 1,845,376 |
Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 621,130 | 483,176 |
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 1,511,479 | 1,293,642 |
Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 48,211 | 68,558 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, cash equivalents and short-term investments | 0 | 0 |
Total assets | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Narrative (Details) - Secured Debt - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 19, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument face amount | $ 400,000,000 | ||
Debt | $ 397,600,000 | $ 396,100,000 | |
Deferred debt issuance costs | 2,400,000 | 3,900,000 | 7,400,000 |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of term loan | $ 401,900,000 | $ 405,900,000 | |
Senior Secured Term Loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument face amount | $ 150,000,000 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Nov. 29, 2021 | Jun. 19, 2020 | Jan. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fees in interest expense | $ 800,000 | $ 800,000 | $ 400,000 | |||
Remaining deferred issuance costs, net of accumulated amortization | 800,000 | 1,200,000 | ||||
2020 Revolving credit facility | Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Deferred debt issuance costs | $ 600,000 | |||||
Credit facility borrowing capacity | 110,000,000 | |||||
2021 Revolving credit facility | Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | 250,000,000 | 250,000,000 | ||||
Borrowings outstanding | $ 0 | 0 | ||||
Commitment fee (in percent) | 0.30% | |||||
Debt Issuance costs | $ 1,100,000 | |||||
Maximum debt-to-total capitalization (in percent) | 35% | |||||
2021 Revolving credit facility | Revolving credit facility | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee (in percent) | 0.225% | |||||
2021 Revolving credit facility | Revolving credit facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee (in percent) | 0.175% | |||||
2021 Revolving credit facility | Revolving credit facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee (in percent) | 0.525% | |||||
2021 Revolving credit facility | Revolving credit facility | Base rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate floor (in percent) | 100% | |||||
2021 Revolving credit facility | Revolving credit facility | Base rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (in percent) | 0.375% | |||||
2021 Revolving credit facility | Revolving credit facility | Base rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (in percent) | 1.875% | |||||
2021 Revolving credit facility | Revolving credit facility | Secured Overnight Finance Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (in percent) | 1.375% | |||||
2021 Revolving credit facility | Revolving credit facility | Secured Overnight Finance Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (in percent) | 2.875% | |||||
Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes | $ 400,000,000 | |||||
Stated interest rate (in percent) | 7.375% | |||||
Applicable premium | 1% | |||||
Deferred debt issuance costs | $ 7,400,000 | $ 2,400,000 | 3,900,000 | |||
Secured Debt | 2018 Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest payable | $ 2,500,000 | $ 2,500,000 | ||||
Secured Debt | Prior to March 1, 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (in percent) | 100% | |||||
Secured Debt | After March 1, 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (in percent) | 100% | |||||
Senior Debt | ||||||
Debt Instrument [Line Items] | ||||||
Effective interest rate (in percent) | 7.825% |
Reinsurance - Effect of Reinsur
Reinsurance - Effect of Reinsurance Agreements on Premiums Written and Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net premiums written | |||||||||||
Direct | $ 619,670 | $ 577,926 | $ 557,050 | ||||||||
Ceded | (139,130) | (117,680) | (88,539) | ||||||||
Net premiums written | 480,540 | 460,246 | 468,511 | ||||||||
Net premiums earned | |||||||||||
Direct | 650,411 | 594,127 | 536,630 | ||||||||
Ceded | (139,643) | (118,861) | (92,336) | ||||||||
Net premiums earned | $ 132,940 | $ 130,089 | $ 125,985 | $ 121,754 | $ 119,584 | $ 118,317 | $ 120,870 | $ 116,495 | $ 510,768 | $ 475,266 | $ 444,294 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) $ in Thousands | 12 Months Ended | ||||||
Jan. 01, 2024 | Apr. 01, 2019 USD ($) reinsurance_engagement | Mar. 31, 2019 | Dec. 31, 2023 USD ($) quota_share_agreement reinsuranceAgreement | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Ceded Credit Risk [Line Items] | |||||||
Optional termination right, percent of reinsurance coverage threshold | 10% | ||||||
Restricted cash | $ 1,338 | $ 2,176 | |||||
Number of excess-of-loss reinsurance agreements | reinsuranceAgreement | 5 | ||||||
Reinsurance coverage amount | $ 31,200 | 13,900 | |||||
Number of quota share reinsurance treaties | quota_share_agreement | 7 | ||||||
Reinsurance recoverable on unpaid claims | $ 27,514 | 21,587 | $ 20,320 | $ 17,608 | |||
Reinsurance Policy, Type [Axis]: Oaktown Re Vehicles | |||||||
Ceded Credit Risk [Line Items] | |||||||
Reinsurance coverage, term of underlying mortgage amortization (in years) | 10 years | ||||||
Reinsurance Policy, Type [Axis]: QSR Transactions | |||||||
Ceded Credit Risk [Line Items] | |||||||
Reinsurance recoverable on unpaid claims | $ 25,800 | 19,000 | |||||
Maximum | |||||||
Ceded Credit Risk [Line Items] | |||||||
Reinsurance coverage, term of underlying mortgage amortization (in years) | 12 years 6 months | ||||||
Minimum | |||||||
Ceded Credit Risk [Line Items] | |||||||
Reinsurance coverage, term of underlying mortgage amortization (in years) | 10 years | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: QSR Transactions | |||||||
Ceded Credit Risk [Line Items] | |||||||
Ceding commissions under QSR Transaction | 20% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Number of reinsurance engagements terminated | reinsurance_engagement | 1 | ||||||
Previously ceded primary risk-in-force recaptured | $ 500,000 | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 60% | ||||||
Reinsurance recoverable on unpaid claims | $ 1,700 | 2,600 | |||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction, Eligible Primary Policies | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 25% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction, Pool Agreement with Fannie Mae | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 100% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2018 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 25% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 61% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2019 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 20% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2020 Amended QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Threshold for loss ratio on loans to qualify for profit commission | 50% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2020 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 21% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 50% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2021 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 22.50% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 57.50% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2022 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 20% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 62% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2022 Seasoned QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 95% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 55% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2023 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 20% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 62% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2024 QSR Transaction | Subsequent Event | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 20% | ||||||
