Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-10816 | |
Entity Registrant Name | MGIC Investment Corp | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-1486475 | |
Entity Address, Address Line One | 250 E. Kilbourn Avenue | |
Entity Address, City or Town | Milwaukee, | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53202 | |
City Area Code | (414) | |
Local Phone Number | 347-6480 | |
Title of each class | Common stock | |
Trading Symbol | MTG | |
Security Exchange Name | NYSE | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 297,025,490 | |
Entity Central Index Key | 0000876437 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investment portfolio: | ||
Fixed income, available-for-sale, at fair value (amortized cost 2022 - $5,970,459; 2021 - $6,397,658) | $ 5,400,982 | $ 6,587,581 |
Equity securities, at fair value (cost 2022 - $16,006; 2021 - $15,838) | 13,885 | 16,068 |
Other invested assets, at cost | 850 | 3,100 |
Total investment portfolio | 5,415,717 | 6,606,749 |
Cash and cash equivalents | 241,982 | 284,690 |
Restricted cash and cash equivalents | 7,776 | 20,268 |
Accrued investment income | 52,867 | 51,902 |
Reinsurance recoverable on loss reserves | 46,384 | 66,905 |
Reinsurance recoverable on paid losses | 214 | 36,275 |
Premiums receivable | 57,654 | 56,540 |
Home office and equipment, net | 44,206 | 45,614 |
Deferred insurance policy acquisition costs | 19,975 | 21,671 |
Deferred income taxes, net | 122,228 | 0 |
Other assets | 145,113 | 134,394 |
Total assets | 6,154,116 | 7,325,008 |
Liabilities: | ||
Loss reserves | 603,370 | 883,522 |
Unearned premiums | 207,935 | 241,690 |
Federal Home Loan Bank advance | 0 | 155,000 |
Senior notes | 641,357 | 881,508 |
Convertible junior subordinated debentures | 21,296 | 110,204 |
Other liabilities | 140,097 | 191,702 |
Total liabilities | 1,614,055 | 2,463,626 |
Contingencies | ||
Shareholders’ equity: | ||
Common stock (one dollar par value, shares authorized 1,000,000; shares issued 2022 - 371,353; 2021 - 371,353; shares outstanding 2022 - 299,478; 2021 - 320,336) | 371,353 | 371,353 |
Paid-in capital | 1,792,043 | 1,794,906 |
Treasury stock at cost (shares 2022 - 71,875; 2021 - 51,017) | (970,870) | (675,265) |
Accumulated other comprehensive income (loss), net of tax | (495,525) | 119,697 |
Retained earnings | 3,843,060 | 3,250,691 |
Total shareholders’ equity | 4,540,061 | 4,861,382 |
Total liabilities and shareholders’ equity | $ 6,154,116 | $ 7,325,008 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 5,970,459 | $ 6,397,658 |
Cost | $ 16,006 | $ 15,838 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 371,353,000 | 371,353,000 |
Common stock, shares outstanding (in shares) | 299,478,000 | 320,336,000 |
Treasury stock, shares at cost (in shares) | 71,875,000 | 51,017,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Premiums written: | ||||
Direct | $ 279,317 | $ 280,172 | $ 830,646 | $ 846,700 |
Assumed | 2,205 | 2,477 | 6,291 | 6,810 |
Ceded | (39,215) | (35,039) | (107,644) | (122,664) |
Net premiums written | 242,307 | 247,610 | 729,293 | 730,846 |
Decrease in unearned premiums, net | 9,804 | 7,234 | 33,755 | 30,582 |
Net premiums earned | 252,111 | 254,844 | 763,048 | 761,428 |
Investment income, net of expenses | 42,549 | 38,282 | 121,116 | 117,304 |
Net gains (losses) on investments and other financial instruments | (3,258) | 612 | (8,776) | 5,773 |
Other revenue | 1,397 | 2,008 | 5,143 | 7,050 |
Total revenues | 292,799 | 295,746 | 880,531 | 891,555 |
Losses and expenses: | ||||
Losses incurred, net | (105,054) | 20,766 | (223,426) | 89,566 |
Amortization of deferred policy acquisition costs | 3,179 | 3,295 | 8,901 | 9,016 |
Other underwriting and operating expenses, net | 58,475 | 53,942 | 166,656 | 155,763 |
Loss on debt extinguishment | 11,632 | 0 | 40,130 | 0 |
Interest expense | 10,300 | 18,011 | 38,673 | 53,993 |
Total losses and expenses | (21,468) | 96,014 | 30,934 | 308,338 |
Income before tax | 314,267 | 199,732 | 849,597 | 583,217 |
Provision for income tax | 64,642 | 41,755 | 175,691 | 122,168 |
Net income | $ 249,625 | $ 157,977 | $ 673,906 | $ 461,049 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.82 | $ 0.47 | $ 2.18 | $ 1.36 |
Diluted (in dollars per share) | $ 0.81 | $ 0.46 | $ 2.15 | $ 1.33 |
Weighted average common shares outstanding - basic (in shares) | 302,622 | 335,938 | 309,097 | 338,045 |
Weighted average common shares outstanding - diluted (in shares) | 307,194 | 353,557 | 315,029 | 355,481 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 249,625 | $ 157,977 | $ 673,906 | $ 461,049 |
Other comprehensive income (loss), net of tax: | ||||
Change in unrealized investment gains and losses | (153,615) | (27,600) | (599,933) | (76,675) |
Benefit plan adjustments | (16,172) | 5,963 | (15,289) | 7,499 |
Other comprehensive income (loss), net of tax | (169,787) | (21,637) | (615,222) | (69,176) |
Comprehensive income (loss) | $ 79,838 | $ 136,340 | $ 58,684 | $ 391,873 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Paid-in capital | Paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Paid-in capital Cumulative Effect, Period of Adoption, Adjusted Balance | Treasury stock | Accumulated other comprehensive income (loss) | Retained earnings | Retained earnings Cumulative Effect, Period of Adoption, Adjustment | Retained earnings Cumulative Effect, Period of Adoption, Adjusted Balance |
Balance, beginning of period at Dec. 31, 2020 | $ 371,353 | $ 1,862,042 | $ (68,289) | $ 1,793,753 | $ (393,326) | $ 216,821 | $ 2,642,096 | $ 68,289 | $ 2,710,385 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Reissuance of treasury stock, net under share-based compensation plans | (15,956) | 8,879 | ||||||||
Equity compensation | 12,077 | |||||||||
Repurchase of common stock | (150,000) | |||||||||
Other comprehensive income (loss), net of tax | $ (69,176) | (69,176) | ||||||||
Net income | 461,049 | 461,049 | ||||||||
Cash dividends | (68,439) | |||||||||
Balance, end of period at Sep. 30, 2021 | $ 4,877,420 | 371,353 | 1,789,874 | (534,447) | 147,645 | 3,102,995 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 [Member] | |||||||||
Balance, beginning of period at Jun. 30, 2021 | 371,353 | 1,786,260 | (384,550) | 169,282 | 2,972,362 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Reissuance of treasury stock, net under share-based compensation plans | (211) | 103 | ||||||||
Equity compensation | 3,825 | |||||||||
Repurchase of common stock | (150,000) | |||||||||
Other comprehensive income (loss), net of tax | $ (21,637) | (21,637) | ||||||||
Net income | 157,977 | 157,977 | ||||||||
Cash dividends | (27,344) | |||||||||
Balance, end of period at Sep. 30, 2021 | 4,877,420 | 371,353 | 1,789,874 | (534,447) | 147,645 | 3,102,995 | ||||
Balance, beginning of period at Dec. 31, 2021 | 4,861,382 | 371,353 | 1,794,906 | (675,265) | 119,697 | 3,250,691 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Reissuance of treasury stock, net under share-based compensation plans | (20,537) | 10,579 | ||||||||
Equity compensation | 17,674 | |||||||||
Repurchase of common stock | (306,184) | |||||||||
Other comprehensive income (loss), net of tax | (615,222) | (615,222) | ||||||||
Net income | 673,906 | 673,906 | ||||||||
Cash dividends | (81,537) | |||||||||
Balance, end of period at Sep. 30, 2022 | 4,540,061 | 371,353 | 1,792,043 | (970,870) | (495,525) | 3,843,060 | ||||
Balance, beginning of period at Jun. 30, 2022 | 371,353 | 1,791,380 | (887,959) | (325,738) | 3,623,983 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Reissuance of treasury stock, net under share-based compensation plans | (2,670) | 1,400 | ||||||||
Equity compensation | 3,333 | |||||||||
Repurchase of common stock | (84,311) | |||||||||
Other comprehensive income (loss), net of tax | (169,787) | (169,787) | ||||||||
Net income | 249,625 | 249,625 | ||||||||
Cash dividends | (30,548) | |||||||||
Balance, end of period at Sep. 30, 2022 | $ 4,540,061 | $ 371,353 | $ 1,792,043 | $ (970,870) | $ (495,525) | $ 3,843,060 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 673,906 | $ 461,049 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 42,826 | 49,820 |
Deferred tax expense | 1,900 | 4,591 |
Equity compensation | 17,674 | 12,077 |
Loss on debt extinguishment | 40,130 | 0 |
Net (gains) losses on investments and other financial instruments | 8,776 | (5,773) |
Change in certain assets and liabilities: | ||
Accrued investment income | (965) | (3,598) |
Reinsurance recoverable on loss reserves | 20,521 | (11,987) |
Reinsurance recoverable on paid losses | 36,061 | 143 |
Premium receivable | (1,114) | (344) |
Deferred insurance policy acquisition costs | 1,696 | (723) |
Profit commission receivable | (1,497) | (18,564) |
Loss reserves | (280,152) | 52,372 |
Unearned premiums | (33,755) | (30,582) |
Return premium accrual | (9,200) | 7,200 |
Current income taxes | 3,140 | 5,453 |
Other, net | (36,154) | (8,724) |
Net cash provided by (used in) operating activities | 483,793 | 512,410 |
Cash flows from investing activities: | ||
Purchases of investments | (544,224) | (1,335,569) |
Proceeds from sales of investments | 391,394 | 239,483 |
Proceeds from maturity of fixed income securities | 536,194 | 700,301 |
Additions to property and equipment | (2,402) | (2,388) |
Net cash provided by (used in) investing activities | 380,962 | (398,173) |
Cash flows from financing activities: | ||
Purchase of convertible junior subordinated debentures | (88,908) | 0 |
Redemption of 5.75% senior notes | (242,296) | 0 |
Repayment of FHLB Advance | (155,000) | 0 |
Cash portion of loss on debt extinguishment | (39,445) | 0 |
Repurchase of common stock | (303,060) | (150,000) |
Dividends paid | (81,288) | (68,276) |
Payment of withholding taxes related to share-based compensation net share settlement | (9,958) | (6,729) |
Net cash provided by (used in) financing activities | (919,955) | (225,005) |
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | (55,200) | (110,768) |
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period | 304,958 | 296,680 |
Cash and cash equivalents and restricted cash and cash equivalents at end of period | $ 249,758 | $ 185,912 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation MGIC Investment Corporation is a holding company which, through Mortgage Guaranty Insurance Corporation (“MGIC”), is principally engaged in the mortgage insurance business. We provide mortgage insurance to lenders throughout the United States and to government sponsored entities to protect against loss from defaults on low down payment residential mortgage loans. MGIC Assurance Corporation (“MAC”) and MGIC Indemnity Corporation (“MIC”), insurance subsidiaries of MGIC, provide insurance for certain mortgages under Fannie Mae and Freddie Mac (the “GSEs”) credit risk transfer programs. The accompanying unaudited consolidated financial statements of MGIC Investment Corporation and its wholly-owned subsidiaries have been prepared in accordance with the instructions to Form 10-Q as prescribed by the Securities and Exchange Commission (“SEC”) for interim reporting and do not include all of the other information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2021 included in our 2021 Annual Report on Form 10-K. As used below, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as the context requires. In the opinion of management, the accompanying financial statements include all adjustments, consisting primarily of normal recurring accruals, necessary to fairly state our consolidated financial position and consolidated results of operations for the periods indicated. The consolidated results of operations for an interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The substantial majority of our NIW has been for loans purchased by the GSEs. The current private mortgage insurer eligibility requirements ("PMIERs") of the GSEs include financial requirements, as well as business, quality control and certain transactional approval requirements. The financial requirements of the PMIERs require a mortgage insurer’s "Available Assets" (generally only the most liquid assets of an insurer) to equal or exceed its "Minimum Required Assets" (which are based on an insurer's book of risk in force, calculated from tables of factors with