Ceding commissions under QSR Transaction | 20% | ||||||
Threshold for loss ratio on loans to qualify for profit commission | 56% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: Amended 2020 QSR Transaction | Subsequent Event | |||||||
Ceded Credit Risk [Line Items] | |||||||
Premiums of premiums earned under QSR Transaction | 21% | ||||||
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: Oaktown Re Vehicles | |||||||
Ceded Credit Risk [Line Items] | |||||||
Risk premiums paid | $ 31,100 | $ 41,900 | $ 41,300 | ||||
Third-Party Reinsurers | Maximum | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Percent of premiums ceded under QSR Transaction | 25% | ||||||
Third-Party Reinsurers | Maximum | Reinsurance Policy, Type [Axis]: Oaktown Re Vehicles | |||||||
Ceded Credit Risk [Line Items] | |||||||
Anticipated payment related to annual operating expenses | $ 250 | ||||||
Third-Party Reinsurers | Minimum | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Percent of premiums ceded under QSR Transaction | 20.50% | ||||||
Third-Party Reinsurers | Minimum | Reinsurance Policy, Type [Axis]: 2022 Seasoned QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Ceding commissions under QSR Transaction | 35% | ||||||
Third-Party Reinsurers | Minimum | Reinsurance Policy, Type [Axis]: Amended 2020 QSR Transaction | |||||||
Ceded Credit Risk [Line Items] | |||||||
Ceding commissions under QSR Transaction | 36% |
Reinsurance - ILN Transactions
Reinsurance - ILN Transactions And XOL Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Oct. 26, 2021 | Apr. 27, 2021 | Oct. 29, 2020 | Jul. 30, 2019 |
Reinsurance Policy, Type [Axis]: 2019 ILN Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 326,905 | ||||
Current Reinsurance Coverage | $ 159,476 | ||||
Initial First Layer Retained Loss | $ 123,424 | ||||
Current First Layer Retained Loss | 121,751 | ||||
Reinsurance Policy, Type [Axis]: 2020-2 ILN Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 242,351 | ||||
Current Reinsurance Coverage | 55,792 | ||||
Initial First Layer Retained Loss | $ 121,777 | ||||
Current First Layer Retained Loss | $ 121,177 | ||||
Percentage of population with production prior to period start date | 1% | ||||
Reinsurance Policy, Type [Axis]: 2021-1 ILN Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 367,238 | ||||
Current Reinsurance Coverage | $ 217,630 | ||||
Initial First Layer Retained Loss | $ 163,708 | ||||
Current First Layer Retained Loss | $ 163,394 | ||||
Percentage of population with production prior to period start date | 1% | ||||
Reinsurance Policy, Type [Axis]: 2021-2 ILN Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 363,596 | ||||
Current Reinsurance Coverage | $ 310,567 | ||||
Initial First Layer Retained Loss | $ 146,229 | ||||
Current First Layer Retained Loss | $ 145,858 | ||||
Percentage of population with production prior to period start date | 2% | ||||
Reinsurance Policy, Type [Axis]: 2022-1 XOL Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 289,741 | ||||
Current Reinsurance Coverage | 253,252 | ||||
Initial First Layer Retained Loss | 133,366 | ||||
Current First Layer Retained Loss | $ 133,123 | ||||
Percentage of population with production prior to period start date | 1% | ||||
Reinsurance Policy, Type [Axis]: 2022-2 XOL Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 154,306 | ||||
Current Reinsurance Coverage | 152,347 | ||||
Initial First Layer Retained Loss | 78,906 | ||||
Current First Layer Retained Loss | $ 78,736 | ||||
Percentage of population with production prior to period start date | 1% | ||||
Reinsurance Policy, Type [Axis]: 2022-3 XOL Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | $ 96,779 | ||||
Current Reinsurance Coverage | 96,197 | ||||
Initial First Layer Retained Loss | 106,265 | ||||
Current First Layer Retained Loss | 106,265 | ||||
Reinsurance Policy, Type [Axis]: 2023-1 XOL Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | 89,864 | ||||
Current Reinsurance Coverage | 88,351 | ||||
Initial First Layer Retained Loss | 146,513 | ||||
Current First Layer Retained Loss | 146,348 | ||||
Reinsurance Policy, Type [Axis]: 2023-2 XOL Transaction | |||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||||
Initial Reinsurance Coverage | 71,602 | ||||
Current Reinsurance Coverage | 71,602 | ||||
Initial First Layer Retained Loss | 113,372 | ||||
Current First Layer Retained Loss | $ 113,372 |
Reinsurance - Amounts Ceded Rel
Reinsurance - Amounts Ceded Related to QSR Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Ceded Credit Risk [Line Items] | |||
Ceded premiums earned | $ (139,643) | $ (118,861) | $ (92,336) |
Third-Party Reinsurers | |||
Ceded Credit Risk [Line Items] | |||
Ceded risk-in-force | 12,626,541 | 12,617,169 | 8,194,604 |
Ceded premiums earned | (167,331) | (143,747) | (110,140) |
Ceded claims and claim expenses | 7,436 | 1,620 | 3,233 |
Ceding commission earned | 39,211 | 32,314 | 23,473 |
Profit commission | $ 90,006 | $ 80,714 | $ 59,104 |
Reserves for Insurance Claims_2
Reserves for Insurance Claims and Claim Expenses - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) loan claim policy | Dec. 31, 2022 USD ($) loan policy | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Reserve for insurance claims and claim expenses | $ 123,974 | $ 99,836 | $ 103,551 | $ 90,567 |
Number of claims paid | claim | 199 | |||
Claims paid, including amounts covered by insurance | $ 5,200 | |||
Primary loans in default | loan | 5,099 | 4,449 | ||
Default rate (in percent) | 0.81% | 0.75% | ||
Total policies in-force | policy | 629,690 | 594,142 | ||
Favorable development on prior year defaults | $ 56,400 | $ 48,800 | $ 11,100 | |
Reserve for prior year insurance claims and claims expense | $ 24,000 | |||
Reinsurance Policy, Type [Axis]: QSR Transactions | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Number of covered claims included in number of claims paid | claim | 186 | |||
Claims paid QSR transaction | $ 1,000 |
Reserves for Insurance Claims_3
Reserves for Insurance Claims and Claim Expenses - Reconciliation of Reserve Balances for Insurance Claims and Claim Expenses (Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Beginning balance | $ 99,836 | $ 103,551 | $ 90,567 |
Less reinsurance recoverables | (21,587) | (20,320) | (17,608) |
Beginning balance, net of reinsurance recoverables | 78,249 | 83,231 | 72,959 |
Claims and claim expenses (benefits) incurred: | |||
Current year | 78,285 | 45,168 | 23,433 |
Prior years | (56,390) | (48,762) | (11,128) |
Total claims and claim expenses (benefits) incurred | 21,895 | (3,594) | 12,305 |
Claims and claim expenses paid: | |||
Current year | 600 | 74 | 16 |
Prior years | 3,575 | 1,314 | 2,017 |
Reinsurance terminations | (491) | 0 | 0 |
Total claims and claim expenses paid | 3,684 | 1,388 | 2,033 |
Reserve at end of period, net of reinsurance recoverables | 96,460 | 78,249 | 83,231 |
Add reinsurance recoverables | 27,514 | 21,587 | 20,320 |
Ending balance | 123,974 | 99,836 | 103,551 |
Current year case reserves | 70,600 | 39,900 | 18,100 |
Current year IBNR | 6,300 | 4,500 | 4,700 |
Prior year case reserves | 50,900 | 42,500 | 6,300 |
Prior year, IBNR | 4,500 | 4,700 | $ (5,000) |
Reinsurance Policy, Type [Axis]: Amendment 2020 QSR Transaction | |||
Claims and claim expenses (benefits) incurred: | |||
Total claims and claim expenses (benefits) incurred | 700 | ||
Reinsurance Policy, Type [Axis]: QSR Transactions | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | |||
Less reinsurance recoverables | (19,000) | ||
Claims and claim expenses paid: | |||
Add reinsurance recoverables | $ 25,800 | $ 19,000 |
Reserves for Insurance Claims_4
Reserves for Insurance Claims and Claim Expenses - Claim Development by Accident Year and Reconciliation of Reserve for Insurance Claims and Claims Expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) claim | Dec. 31, 2022 USD ($) | 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 ($) | Dec. 31, 2014 USD ($) |
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | $ 115,068 | |||||||||
Financial Guarantee Insurance Product Line | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 115,068 | |||||||||
Total of IBNR | $ 6,337 | |||||||||
Defaults | claim | 5,099 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 20,305 | |||||||||
Financial Guarantee Insurance Product Line | 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 4 | $ 4 | $ 4 | $ 4 | $ 4 | $ 4 | $ 4 | $ 4 | $ 34 | $ 83 |
Total of IBNR | $ 0 | |||||||||
Defaults | claim | 0 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | $ 0 |
Financial Guarantee Insurance Product Line | 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 894 | 894 | 894 | 894 | 894 | 764 | 743 | 664 | 699 | |
Total of IBNR | $ 0 | |||||||||
Defaults | claim | 0 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 894 | 894 | 894 | 894 | 804 | 720 | 684 | 246 | $ 50 | |
Financial Guarantee Insurance Product Line | 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 1,986 | 1,893 | 1,930 | 1,936 | 1,934 | 1,790 | 1,568 | 2,394 | ||
Total of IBNR | $ 1 | |||||||||
Defaults | claim | 1 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 1,978 | 1,878 | 1,877 | 1,827 | 1,826 | 1,596 | 890 | $ 171 | ||
Financial Guarantee Insurance Product Line | 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 3,712 | 3,718 | 3,716 | 3,807 | 3,570 | 3,475 | 6,028 | |||
Total of IBNR | $ 4 | |||||||||
Defaults | claim | 2 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 3,661 | 3,655 | 3,640 | 3,494 | 2,925 | 1,655 | $ 27 | |||
Financial Guarantee Insurance Product Line | 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 4,312 | 4,282 | 4,533 | 4,709 | 5,271 | 7,779 | ||||
Total of IBNR | $ 15 | |||||||||
Defaults | claim | 11 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 4,116 | 3,909 | 3,780 | 3,537 | 1,981 | 130 | ||||
Financial Guarantee Insurance Product Line | 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 4,606 | 4,604 | 5,781 | 7,229 | 14,391 | |||||
Total of IBNR | $ 74 | |||||||||
Defaults | claim | 40 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 3,621 | 3,534 | 3,212 | 2,368 | $ 69 | |||||
Financial Guarantee Insurance Product Line | 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 7,472 | 18,862 | 56,154 | 65,769 | ||||||
Total of IBNR | $ 315 | |||||||||
Defaults | claim | 164 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 3,265 | 1,909 | 1,320 | $ 586 | ||||||
Financial Guarantee Insurance Product Line | 2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 4,092 | 14,337 | 22,847 | |||||||
Total of IBNR | $ 501 | |||||||||
Defaults | claim | 139 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 914 | 274 | $ 16 | |||||||
Financial Guarantee Insurance Product Line | 2022 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 11,023 | 44,334 | ||||||||
Total of IBNR | $ 733 | |||||||||
Defaults | claim | 522 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 1,252 | $ 74 | ||||||||
Financial Guarantee Insurance Product Line | 2023 | ||||||||||
Claims Development [Line Items] | ||||||||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 76,967 | |||||||||
Total of IBNR | $ 4,694 | |||||||||
Defaults | claim | 4,220 | |||||||||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | $ 600 |
Reserves for Insurance Claims_5
Reserves for Insurance Claims and Claim Expenses - Reconciliation of Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claims Adjustment Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | $ 115,068 | |||
Reinsurance recoverable on unpaid claims | 27,514 | $ 21,587 | $ 20,320 | $ 17,608 |
Reserve for insurance claims and claim expenses | 123,974 | $ 99,836 | $ 103,551 | $ 90,567 |
Financial Guarantee Insurance Product Line | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Cumulative Incurred Claims and Allocated Claims Adjustment Expenses, net of Reinsurance | 115,068 | |||
Cumulative Paid Claims and Claims Adjustment Expenses, net of Reinsurance | (20,305) | |||
All outstanding liabilities before 2014, net of reinsurance | 0 | |||
Liabilities for unpaid claims and allocated claims adjustment expenses, net of reinsurance | 94,763 | |||
Reinsurance recoverable on unpaid claims | 27,514 | |||
Unallocated claims adjustment expenses | 1,697 | |||
Reserve for insurance claims and claim expenses | $ 123,974 |
Reserves for Insurance Claims_6
Reserves for Insurance Claims and Claim Expenses - Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Details) - Financial Guarantee Insurance Product Line | Dec. 31, 2023 |
Short-Duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Year 1 | 3% |
Year 2 | 36% |
Year 3 | 25% |
Year 4 | 9% |
Year 5 | 3% |
Year 6 | 4% |
Year 7 | 0% |
Year 8 | 2% |
Year 9 | 0% |
Year 10 | 0% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 30, 2012 | |
Basic EPS | ||||||||||||
Net income | $ 83,413 | $ 83,955 | $ 80,284 | $ 74,458 | $ 72,940 | $ 76,838 | $ 75,444 | $ 67,680 | $ 322,110 | $ 292,902 | $ 231,130 | |
Basic weighted average shares outstanding (in shares) | 81,005,000 | 82,096,000 | 82,958,000 | 83,600,000 | 83,592,000 | 84,444,000 | 85,734,000 | 85,953,000 | 82,407,000 | 84,921,000 | 85,620,000 | |
Basic earnings per share (in dollars per share) | $ 1.03 | $ 1.02 | $ 0.97 | $ 0.89 | $ 0.87 | $ 0.91 | $ 0.88 | $ 0.79 | $ 3.91 | $ 3.45 | $ 2.70 | |
Diluted EPS | ||||||||||||
Net income | $ 83,413 | $ 83,955 | $ 80,284 | $ 74,458 | $ 72,940 | $ 76,838 | $ 75,444 | $ 67,680 | $ 322,110 | $ 292,902 | $ 231,130 | |
Gain from change in fair value of warrant liability | 0 | (1,113) | (566) | |||||||||
Diluted net income | $ 322,110 | $ 291,789 | $ 230,564 | |||||||||
Basic weighted average shares outstanding (in shares) | 81,005,000 | 82,096,000 | 82,958,000 | 83,600,000 | 83,592,000 | 84,444,000 | 85,734,000 | 85,953,000 | 82,407,000 | 84,921,000 | 85,620,000 | |