several risk dimensions). Based on our application of the PMIERs, as of September 30, 2022, MGIC’s Available Assets are in excess of its Minimum Required Assets; and MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Subsequent events |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Taxes The Inflation Reduction Act of 2022 includes provisions for a 1% excise tax on net stock repurchases and a 15% corporate minimum tax. Both of these taxes are effective in 2023. We do not expect these tax provisions to have a material impact on our Consolidated Financial Statements. Prospective Accounting Standards Table 2.1 shows the relevant new amendments to accounting standards, which are not yet effective or adopted. Standard / Interpretation Table 2.1 Amended Standards Effective date ASC 944 Long-Duration Contracts • ASU 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts January 1, 2023 Targeted Improvements for Long Duration Contracts: ASU 2018-12 In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies the amortization of deferred insurance policy acquisition costs. It also provides updates to the recognition, measurement, presentation and disclosure requirements for long duration contracts, which generally do not apply to mortgage insurance. The updated guidance requires deferred acquisition costs to be amortized on a constant level basis over the expected term of the related contracts, versus in proportion to premium, gross profits, or gross margins. In November 2020, FASB issued ASU 2020-11 deferring the effective date, so that it applies for annual periods beginning after December 15, 2022, including interim periods within those annual periods. We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements, but do not expect it to have a material impact. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt obligations The aggregate carrying values of our long-term debt obligations and their par values, if different, as of September 30, 2022 and December 31, 2021 are presented in table 3.1 below. Long-term debt obligations Table 3.1 (In millions) September 30, 2022 December 31, 2021 FHLB Advance - 1.91%, due February 2023 $ — $ 155.0 5.75% Notes, due August 2023 — 241.3 5.25% Notes, due August 2028 (par value: $650 million) 641.4 640.2 9% Debentures, due April 2063 (1) 21.3 110.2 Long-term debt, carrying value $ 662.7 $ 1,146.7 (1) Convertible at any time prior to maturity at the holder’s option, at a conversion rate, which is subject to adjustment, of 76.5496 shares per $1,000 principal amount, representing a conversion price of approximately $13.06 per share. The payment of dividends by our holding company results in adjustments to the conversion rate, with such adjustments generally deferred until the end of the year. The 5.25% Senior Notes (5.25% Notes) and 9% Convertible Junior Subordinated Debentures (“9% Debentures”) are obligations of our holding company, MGIC Investment Corporation. During the nine months ending September 30, 2022, we repurchased $88.9 million in aggregate principal amount of our 9% Debentures at a purchase price of $120.9 million plus accrued interest. The repurchase of our 9% Debentures resulted in a $32.0 million loss on debt extinguishment on our consolidated statement of operations and a reduction of approximately 6.8 million potentially dilutive shares. The Federal Home Loan Bank Advance (the “FHLB Advance”) was an obligation of MGIC. In the first quarter of 2022, we repaid the outstanding principal balance of the FHLB Advance at a prepayment price of $156.3 million, incurring a prepayment fee of $1.3 million. In July 2022, we redeemed the outstanding principal balance of the 5.75% Senior Notes (“5.75% Notes”) at a purchase price of $248.4 million plus accrued interest. The excess of the purchase price over the carrying value, plus the write-off of unamortized issuance costs on the par value, resulted in a $6.8 million loss on debt extinguishment. The 5.75% Notes were an obligation of our holding company. See Note 7 - “Debt” in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional information pertaining to our debt obligations. As of September 30, 2022 we are in compliance with all of our debt covenants. Interest payments Interest payments for the nine months ended September 30, 2022 and 2021 were $52.7 million and $60.0 million, respectively. |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The reinsurance agreements to which we are a party, are discussed below. The effect of all of our reinsurance agreements on premiums earned and losses incurred is shown in table 4.1 below. Reinsurance Table 4.1 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Premiums earned: Direct $ 289,072 $ 287,223 $ 864,191 $ 876,541 Assumed 2,254 2,660 6,501 7,551 Ceded - quota share reinsurance (1) (19,348) (22,911) (56,721) (90,284) Ceded - excess-of-loss reinsurance (19,867) (12,128) (50,923) (32,380) Total ceded (39,215) (35,039) (107,644) (122,664) Net premiums earned $ 252,111 $ 254,844 $ 763,048 $ 761,428 Losses incurred: Direct $ (112,435) $ 17,265 $ (242,861) $ 103,319 Assumed 21 (97) (340) (43) Ceded - quota share reinsurance 7,360 3,598 19,775 (13,710) Losses incurred, net $ (105,054) $ 20,766 $ (223,426) $ 89,566 Other Reinsurance Impacts: Profit commission on quota share reinsurance (1) $ 47,255 $ 45,078 $ 135,049 $ 108,000 Ceding commission on quota share reinsurance 13,321 13,599 38,355 39,657 (1) Ceded premiums earned net of profit commission. Ceded losses incurred for the three and nine months ended September 30, 2022 primarily reflects favorable loss reserve development. See Note 11 - “Loss Reserves” for discussion of our loss reserves. Quota share reinsurance We have entered into quota share reinsurance ("QSR") transactions with panels of third-party reinsurers to cede a fixed quota share percentage of premiums earned and received and losses incurred on insurance covered by the transactions. We receive the benefit of a ceding commission equal to 20% of premiums ceded before profit commission. We also receive the benefit of a profit commission through a reduction of premiums we cede. The profit commission varies inversely with the level of losses on a “dollar for dollar” basis and can be eliminated at annual loss ratios higher than we have experienced on our QSR Transactions. Each of our QSR Transactions typically have annual loss ratio caps of 300% and lifetime loss ratios of 200% . Table 4.2 below provides additional detail regarding our QSR Transactions. Quota Share Reinsurance Table 4.2 Quota Share Contract Covered Policy Years Quota Share % Annual Loss Ratio to Exhaust Profit Commission (1) Contractual Termination Date 2015 QSR Prior to 2017 15.0 % 68.0 % December 31, 2031 2019 QSR 2019 30.0 % 62.0 % December 31, 2030 2020 QSR 2020 12.5 % 62.0 % December 31, 2031 2020 QSR and 2021 QSR 2020 17.5 % 62.0 % December 31, 2032 2020 QSR and 2021 QSR 2021 17.5 % 61.9 % December 31, 2032 2021 QSR and 2022 QSR 2021 12.5 % 57.5 % December 31, 2032 2021 QSR and 2022 QSR 2022 15.0 % 57.5 % December 31, 2033 2022 QSR and 2023 QSR 2022 15.0 % 62.0 % December 31, 2033 2022 QSR and 2023 QSR 2023 15.0 % 62.0 % December 31, 2034 Credit Union QSR (2) 2020-2025 65.0 % 50.0 % December 31, 2039 (1) We will receive a profit commission provided the annual loss ratio on policies covered under the transaction remains below this ratio. (2) Eligible credit union business written before April 1, 2020 was covered by our 2019 and 2015 QSR Transactions. We can elect to terminate the QSR Transactions under specified scenarios without penalty upon prior written notice, including if we will receive less than 90% (80% for the Credit Union QSR Transaction) of the full credit amount under the PMIERs, full financial statement credit or full credit under applicable regulatory capital requirements for the risk ceded in any required calculation period. Table 4.3 provides additional detail regarding optional termination dates and optional reductions to our quota share percentage which can, in each case, be elected by us for a fee. Under the optional reduction to the quota share percentage, we may reduce our quota share percentage from the original percentage shown in table 4.2 to the percentage shown in table 4.3. Quota Share Reinsurance Table 4.3 Quota Share Contract Covered Policy Years Optional Termination Date (1) Optional Quota Share % Reduction Date (2) Optional Reduced Quota Share % 2015 QSR Prior to 2017 December 31, 2022 NA NA 2019 QSR 2019 December 31, 2022 January 1, 2023 25% or 20% 2020 QSR 2020 December 31, 2022 January 1, 2023 10.5% or 8% 2020 QSR and 2021 QSR 2020 December 31, 2022 January 1, 2023 14.5% or 12% 2020 QSR and 2021 QSR 2021 December 31, 2023 January 1, 2023 14.5% or 12% 2021 QSR and 2022 QSR 2021 December 31, 2023 January 1, 2023 10.5% or 8% 2021 QSR and 2022 QSR 2022 December 31, 2024 July 1, 2023 12.5% or 10% 2022 QSR and 2023 QSR 2022 December 31, 2024 July 1, 2023 12.5% or 10% 2022 QSR and 2023 QSR 2023 December 31, 2025 July 1, 2024 12.5% or 10% (1) We can elect early termination of the QSR Transaction beginning on this date, and bi-annually thereafter. (2) We can elect to reduce the quota share percentage beginning on this date, and bi-annually thereafter. We have elected to terminate our 2015 QSR and 2019 QSR Transactions effective December 31, 2022. See Note 9 “Reinsurance” in our Annual Report on Form 10-K for the year ended December 31, 2021 for information about the termination of our 2017 and 2018 QSR Transactions, which resulted in a reinsurance recoverable on paid losses of $36 million for loss and loss adjustment expenses (“LAE”) reserves incurred at the time of termination. Under the terms of our QSR Transactions, ceded premiums earned, ceding commissions, profit commission, and ceded paid loss and LAE are settled net on a quarterly basis. The ceded premiums earned due after deducting the related ceding commission and profit commission is reported within Other liabilities on the consolidated balance sheets. The reinsurance recoverable on loss reserves related to our QSR Transactions was $46.4 million as of September 30, 2022 and $66.9 million as of December 31, 2021. The reinsurance recoverable balance is secured by funds on deposit from reinsurers, the minimum amount of which is based on the greater of 1) a reinsurer's funding requirements under PMIERs or 2) ceded reserves and unpaid losses. Each of the reinsurers under our quota share reinsurance agreements described above has an insurer financial strength rating of A- or better (or a comparable rating) by Standard and Poor's Rating Services, A.M. Best, Moody's, or a combination of the three. Excess of loss reinsurance We have Excess-of-loss transactions (“XOL Transactions”) with a panel of unaffiliated reinsurers executed through the traditional reinsurance market (“Traditional XOL Transaction”) and with unaffiliated special purpose insurers (“Home Re Transactions”). The Traditional XOL Transaction provides up to $175 million of reinsurance coverage on eligible NIW in 2022. The Traditional XOL Transaction has a contractual termination date after approximately ten years, with an optional termination date after seven years and quarterly thereafter. For the covered policies, we retain the first layer of the aggregate losses paid, and the reinsurers will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. The reinsurance coverage is subject to adjustment based on the risk characteristics of the covered loans. The reinsurance premiums ceded to the Traditional XOL Transaction are based off the remaining reinsurance coverage levels. The reinsured coverage levels are secured by funds on deposit from reinsurers, the minimum amount of which is based on the greater of 1) a reinsurer's funding requirements under PMIERs or 2) ceded reserves and unpaid losses. The Home Re Transactions are executed with unaffiliated special purpose insurers (“Home Re Entities”). For the reinsurance coverage periods, we retain the first layer of the respective aggregate losses paid, and a Home Re Entity will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. Subject to certain conditions, the reinsurance coverage decreases over a period of either 10 or 12.5 years, depending on the transaction, as the underlying covered mortgages amortize