Dilutive effect of issuable shares (in shares) | 1,447,000 | 1,078,000 | 1,265,000 | |||||||||
Diluted weighted average shares outstanding (in shares) | 82,685,000 | 83,670,000 | 84,190,000 | 84,840,000 | 84,809,000 | 85,485,000 | 86,577,000 | 87,310,000 | 83,854,000 | 85,999,000 | 86,885,000 | |
Diluted earnings per share (in dollars per share) | $ 1.01 | $ 1 | $ 0.95 | $ 0.88 | $ 0.86 | $ 0.90 | $ 0.86 | $ 0.77 | $ 3.84 | $ 3.39 | $ 2.65 | |
Anti-dilutive shares (in shares) | 2,000 | 18,000 | 3,000 | |||||||||
Warrants issued (in shares) | 992,000 | |||||||||||
Warrant liability, expected life (in years) | 10 years | |||||||||||
Class of warrant or right, outstanding (in shares) | 0 | 0 | 0 | 0 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | ||||||
May 12, 2022 | May 11, 2017 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 08, 2014 | Apr. 16, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration period (not more than) | 10 years | ||||||
Share-based awards vesting period (in years) | 3 years | ||||||
Share-based compensation expense | $ 16,914,000 | $ 15,425,000 | $ 16,678,000 | ||||
Income tax benefit related to share-based compensation | $ 3,600,000 | $ 3,200,000 | $ 3,500,000 | ||||
Number of options vested (in shares) | 700,000 | ||||||
Options exercised (in shares) | 415,000 | ||||||
Aggregate intrinsic value of options exercised | $ 8,200,000 | ||||||
Weighted average exercise price for options vested (in dollars per share) | $ 15.53 | ||||||
Weighted average remaining contractual term | 3 years 9 months 21 days | ||||||
Options vested aggregate value | $ 10,300,000 | ||||||
Options granted (in shares) | 0 | 0 | 0 | ||||
Unrecognized compensation cost related to non-vested stock options | $ 0 | ||||||
Employer matching contribution, percent of match (up to) | 100% | ||||||
Employer matching contribution, percent of employees' gross pay (up to) | 5% | ||||||
Contribution amount | $ 1,900,000 | $ 2,000,000 | $ 2,000,000 | ||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock units outstanding (in shares) | 1,336,000 | 1,190,000 | |||||
Weighted average remaining contractual life of RSUs outstanding | 1 year 3 months 10 days | ||||||
Fair value of shares vested | $ 14,200,000 | ||||||
Unrecognized compensation cost related to RSUs | $ 12,100,000 | ||||||
Weighted average remaining contractual life of unvested RSUs | 1 year 3 months 7 days | ||||||
RSUs Subject to Service Based | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock units outstanding (in shares) | 900,000 | ||||||
RSUs Subject to Service Based | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based awards vesting period (in years) | 1 year | ||||||
RSUs Subject to Service Based | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based awards vesting period (in years) | 3 years | ||||||
RSUs Subject to Service and Performance Based | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based awards vesting period (in years) | 3 years | ||||||
Restricted stock units outstanding (in shares) | 400,000 | ||||||
2012 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized to be reserved for issuance (in shares) | 5,500,000 | ||||||
2012 Stock Incentive Plan | Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized to be reserved for issuance (in shares) | 3,850,000 | ||||||
2012 Stock Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized to be reserved for issuance (in shares) | 1,650,000 | ||||||
2014 Omnibus Incentive Plan | Common Class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized to be reserved for issuance (in shares) | 8,250,000 | 6,000,000 | 4,000,000 | ||||
Additional shares authorized (in shares) | 2,250,000 | 2,000,000 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shares | |||
Options beginning balance (in shares) | 1,146,000 | ||
Options granted (in shares) | 0 | 0 | 0 |
Options exercised (in shares) | (415,000) | ||
Options forfeited (in shares) | 0 | ||
Options expired (in shares) | 0 | ||
Options ending balance (in shares) | 731,000 | 1,146,000 | |
Weighted Average Grant Date Fair Value per Share | |||
Options beginning balance (in dollars per share) | $ 4.93 | ||
Options granted (in dollars per share) | 0 | ||
Options exercised (in dollars per share) | 3.74 | ||
Options forfeited (in dollars per share) | 0 | ||
Options expired (in dollars per share) | 0 | ||
Options ending balance (in dollars per share) | 5.61 | $ 4.93 | |
Weighted Average Exercise Price | |||
Options beginning balance (in dollars per share) | 13.48 | ||
Options granted (in dollars per share) | 0 | ||
Options exercised (in dollars per share) | 9.87 | ||
Options forfeited (in dollars per share) | 0 | ||
Options expired (in dollars per share) | 0 | ||
Options beginning balance (in dollars per share) | $ 15.53 | $ 13.48 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Units Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Restricted Stock Units (RSUs) | |
Shares | |
Non-vested restricted stock units, beginning balance (in shares) | shares | 1,190 |
Restricted stock units granted (in shares) | shares | 708 |
Restricted stock units vested (in shares) | shares | (575) |
Restricted stock units forfeited (in shares) | shares | (35) |
Non-vested restricted stock units, ending balance (in shares) | shares | 1,336 |
Weighted Average Grant Date Fair Value per Share | |
Non-vested restricted stock units, beginning balance (in dollars per share) | $ / shares | $ 24.06 |
Restricted stock units granted (in dollars per share) | $ / shares | 22.75 |
Restricted stock units vested (in dollars per share) | $ / shares | 24.68 |
Restricted stock units forfeited (in dollars per share) | $ / shares | 21.77 |
Non-vested restricted stock units, ending balance (in dollars per share) | $ / shares | $ 23.41 |
Performance-Based RSUs (PRSUs) | |
Shares | |
Restricted stock units granted (in shares) | shares | 48 |
Weighted Average Grant Date Fair Value per Share | |
Restricted stock units granted (in dollars per share) | $ / shares | $ 31 |
Performance-Based RSUs (PRSUs) | Minimum | |
Weighted Average Grant Date Fair Value per Share | |
Vesting percentage | 0% |
Performance-Based RSUs (PRSUs) | Maximum | |
Weighted Average Grant Date Fair Value per Share | |
Vesting percentage | 200% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||||||||
Current | $ 0 | $ 10 | $ 85 | ||||||||
Deferred | 90,593 | 84,393 | 65,510 | ||||||||
Total income tax expense | $ 21,768 | $ 23,345 | $ 23,765 | $ 21,715 | $ 21,840 | $ 21,751 | $ 21,745 | $ 19,067 | $ 90,593 | $ 84,403 | $ 65,595 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
State provision | 0.60% | 0.60% | 0.50% |
Share-based and other compensation | 0.40% | 0.50% | 0.60% |
Warrant gain | 0% | (0.10%) | 0% |
Other | 0% | 0.40% | 0% |
Effective income tax rate | 22% | 22.40% | 22.10% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax asset: | ||
Unrealized loss on investments | $ 36,085 | $ 53,205 |
Net operating loss carryforward | 8,910 | 8,898 |
Share-based compensation | 6,026 | 6,320 |
Unearned premium reserve | 3,957 | 5,264 |
Accrued expenses | 1,369 | 1,430 |
Other | 1,190 | 957 |
Total gross deferred tax asset | 57,537 | 76,074 |
Less: valuation allowance | (9,169) | (8,888) |
Total deferred tax asset | 48,368 | 67,186 |