or are repaid, or mortgage insurance losses are paid. The Home Re Entities financed the coverages by issuing mortgage insurance-linked notes (“ILNs”) to unaffiliated investors in an aggregate amount equal to the initial reinsurance coverage amounts. Each ILN is non-recourse to any assets of MGIC or affiliates. The proceeds of the ILNs, which were deposited into reinsurance trusts for the benefit of MGIC, will be the source of reinsurance claim payments to MGIC and principal repayments on the ILNs. When a “Trigger Event” is in effect, as defined in the related insurance-linked notes transaction agreements, payment of principal on the related notes will be suspended and the reinsurance coverage available to MGIC under the transactions will not be reduced by such principal payments. As of September 30, 2022 a "Trigger Event" has occurred on our Home Re 2019-1 ILN transaction because the reinsured principal balance of loans that were reported 60 or more days delinquent exceeded a percentage of the total reinsured principal balance of loans specified under each transaction. A "Trigger Event" has also occurred on the Home Re 2022-1 ILN transactions because the credit enhancement of the most senior tranche is less than the target credit enhancement. Tables 4.4a and 4.4b provide a summary of our Home Re Transactions as of September 30, 2022 and December 31, 2021. Excess of Loss Reinsurance - Home Re Transactions 4.4a ($ in thousands) Issue Date Policy In force Dates Optional Call Date (1) Legal Maturity Initial First Layer Retention Initial Excess of Loss Reinsurance Coverage Home Re 2022-1, Ltd. April 26, 2022 May 29, 2021 - December 31, 2021 April 25, 2028 12.5 years $325,589 $473,575 Home Re 2021-2, Ltd. August 3, 2021 January 1, 2021 - May 28, 2021 July 25, 2028 12.5 years 190,159 398,429 Home Re 2021-1, Ltd. February 2, 2021 August 1, 2020 - December 31, 2020 January 25, 2028 12.5 years 211,159 398,848 Home Re 2020-1, Ltd. October 29, 2020 January 1, 2020 - July 31, 2020 October 25, 2027 10 years 275,283 412,917 Home Re 2019-1, Ltd. May 25, 2019 January 1, 2018 - March 31, 2019 May 25, 2026 10 years 185,730 315,739 Home Re 2018-1, Ltd. October 30, 2018 July 1, 2016 - December 31, 2017 October 25, 2025 10 years 168,691 318,636 (1) We have the right to terminate the Home Re Transactions under certain circumstances and on any payment date on or after the respective Optional Call Date. 4.4b Remaining First Layer Retention Remaining Excess of Loss Reinsurance Coverage ($ in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Home Re 2022-1, Ltd. $ 325,589 $ — $ 473,575 $ — Home Re 2021-2, Ltd. 190,135 190,159 367,702 398,429 Home Re 2021-1, Ltd. 211,117 211,142 306,243 387,830 Home Re 2020-1, Ltd. 275,154 275,204 133,120 234,312 Home Re 2019-1, Ltd. 183,691 183,917 208,146 208,146 Home Re 2018-1, Ltd. 165,028 165,365 162,305 218,343 The reinsurance premiums ceded to each Home Re Entity are composed of coverage, initial expense and supplemental premiums. The coverage premiums are generally calculated as the difference between the amount of interest payable by the Home Re Entity on the remaining reinsurance coverage levels, and the investment income collected on the collateral assets held in a reinsurance trust account and used to collateralize the Home Re Entity’s reinsurance obligation to MGIC. The amount of monthly reinsurance coverage premium ceded on the Home Re Transactions will fluctuate due to changes in the reference rate and changes in money market rates that affect investment income collected on the assets in the reinsurance trust. The Home Re 2021-2 and Home Re 2022-1 Transactions reference SOFR, while the remaining Home Re Transactions reference one-month LIBOR. As a result, we concluded that each Home Re Transaction contains an embedded derivative that is accounted for separately as a freestanding derivative. The fair values of the derivatives at September 30, 2022, were not material to our consolidated balance sheet and the changes in fair value during the three and nine months ended September 30, 2022 were not material to our consolidated statements of operations. (See Note 7 - “ Investments ” and Note 8 - “Fair Value Measurements ”.) At the time the Home Re Transactions were entered into, we concluded that each Home Re Entity is a variable interest entity (“VIE”). A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make sufficient decisions relating to the entity’s operations through voting rights or do not substantively participate in gains and losses of the entity. Given that MGIC (1) does not have the unilateral power to direct the activities that most significantly affect each Home Re Entity’s economic performance and (2) does not have the obligation to absorb losses or the right to receive benefits of each Home Re Entity that could be significant to the Home Re Entity, consolidation of the Home Re Entities is not required. We are required to disclose our maximum exposure to loss, which we consider to be an amount that we could be required to record in our statements of operations, as a result of our involvement with the VIEs under our Home Re Transactions. As of September 30, 2022, and December 31, 2021, we did not have material exposure to the VIEs as we have no investment in the VIEs and had no reinsurance claim payments due from the VIEs under our reinsurance transactions. We are unable to determine the timing or extent of claims from losses that are ceded under the reinsurance transactions. The VIE assets are deposited in reinsurance trusts for the benefit of MGIC that will be the source of reinsurance claim payments to MGIC. The purpose of the reinsurance trusts is to provide security to MGIC for the obligations of the VIEs under the reinsurance transactions. The trustee of the reinsurance trusts, a recognized provider of corporate trust services, has established segregated accounts within the reinsurance trusts for the benefit of MGIC, pursuant to the trust agreements. The trust agreements are governed by, and construed in accordance with, the laws of the State of New York. If the trustee of the reinsurance trusts failed to distribute claim payments to us as provided in the reinsurance trusts, we would incur a loss related to our losses ceded under the reinsurance transactions and deemed unrecoverable. We are also unable to determine the impact such possible failure by the trustee to perform pursuant to the reinsurance trust agreements may have on our consolidated financial statements. As a result, we are unable to quantify our maximum exposure to loss related to our involvement with the VIEs. MGIC has certain termination rights under the reinsurance transactions should its claims not be paid. We consider our exposure to loss from our reinsurance transactions with the VIEs to be remote. Table 4.5 presents the total assets of the Home Re Entities as of September 30, 2022 and December 31, 2021. Home Re total assets Table 4.5 (In thousands) Home Re Entity Total VIE Assets September 30, 2022 Home Re 2022-1 Ltd. $ 473,575 Home Re 2021-2 Ltd. 372,715 Home Re 2021-1 Ltd. 317,891 Home Re 2020-1 Ltd. 141,508 Home Re 2019-1 Ltd. 208,146 Home Re 2018-1 Ltd. 169,157 December 31, 2021 Home Re 2021-2 Ltd. $ 398,429 Home Re 2021-1 Ltd. 398,848 Home Re 2020-1 Ltd. 251,387 Home Re 2019-1 Ltd. 208,146 Home Re 2018-1 Ltd. 218,343 The reinsurance trust agreements provide that the trust assets may generally only be invested in certain money market funds that (i) invest at least 99.5% of their total assets in cash or direct U.S. federal government obligations, such as U.S. Treasury bills, as well as other short-term securities backed by the full faith and credit of the U.S. federal government or issued by an agency of the U.S. federal government, (ii) have a principal stability fund rating of “AAAm” by S&P or a money market fund rating of “Aaamf” by Moody’s as of the Closing Date and thereafter maintain any rating with either S&P or Moody’s, and (iii) are permitted investments under the applicable credit for reinsurance laws and applicable PMIERs credit for reinsurance requirements. The total calculated PMIERs credit for risk ceded under our XOL Transactions are generally based on the PMIERs requirement of the covered policies and the attachment and detachment points of the coverage, all of which fluctuate over time. (See Note 1 - “Nature of Business and Basis of Presentation” .) |
Litigation and Contingencies
Litigation and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Before paying an insurance claim, generally we review the loan and servicing files to determine the appropriateness of the claim amount. When reviewing the files, we may determine that we have the right to rescind coverage or deny a claim on the loan (both referred to herein as “rescissions”). In addition, our insurance policies generally provide that we can reduce a claim if the servicer did not comply with its obligations under our insurance policy (such reduction referred to as a “curtailment”). When the insured disputes our right to rescind coverage or curtail claims, we generally engage in discussions in an attempt to settle the dispute. If we are unable to reach a settlement, the outcome of a dispute ultimately may be determined by legal proceedings. Under ASC 450-20, until a loss associated with settlement discussions or legal proceedings becomes probable and can be reasonably estimated, we consider our claim payment or rescission resolved for financial reporting purposes and do not accrue an estimated loss. When we determine that a loss is probable and can be reasonably estimated, we record our best estimate of our probable loss. In those cases, until settlement negotiations or legal proceedings are concluded (including the receipt of any necessary GSE approvals), it is possible that we will record an additional loss. We have been named as a third-party defendant in a lawsuit that involves refunds of mortgage insurance premiums under the Homeowners Protection Act. We are monitoring litigation addressing similar issues in which we have not been named a defendant. We are unable to assess the potential impact of any such litigation at this time. In addition, from time to time, we are involved in other disputes and legal proceedings in the ordinary course of business. In our opinion, based on the facts known at this time, the ultimate resolution of these ordinary course disputes and legal proceedings will not have a material adverse effect on our financial position or results of operations. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of shares of common stock outstanding. For purposes of calculating basic EPS, vested restricted stock and restricted stock units (“RSUs”) are considered outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. The determination of whether components are dilutive is calculated independently for each period. We calculate diluted EPS using the treasury stock method and if-converted method. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if unvested RSUs result in the issuance of common stock. Under the if-converted method, diluted EPS reflects the potential dilution that could occur if our 9% Debentures result in the issuance of common stock. The determination of potentially issuable shares does not consider the satisfaction of the conversion requirements and the shares are included in the determination of diluted EPS as of the beginning of the period, if dilutive. Table 6.1 reconciles the numerators and denominators used to calculate basic and diluted EPS. Earnings per share Table 6.1 Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2022 2021 2022 2021 Basic earnings per share: Net income $ 249,625 $ 157,977 $ 673,906 $ 461,049 Weighted average common shares outstanding - basic 302,622 335,938 309,097 338,045 Basic earnings per share $ 0.82 $ 0.47 $ 2.18 $ 1.36 Diluted earnings per share: Net income $ 249,625 $ 157,977 $ 673,906 $ 461,049 Interest expense, net of tax (1): 9% Debentures 620 3,712 2,851 11,135 Diluted income available to common shareholders $ 250,245 $ 161,689 $ 676,757 $ 472,184 Weighted average common shares outstanding - basic 302,622 335,938 309,097 338,045 Effect of dilutive securities: Unvested RSUs 1,902 1,834 1,848 1,651 9% Debentures 2,670 15,785 4,084 15,785 Weighted average common shares outstanding - diluted 307,194 353,557 315,029 355,481 Diluted earnings per share $ 0.81 $ 0.46 $ 2.15 $ 1.33 (1) Interest expense for the three and nine months ended September 30, 2022 and 2021, respectively, has been tax effected at a rate of 21%. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Investments | Investments Fixed income securities Our fixed income securities classified as available-for-sale at September 30, 2022 and December 31, 2021 are shown in tables 7.1a and 7.1b below. Details of fixed income securities by category as of September 30, 2022 Table 7.1a (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 180,941 $ 25 $ (10,294) $ 170,672 Obligations of U.S. states and political subdivisions 2,414,505 1,700 (265,167) 2,151,038 Corporate debt securities 2,393,106 148 (227,409) 2,165,845 ABS 134,309 5 (5,819) 128,495 RMBS 230,997 15 (28,372) 202,640 CMBS 266,711 14 (21,080) 245,645 CLOs 337,827 — (12,329) 325,498 Foreign government debt 4,486 — (914) 3,572 Commercial paper 7,577 — — 7,577 Total fixed income securities $ 5,970,459 $ 1,907 $ (571,384) $ 5,400,982 Details of fixed income securities by category as of December 31, 2021 Table 7.1b (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 133,990 $ 285 $ (868) $ 133,407 Obligations of U.S. states and political subdivisions 2,408,688 133,361 (7,396) 2,534,653 Corporate debt securities 2,704,586 75,172 (13,776) 2,765,982 ABS 150,888 830 (1,008) 150,710 RMBS 309,991 2,397 (3,278) 309,110 CMBS 315,330 5,736 (1,936) 319,130 CLOs 360,436 609 (106) 360,939 Foreign government debt 13,749 — (99) 13,650 Total fixed income securities $ 6,397,658 $ 218,390 $ (28,467) $ 6,587,581 We had $12.2 million and $13.4 million of investments at fair value on deposit with various states as of September 30, 2022 and December 31, 2021, respectively, due to regulatory requirements of those state insurance departments. In connection with our insurance and reinsurance activities within MAC and MIC, insurance subsidiaries of MGIC, we are required to maintain assets in trusts for the benefit of contractual counterparties, which had investments at fair value of $165.0 million and $189.8 million at September 30, 2022 and December 31, 2021, respectively. The amortized cost and fair values of fixed income securities at September 30, 2022, by contractual maturity, are shown in table 7.2 below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most ABS, RMBS, CMBS, and CLOs provide for periodic payments throughout their lives, they are listed in separate categories. Fixed income securities maturity schedule Table 7.2 September 30, 2022 (In thousands) Amortized cost Fair Value Due in one year or less $ 422,546 $ 416,536 Due after one year through five years 1,413,885 1,334,284 Due after five years through ten years 1,814,408 1,614,687 Due after ten years 1,349,776 1,133,197 5,000,615 4,498,704 ABS 134,309 128,495 RMBS 230,997 202,640 CMBS 266,711 245,645 CLOs 337,827 325,498 Total as of September 30, 2022 $ 5,970,459 $ 5,400,982 Equity securities The cost and fair value of investments in equity securities at September 30, 2022 and December 31, 2021 are shown in tables 7.3a and 7.3b below. Details of equity security investments as of September 30, 2022 Table 7.3a (In thousands) Cost Gross Gains Gross Losses Fair Value Equity securities $ 16,006 $ — $ (2,121) $ 13,885 Details of equity security investments as of December 31, 2021 Table 7.3b (In thousands) Cost Gross Gains Gross Losses Fair Value Equity securities $ 15,838 $ 264 $ (34) $ 16,068 Net gains (losses) on investments and other financial instruments The net gains (losses) on investments and other financial instruments and the proceeds from the sale of fixed income securities classified as available-for-sale are shown in table 7.4 below. Details of net gains (losses) on investments and other financial instruments Table 7.4 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Fixed income securities Gains on sales 1,667 1,389 6,788 6,680 Losses on sales (7,040) (259) (12,790) (1,004) Change in credit allowance — (1) — 48 Impairments (1,415) — (1,415) — Equity securities gains (losses) (617) (108) (2,351) (308) Change in embedded derivative on Home Re Transactions 4,199 (397) 983 376 Other (52) (12) 9 (19) Net gains (losses) on investments and other financial instruments (3,258) 612 (8,776) 5,773 Proceeds from sales of fixed income securities 125,186 106,765 388,740 246,827 Other invested assets At December 31, 2021, the FHLB Advance amount was secured by $167.2 million of eligible collateral. As a result of the prepayment of the outstanding principal balance on the FHLB Advance we are no longer required to maintain collateral. Our other invested assets balance includes an investment in FHLB stock that is carried at cost, which due to its nature approximates fair value. Ownership of FHLB stock provides access to a secured lending facility. Unrealized investment losses Tables 7.5a and 7.5b below summarize, for all available-for-sale investments in an unrealized loss position at September 30, 2022 and December 31, 2021, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in tables 7.5a and 7.5b are estimated using the process described in Note 8 - “Fair Value Measurements” to these consolidated financial statements and in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2021 Annual Report on Form 10-K. Unrealized loss aging for securities by type and length of time as of September 30, 2022 Table 7.5a Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 91,057 $ (4,565) $ 52,868 $ (5,729) $ 143,925 $ (10,294) Obligations of U.S. states and political subdivisions 1,993,265 (229,380) 122,240 (35,787) 2,115,505 (265,167) Corporate debt securities 1,897,128 (164,708) 307,124 (62,701) 2,204,252 (227,409) ABS 96,910 (3,741) 32,673 (2,078) 129,583 (5,819) RMBS 124,775 (13,598) 93,453 (14,774) 218,228 (28,372) CMBS 183,053 (13,797) 66,755 (7,283) 249,808 (21,080) CLOs 266,139 (9,355) 59,359 (2,974) 325,498 (12,329) Foreign government debt — — 3,572 (914) 3,572 (914) Total $ 4,652,327 $ (439,144) $ 738,044 $ (132,240) $ 5,390,371 $ (571,384) Unrealized loss