Deferred tax liability: | ||
Contingency reserve | (331,342) | (242,192) |
Deferred acquisition costs | (13,586) | (12,653) |
Capitalized software | (2,496) | (4,737) |
Other | (2,517) | (1,463) |
Total deferred tax liability | (349,941) | (261,045) |
Net deferred income tax (liability) | $ (301,573) | $ (193,859) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | |||||||||||
Purchases of tax and loss Bonds | $ 80,900,000 | $ 65,200,000 | $ 42,900,000 | ||||||||
Income tax expense | $ 21,768,000 | $ 23,345,000 | $ 23,765,000 | $ 21,715,000 | $ 21,840,000 | $ 21,751,000 | $ 21,745,000 | $ 19,067,000 | 90,593,000 | 84,403,000 | 65,595,000 |
Prepaid federal income taxes | 235,286,000 | 154,409,000 | 235,286,000 | 154,409,000 | |||||||
Loss carry forward subject to expiration | 7,300,000 | 7,300,000 | |||||||||
Valuation allowance | 9,169,000 | 8,888,000 | 9,169,000 | 8,888,000 | |||||||
Unrecognized tax benefits reserve | 0 | $ 0 | 0 | 0 | |||||||
Annual Limitation Through 2016 | |||||||||||
Income Tax Contingency [Line Items] | |||||||||||
Loss carry forward subject to expiration | 800,000 | 800,000 | |||||||||
Annual Limitation, 2017 | |||||||||||
Income Tax Contingency [Line Items] | |||||||||||
Loss carry forward subject to expiration | 500,000 | 500,000 | |||||||||
Annual Limitations Through 2028 | |||||||||||
Income Tax Contingency [Line Items] | |||||||||||
Loss carry forward subject to expiration | 300,000 | 300,000 | |||||||||
Domestic Tax Authority | IRS | |||||||||||
Income Tax Contingency [Line Items] | |||||||||||
Income tax expense | 0 | $ 0 | $ 0 | ||||||||
Operating loss carryforward | 1,200,000 | 1,200,000 | |||||||||
State and Local Jurisdiction | |||||||||||
Income Tax Contingency [Line Items] | |||||||||||
Operating loss carryforward | $ 136,500,000 | $ 136,500,000 |
Software and Equipment - Net Ba
Software and Equipment - Net Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 105,283 | $ 96,258 |
Accumulated amortization and depreciation | (75,031) | (64,328) |
Software and equipment, net | 30,252 | 31,930 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | 91,363 | 83,016 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | 11,409 | 10,731 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 2,511 | $ 2,511 |
Software and Equipment - Narrat
Software and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Capitalized costs related to software, equipment, and leaseholds | $ 9.9 | $ 11.8 | $ 13.6 |
Depreciation and amortization | $ 11.5 | $ 11.9 | $ 11.2 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 3,244,000 | $ 3,244,000 | |
Total intangible assets and goodwill | 3,634,000 | 3,634,000 | |
Impairment loss related to intangible assets or goodwill | 0 | 0 | $ 0 |
State licenses | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets | 260,000 | 260,000 | |
GSE applications | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets | $ 130,000 | $ 130,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) operatingLeaseAgreement | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 28, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Number of operating leases related to corporate headquarters and data center facility | operatingLeaseAgreement | 2 | |||
Right-of-use lease assets | $ 9,100 | $ 10,400 | $ 9,700 | |
Operating lease liabilities | $ 11,389 | $ 12,100 | $ 9,700 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets | Other assets | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities | Other liabilities | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,500 | $ 800 | $ 2,600 | |
Operating lease expense | $ 2,000 | $ 2,000 | $ 2,300 | |
Operating lease option to renew, term | 5 years | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease terms | 2 years | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease terms | 8 years |
Leases - Right-of-Use Asset and
Leases - Right-of-Use Asset and Lease Liability Assumptions (Details) | Dec. 31, 2023 |
Leases [Abstract] | |
Weighted average remaining lease term | 6 years 2 months 12 days |
Weighted average discount rate | 6.50% |
Leases - Future Payment Due Und
Leases - Future Payment Due Under Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 |
Leases [Abstract] | |||
2024 | $ 2,080 | ||
2025 | 2,128 | ||
2026 | 2,190 | ||
2027 | 2,256 | ||
2028 | 2,322 | ||
2029 and thereafter | 2,995 | ||
Total undiscounted lease payments | 13,971 | ||
Less effects of discounting | (2,582) | ||
Operating lease liabilities | $ 11,389 | $ 12,100 | $ 9,700 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Approved insurers, required assets (equal or greater than) | $ 400 |
Approved insurers, risked-based required assets, primary insurance floor | 5.60% |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2023 USD ($) vote $ / shares shares | Dec. 31, 2022 $ / shares shares | Jul. 31, 2023 USD ($) | Feb. 10, 2022 USD ($) | |
Class of Stock [Line Items] | ||||
Common stock, outstanding (in shares) | shares | 80,881,280 | 83,549,879 | ||
Number of votes per common share | vote | 1 | |||
Share repurchase program, authorized amount | $ 125,000,000 | |||
Repurchased shares (in shares) | shares | 3,500,000 | 2,900,000 | ||
Shares repurchased, average price per share (in dollar per share) | $ / shares | $ 25.93 | $ 19.34 | ||
Remaining authorized repurchase amount | $ 176,900,000 | |||
July 2023 Share Repurchase Program | ||||
Class of Stock [Line Items] | ||||
Share repurchase program, authorized amount | $ 200,000,000 | |||
2022 Extended Share Repurchase Program | ||||
Class of Stock [Line Items] | ||||
Share repurchase program, authorized amount | $ 125,000,000 |
Regulatory Information - Schedu
Regulatory Information - Schedule of Combined Statutory Net Income, Statutory Surplus, Contingency Reserve and RTC Ratios (Details) - NMIC $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Statutory Accounting Practices [Line Items] | |||
Statutory net income | $ 104,464 | $ 107,418 | $ 34,975 |
Statutory surplus | 963,085 | 980,225 | 893,848 |
Contingency reserve | 1,573,360 | 1,266,038 | 1,036,639 |
Statutory capital | $ 2,536,445 | $ 2,246,263 | $ 1,930,487 |
Risk-to-capital | 11.4 | 11.1 | 11.6 |
Regulatory Information - Narrat
Regulatory Information - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2023 USD ($) state | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 29, 2021 USD ($) | |
Statutory Accounting Practices [Line Items] | ||||
Number of states, in addition to wisconsin, with minimum statutory capital relative to RIF requirement | state | 15 | |||
Maximum permitted RTC ratio | 25 | |||
Statutory net income (loss) | $ (400,000) | $ (58,000) | $ 3,000,000 | |
Dividends, restriction with regards to capital surplus | 10% | |||
Revolving credit facility | 2021 Revolving credit facility | ||||
Statutory Accounting Practices [Line Items] | ||||
Credit facility borrowing capacity | $ 250,000,000 | $ 250,000,000 | ||
Senior Debt | ||||
Statutory Accounting Practices [Line Items] | ||||
Debt instrument face amount | 400,000,000 | |||
NMIC | ||||
Statutory Accounting Practices [Line Items] | ||||
Mortgage insurance risk in force | $ 29,000,000,000 | $ 25,000,000,000 | ||
Risk-to-capital | 11.4 | 11.1 | 11.6 | |
Statutory capital | $ 2,536,445,000 | $ 2,246,263,000 | $ 1,930,487,000 | |
NMIC and Re One Combined | ||||
Statutory Accounting Practices [Line Items] | ||||
Ordinary course dividend paid | 98,000,000 | |||
Dividends, restriction with regards to capital surplus | 96,300,000 | |||
Re One | ||||
Statutory Accounting Practices [Line Items] | ||||
Statutory capital | $ 2,000,000 | $ 5,600,000 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net premiums earned | $ 132,940 | $ 130,089 | $ 125,985 | $ 121,754 | $ 119,584 | $ 118,317 | $ 120,870 | $ 116,495 | $ 510,768 | $ 475,266 | $ 444,294 |
Net investment income | 18,247 | 17,853 | 16,518 | 14,894 | 13,341 | 11,945 | 10,921 | 10,199 | 67,512 | 46,406 | 38,072 |
Net realized investment (losses) gains | 0 | 0 | 0 | (33) | 6 | 14 | 53 | 408 | (33) | 481 | 729 |
Other revenues | 193 | 217 | 182 | 164 | 176 | 301 | 376 | 339 | 756 | 1,192 | 1,977 |
Insurance claims and claim (benefits) expenses | 8,232 | 4,812 | 2,873 | 6,701 | 3,450 | (3,389) | (3,036) | (619) | 22,618 | (3,594) | |
Underwriting and operating expenses | 29,716 | 27,749 | 27,448 | 25,786 | 26,711 | 27,144 | 30,700 | 32,935 | 110,699 | 117,490 | 142,303 |
Service expenses | 185 | 239 | 267 | 80 | 131 | 197 | 336 | 430 | 771 | 1,094 | 2,509 |
Interest expense | 8,066 | 8,059 | 8,048 | 8,039 | 8,035 | 8,036 | 8,051 | 8,041 | 32,212 | 32,163 | 31,796 |
Gain from change in fair value of warrant liability | 0 | 0 | (1,020) | (93) | 0 | (1,113) | (566) | ||||
Income before income taxes | 105,181 | 107,300 | 104,049 | 96,173 | 94,780 | 98,589 | 97,189 | 86,747 | 412,703 | 377,305 | 296,725 |
Income tax expense | 21,768 | 23,345 | 23,765 | 21,715 | 21,840 | 21,751 | 21,745 | 19,067 | 90,593 | 84,403 | 65,595 |
Net income | $ 83,413 | $ 83,955 | $ 80,284 | $ 74,458 | $ 72,940 | $ 76,838 | $ 75,444 | $ 67,680 | $ 322,110 | $ 292,902 | $ 231,130 |
Income per share | |||||||||||
Basic earnings per share (in dollars per share) | $ 1.03 | $ 1.02 | $ 0.97 | $ 0.89 | $ 0.87 | $ 0.91 | $ 0.88 | $ 0.79 | $ 3.91 | $ 3.45 | $ 2.70 |
Diluted earnings per share (in dollars per share) | $ 1.01 | $ 1 | $ 0.95 | $ 0.88 | $ 0.86 | $ 0.90 | $ 0.86 | $ 0.77 | $ 3.84 | $ 3.39 | $ 2.65 |
Weighted average common shares outstanding - basic (in shares) | 81,005 | 82,096 | 82,958 | 83,600 | 83,592 | 84,444 | 85,734 | 85,953 | 82,407 | 84,921 | 85,620 |
Weighted average common shares outstanding - diluted (in shares) | 82,685 | 83,670 | 84,190 | 84,840 | 84,809 | 85,485 | 86,577 | 87,310 | 83,854 | 85,999 | 86,885 |
Subsequent events (Details)
Subsequent events (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Dec. 31, 2023 | |
Reinsurance Policy, Type [Axis]: 2019 ILN Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | $ 121,751 | |
Reinsurance Policy, Type [Axis]: 2020-2 ILN Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 121,177 | |
Reinsurance Policy, Type [Axis]: 2021-1 ILN Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 163,394 | |
Reinsurance Policy, Type [Axis]: 2021-2 ILN Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 145,858 | |
Reinsurance Policy, Type [Axis]: 2022-1 XOL Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 133,123 | |
Reinsurance Policy, Type [Axis]: 2022-2 XOL Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 78,736 | |
Reinsurance Policy, Type [Axis]: 2022-3 XOL Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 106,265 | |
Reinsurance Policy, Type [Axis]: 2023-1 XOL Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 146,348 | |
Reinsurance Policy, Type [Axis]: 2023-2 XOL Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | $ 113,372 | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: QSR Transactions | ||
Subsequent Event [Line Items] | ||
Ceding commissions under QSR Transaction | 20% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Threshold for loss ratio on loans to qualify for profit commission | 60% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction, Eligible Primary Policies | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 25% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2016 QSR Transaction, Pool Agreement with Fannie Mae | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 100% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2018 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 25% | |
Threshold for loss ratio on loans to qualify for profit commission | 61% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2019 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 20% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2020 Amended QSR Transaction | ||
Subsequent Event [Line Items] | ||
Threshold for loss ratio on loans to qualify for profit commission | 50% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2020 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 21% | |
Threshold for loss ratio on loans to qualify for profit commission | 50% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2021 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 22.50% | |
Threshold for loss ratio on loans to qualify for profit commission | 57.50% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2022 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 20% | |
Threshold for loss ratio on loans to qualify for profit commission | 62% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2022 Seasoned QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 95% | |
Threshold for loss ratio on loans to qualify for profit commission | 55% | |
Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2023 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 20% | |
Threshold for loss ratio on loans to qualify for profit commission | 62% | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Aggregate excess-of-loss reinsurance coverage | $ 162,500 | |
Subsequent Event | Reinsurance Policy, Type [Axis]: 2024 XOL Transaction | ||
Subsequent Event [Line Items] | ||
Current first layer retained loss | 162,500 | |
Current second layer retained loss | $ 162,500 | |
Subsequent Event | Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: 2024 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 20% | |
Ceding commissions under QSR Transaction | 20% | |
Threshold for loss ratio on loans to qualify for profit commission | 56% | |
Subsequent Event | Third-Party Reinsurers | Reinsurance Policy, Type [Axis]: Amended 2020 QSR Transaction | ||
Subsequent Event [Line Items] | ||
Premiums of premiums earned under QSR Transaction | 21% |
SCHEDULE I - SUMMARY OF INVES_2
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | $ 2,542,862 | |
Fair Value | 2,371,021 | |
Amount Reflected on Balance Sheet | 2,371,021 | $ 2,099,389 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | 164,278 | |
Fair Value | 166,388 | |
Amount Reflected on Balance Sheet | 166,388 | 79,932 |
Municipal debt securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | 678,339 | |
Fair Value | 621,130 | |
Amount Reflected on Balance Sheet | 621,130 | 483,176 |
Corporate debt securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | 1,624,187 | |
Fair Value | 1,511,479 | |
Amount Reflected on Balance Sheet | 1,511,479 | 1,293,642 |
Asset-backed securities | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | 52,242 | |
Fair Value | 48,211 | |
Amount Reflected on Balance Sheet | 48,211 | 68,558 |
Total bonds | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | 2,519,046 | |
Fair Value | 2,347,208 | |
Amount Reflected on Balance Sheet | 2,347,208 | 1,925,308 |
Short-term investments | ||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||
Amortized Cost | 23,816 | |
Fair Value | 23,813 | |
Amount Reflected on Balance Sheet | $ 23,813 | $ 174,081 |
SCHEDULE II - FINANCIAL INFOR_2
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Balance Sheets - Parent Company Only (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||||
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,542,862 and $2,352,747 as of December 31, 2023 and December 31, 2022, respectively) | $ 2,371,021 | $ 2,099,389 | ||
Cash and cash equivalents | 96,689 | 44,426 | $ 76,646 | $ 126,937 |
Accrued investment income | 19,785 | 14,144 | ||
Software and equipment, net | 30,252 | 31,930 | ||
Other assets | 16,965 | 18,267 | ||
Total assets | 2,940,507 | 2,516,030 | ||
Liabilities | ||||
Debt | 397,595 | 396,051 | ||
Accounts payable and accrued expenses | 86,189 | 74,576 | ||
Deferred tax liability, net | 301,573 | 193,859 | ||
Other liabilities | 11,456 | 12,272 | ||
Total liabilities | 1,014,503 | 902,303 | ||
Shareholders' equity | ||||
Common stock - class A shares, $0.01 par value; 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 and 86,472,742 shares issued and 83,549,879 shares outstanding as of December 31, 2022 (250,000,000 shares authorized) | 873 | 865 | ||
Additional paid-in capital | 990,816 | 972,717 | ||
Treasury stock, at cost: 6,452,858 and 2,922,863 common shares as of December 31, 2023 and December 31, 2022, respectively | (148,921) | (56,575) | ||
Accumulated other comprehensive loss, net of tax | (139,917) | (204,323) | ||
Retained earnings | 1,223,153 | 901,043 | ||
Total shareholders' equity | 1,926,004 | 1,613,727 | 1,565,786 | 1,369,591 |
Total liabilities and shareholders' equity | 2,940,507 | 2,516,030 | ||
Parent | ||||
Assets | ||||
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,542,862 and $2,352,747 as of December 31, 2023 and December 31, 2022, respectively) | 47,290 | 83,918 | ||
Cash and cash equivalents | 66,374 | 4,940 | $ 21,181 | $ 19,146 |
Investment in subsidiaries, at equity in net assets | 2,468,333 | 2,092,457 | ||
Accrued investment income | 235 | 440 | ||
Due from affiliates, net | 91,126 | 83,018 | ||
Software and equipment, net | 30,252 | 31,930 | ||
Other assets | 13,858 | 15,408 | ||
Total assets | 2,717,468 | 2,312,111 | ||
Liabilities | ||||
Debt | 397,595 | 396,051 | ||
Accounts payable and accrued expenses | 38,524 | 34,697 | ||
Deferred tax liability, net | 343,956 | 255,550 | ||
Other liabilities | 11,389 | 12,086 | ||
Total liabilities | 791,464 | 698,384 | ||
Shareholders' equity | ||||
Common stock - class A shares, $0.01 par value; 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 and 86,472,742 shares issued and 83,549,879 shares outstanding as of December 31, 2022 (250,000,000 shares authorized) | 873 | 865 | ||
Additional paid-in capital | 990,816 | 972,717 | ||
Treasury stock, at cost: 6,452,858 and 2,922,863 common shares as of December 31, 2023 and December 31, 2022, respectively | (148,921) | (56,575) | ||
Accumulated other comprehensive loss, net of tax | (139,917) | (204,323) | ||
Retained earnings | 1,223,153 | 901,043 | ||
Total shareholders' equity | 1,926,004 | 1,613,727 | ||
Total liabilities and shareholders' equity | $ 2,717,468 | $ 2,312,111 |
SCHEDULE II - FINANCIAL INFOR_3
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Balance Sheets Additional Information - Parent Company Only (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued (in shares) | 87,334,138 | 86,472,742 |
Common stock, outstanding (in shares) | 80,881,280 | 83,549,879 |
Common stock, authorized (in shares) | 250,000,000 | 250,000,000 |
Treasury stock, common shares (in shares) | 6,452,858 | 2,922,863 |
SCHEDULE II - FINANCIAL INFOR_4
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Statement of Operations - Parent Company Only (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | |||||||||||
Net investment income | $ 18,247 | $ 17,853 | $ 16,518 | $ 14,894 | $ 13,341 | $ 11,945 | $ 10,921 | $ 10,199 | $ 67,512 | $ 46,406 | $ 38,072 |
Net realized investment (losses) gains | 0 | 0 | 0 | (33) | 6 | 14 | 53 | 408 | (33) | 481 | 729 |
Total revenues | 579,003 | 523,345 | 485,072 | ||||||||
Expenses | |||||||||||
Interest expense | 8,066 | 8,059 | 8,048 | 8,039 | 8,035 | 8,036 | 8,051 | 8,041 | 32,212 | 32,163 | 31,796 |
Gain from change in fair value of warrant liability | 0 | 0 | (1,020) | (93) | 0 | (1,113) | (566) | ||||
Total expenses | 166,300 | 146,040 | 188,347 | ||||||||
Income before income taxes | 105,181 | 107,300 | 104,049 | 96,173 | 94,780 | 98,589 | 97,189 | 86,747 | 412,703 | 377,305 | 296,725 |
Income tax expense | 21,768 | 23,345 | 23,765 | 21,715 | 21,840 | 21,751 | 21,745 | 19,067 | 90,593 | 84,403 | 65,595 |
Net income | $ 83,413 | $ 83,955 | $ 80,284 | $ 74,458 | $ 72,940 | $ 76,838 | $ 75,444 | $ 67,680 | 322,110 | 292,902 | 231,130 |
Other comprehensive income (loss), net of tax: | |||||||||||
Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $312, $(748), and $(95) for each of the years in the three-year period ended December 31, 2023, respectively | 64,380 | (205,428) | (51,795) | ||||||||
Reclassification adjustment for realized losses (gains) included in net income, net of tax (benefit) expense of $(7), $(3) and $2 for each of the years in the three-year period ended December 31, 2023, respectively | 26 | (380) | (576) | ||||||||
Other comprehensive income (loss), net of tax | 64,406 | (205,808) | (52,371) | ||||||||
Comprehensive income | 386,516 | 87,094 | 178,759 | ||||||||
Parent | |||||||||||
Revenues | |||||||||||
Net investment income | 3,920 | 1,204 | 327 | ||||||||
Net realized investment (losses) gains | (31) | (13) | 10 | ||||||||
Total revenues | 3,889 | 1,191 | 337 | ||||||||
Expenses | |||||||||||
Other operating expenses | 7,828 | 7,590 | 8,264 | ||||||||
Interest expense | 0 | 0 | 68 | ||||||||
Gain from change in fair value of warrant liability | 0 | (1,113) | (566) | ||||||||
Total expenses | 7,828 | 6,477 | 7,766 | ||||||||
Equity in net income of subsidiaries | 412,974 | 378,406 | 303,970 | ||||||||
Income before income taxes | 409,035 | 373,120 | 296,541 | ||||||||
Income tax expense | 86,925 | 80,218 | 65,411 | ||||||||
Net income | 322,110 | 292,902 | 231,130 | ||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $312, $(748), and $(95) for each of the years in the three-year period ended December 31, 2023, respectively | 1,173 | (2,815) | (357) | ||||||||
Reclassification adjustment for realized losses (gains) included in net income, net of tax (benefit) expense of $(7), $(3) and $2 for each of the years in the three-year period ended December 31, 2023, respectively | 25 | 10 | (8) | ||||||||
Equity in other comprehensive income (loss) of subsidiaries | 63,208 | (203,003) | (52,006) | ||||||||
Other comprehensive income (loss), net of tax | 64,406 | (205,808) | (52,371) | ||||||||
Comprehensive income | $ 386,516 | $ 87,094 | $ 178,759 |
SCHEDULE II - FINANCIAL INFOR_5
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Statement of Operations Additional Information - Parent Company Only (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Income Statements, Captions [Line Items] | |||
Unrealized gains (losses) in accumulated other comprehensive income, tax expense (benefit) | $ 17,113 | $ (54,608) | $ (13,768) |
Reclassification adjustment for realized losses (gains) included in net income, tax (benefit) expense | (7) | 101 | 153 |
Parent | |||
Condensed Income Statements, Captions [Line Items] | |||
Unrealized gains (losses) in accumulated other comprehensive income, tax expense (benefit) | 312 | (748) | (95) |
Reclassification adjustment for realized losses (gains) included in net income, tax (benefit) expense | $ (7) | $ (3) | $ 2 |
SCHEDULE II - FINANCIAL INFOR_6
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Statements of Cash Flows - Parent Company Only (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||||||||||
Net income | $ 83,413 | $ 83,955 | $ 80,284 | $ 74,458 | $ 72,940 | $ 76,838 | $ 75,444 | $ 67,680 | $ 322,110 | $ 292,902 | $ 231,130 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Gain from change in fair value of warrant liability | 0 | $ 0 | $ (1,020) | (93) | 0 | (1,113) | (566) | ||||
Net realized investment losses (gains) | 33 | (481) | (729) | ||||||||
Depreciation and amortization | 11,541 | 11,870 | 11,232 | ||||||||
Amortization of debt discount and debt issuance costs | 1,961 | 1,846 | 1,861 | ||||||||
Deferred income taxes | 90,593 | 84,393 | 65,510 | ||||||||
Share-based compensation expense | 16,914 | 15,425 | 16,678 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accrued investment income | (5,641) | (2,244) | (2,038) | ||||||||
Other assets | (316) | 236 | (218) | ||||||||
Accounts payable and accrued expenses | 10,389 | 1,394 | 16,908 | ||||||||
Net cash provided by operating activities | 342,683 | 313,394 | 325,719 | ||||||||
Cash flows from investing activities | |||||||||||
Purchase of short-term investments | (166,224) | (313,926) | (10,640) | ||||||||
Purchase of fixed-maturity investments, available-for-sale | (488,562) | (233,586) | (514,405) | ||||||||
Proceeds from maturity of short-term investments | 320,545 | 151,635 | 0 | ||||||||
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 143,613 | 116,663 | 163,103 | ||||||||
Software and equipment | (9,372) | (10,572) | (12,238) | ||||||||
Net cash used in investing activities | (200,000) | (289,786) | (374,180) | ||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of common stock related to employee equity plans | 10,549 | 5,442 | 4,201 | ||||||||
Proceeds from issuance of common stock related to warrant exercises | 0 | 518 | 503 | ||||||||
Taxes paid related to net share settlement of equity awards | (9,356) | (5,213) | (5,426) | ||||||||
Payments of debt issuance costs | 0 | 0 | (1,108) | ||||||||
Repurchases of common stock | (91,613) | (56,575) | 0 | ||||||||
Net cash used in financing activities | (90,420) | (55,828) | (1,830) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 52,263 | (32,220) | (50,291) | ||||||||
Cash, cash equivalents and restricted cash, beginning of period | 44,426 | 76,646 | 44,426 | 76,646 | 126,937 | ||||||
Cash, cash equivalents and restricted cash, end of period | 96,689 | 44,426 | 96,689 | 44,426 | 76,646 | ||||||
Parent | |||||||||||
Cash flows from operating activities | |||||||||||
Net income | 322,110 | 292,902 | 231,130 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Gain from change in fair value of warrant liability | 0 | (1,113) | (566) | ||||||||
Net realized investment losses (gains) | 31 | 13 | (10) | ||||||||
Depreciation and amortization | (890) | 789 | 801 | ||||||||
Amortization of debt discount and debt issuance costs | 1,962 | 1,846 | 1,861 | ||||||||
Deferred income taxes | 88,192 | 81,057 | 66,941 | ||||||||
Share-based compensation expense | 16,914 | 15,425 | 16,678 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Investment in subsidiaries, at equity in net assets | (314,556) | (343,477) | (302,165) | ||||||||
Accrued investment income | 205 | (73) | (104) | ||||||||
Receivable from affiliates | (8,108) | 3,348 | (9,474) | ||||||||
Other assets | (57) | 518 | (496) | ||||||||
Accounts payable and accrued expenses | 2,605 | (8,731) | 10,068 | ||||||||
Net cash provided by operating activities | 108,408 | 42,504 | 14,664 | ||||||||
Cash flows from investing activities | |||||||||||
Capitalization of subsidiaries | (800) | (800) | (800) | ||||||||
Purchase of short-term investments | (89,068) | (110,076) | (10,640) | ||||||||
Purchase of fixed-maturity investments, available-for-sale | 0 | 0 | (2,797) | ||||||||
Proceeds from maturity of short-term investments | 100,607 | 86,995 | 0 | ||||||||
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 30,538 | 19,673 | 4,464 | ||||||||
Software and equipment | 2,169 | 1,291 | (1,026) | ||||||||
Net cash used in investing activities | 43,446 | (2,917) | (10,799) | ||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of common stock related to employee equity plans | 10,549 | 5,442 | 4,201 | ||||||||
Proceeds from issuance of common stock related to warrant exercises | 0 | 518 | 503 | ||||||||
Taxes paid related to net share settlement of equity awards | (9,356) | (5,213) | (5,426) | ||||||||
Payments of debt issuance costs | 0 | 0 | (1,108) | ||||||||
Repurchases of common stock | (91,613) | (56,575) | 0 | ||||||||
Net cash used in financing activities | (90,420) | (55,828) | (1,830) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 61,434 | (16,241) | 2,035 | ||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ 4,940 | $ 21,181 | 4,940 | 21,181 | 19,146 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ 66,374 | $ 4,940 | $ 66,374 | $ 4,940 | $ 21,181 |
SCHEDULE II - FINANCIAL INFOR_7
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Supplemental Notes - Parent Company Only (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
NMIC and Re One Combined | |||
Condensed Financial Statements, Captions [Line Items] | |||
Ordinary course dividend paid | $ 98,000 | ||
Dividends, restriction with regards to capital surplus | 96,300 | ||
Parent | |||
Condensed Financial Statements, Captions [Line Items] | |||
Investment in subsidiaries, at equity in net assets | 2,468,333 | $ 2,092,457 | |
Parent | NMIC and Re One Combined | |||
Condensed Financial Statements, Captions [Line Items] | |||
Ordinary course dividend paid | 98,000 | ||
Subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Operating underwriting and operating expenses | $ 163,900 | $ 148,400 | $ 149,400 |
SCHEDULE IV - FINANCIAL INFOR_2
SCHEDULE IV - FINANCIAL INFORMATION OF REGISTRANT REINSURANCE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||||||||||
Gross Amount | $ 650,411 | $ 594,127 | $ 536,630 | ||||||||
Ceded to Other Companies | 139,643 | 118,861 | 92,336 | ||||||||
Net premiums earned | $ 132,940 | $ 130,089 | $ 125,985 | $ 121,754 | $ 119,584 | $ 118,317 | $ 120,870 | $ 116,495 | 510,768 | 475,266 | 444,294 |
Parent | |||||||||||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||||||||||
Gross Amount | 650,411 | 594,127 | 536,630 | ||||||||
Ceded to Other Companies | 139,643 | 118,861 | 92,336 | ||||||||
Assumed from Other Companies | 0 | 0 | 0 | ||||||||
Net premiums earned | $ 510,768 | $ 475,266 | $ 444,294 | ||||||||
Percentage of Amount Assumed to Net | 0% | 0% | 0% |