aging for securities by type and length of time as of December 31, 2021 Table 7.5b Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 91,154 $ (790) $ 2,616 $ (78) $ 93,770 $ (868) Obligations of U.S. states and political subdivisions 452,021 (7,189) 15,540 (207) 467,561 (7,396) Corporate debt securities 865,085 (13,260) 10,997 (516) 876,082 (13,776) ABS 100,064 (998) 1,552 (10) 101,616 (1,008) RMBS 180,586 (2,548) 31,641 (730) 212,227 (3,278) CMBS 89,889 (1,887) 1,511 (49) 91,400 (1,936) CLOs 177,663 (71) 21,973 (35) 199,636 (106) Foreign government debt 13,649 (99) — — 13,649 (99) Total $ 1,970,111 $ (26,842) $ 85,830 $ (1,625) $ 2,055,941 $ (28,467) Based on current facts and circumstances, we believe the unrealized losses as of September 30, 2022 presented in table 7.5a above are not indicative of the ultimate collectability of the current amortized cost of the securities. The unrealized losses in all categories of our investments at September 30, 2022 were primarily caused by an increase in prevailing interest rates. We also rely upon estimates of several credit and non-credit factors in our review and evaluation of individual investments to determine whether a credit impairment exists. All of the securities in an unrealized loss position are current with respect to their interest obligations. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring fair value measurements The following describes the valuation methodologies generally used by the independent pricing sources, or by us, to measure financial instruments at fair value, including the general classification of such financial instruments pursuant to the valuation hierarchy. • Fixed income securities: U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies: Securities with valuations derived from quoted prices for identical instruments in active markets that we can access are categorized in Level 1 of the fair value hierarchy. Securities valued by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information in the valuation process are categorized as Level 2 of the fair value hierarchy. Corporate Debt Bonds are valued by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the valuation process. These securities are generally categorized in Level 2 of the fair value hierarchy. Obligations of U.S. States & Political Subdivisions are valued by tracking, capturing, and analyzing quotes for active issues and trades reported via the Municipal Securities Rulemaking Board records. Daily briefings and reviews of current economic conditions, trading levels, spread relationships, and the slope of the yield curve provide further data for evaluation. These securities are generally categorized in Level 2 of the fair value hierarchy. Residential Mortgage-Backed Securities ("RMBS") are valued by monitoring interest rate movements, and other pertinent data daily. Incoming market data is enriched to derive spread, yield and/or price data as appropriate, enabling known data points to be extrapolated for valuation application across a range of related securities. These securities are generally categorized in Level 2 of the fair value hierarchy. Commercial Mortgage-Backed Securities ("CMBS") are valued using techniques that reflect market participants’ assumptions and maximize the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. Evaluation uses regular reviews of the inputs for securities covered, including executed trades, broker quotes, credit information, collateral attributes and/or cash flow waterfall as applicable. These securities are generally categorized in Level 2 of the fair value hierarchy. Asset-Backed Securities ("ABS") are valued using spreads and other information solicited from market buy-and-sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts. Cash flows are generated for each tranche, benchmark yields are determined, and deal collateral performance and tranche level attributes including trade activity, bids, and offers are applied, resulting in tranche specific prices. These securities are generally categorized in Level 2 of the fair value hierarchy. Collateralized loan obligations ("CLOs") are valued by evaluating manager rating, seniority in the capital structure, assumptions about prepayment, default and recovery and their impact on cash flow generation. Loan level net asset values are determined and aggregated for tranches and as a final step prices are checked against available recent trade activity. These securities are generally categorized in Level 2 of the fair value hierarchy. Foreign government debt is valued by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the valuation process. These securities are generally categorized in Level 2 of the fair value hierarchy. Commercial Paper, which has an original maturity greater than 90 days , is valued using market data for comparable instruments of similar maturity and average yields. These securities are generally categorized in Level 2 of the fair value hierarchy. • Equity securities: Consist of actively traded, exchange-listed equity securities, including exchange traded funds (“ETFs”) and Bond Mutual Funds, with valuations derived from quoted prices for identical assets in active markets that we can access. These securities are valued in Level 1 of the fair value hierarchy. • Cash Equivalents: Consists of money market funds and treasury bills with valuations derived from quoted prices for identical assets in active markets that we can access. These securities are valued in level 1 of the fair value hierarchy. Instruments in this category valued using market data for comparable instruments are classified as level 2 in the fair value hierarchy. Assets measured at fair value, by hierarchy level, as of September 30, 2022 and December 31, 2021 are shown in tables 8.1a and 8.1b below. The fair value of the assets is estimated using the process described above, and more fully in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2021 Annual Report on Form 10-K. Assets carried at fair value by hierarchy level as of September 30, 2022 Table 8.1a (In thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 170,672 $ 151,741 $ 18,931 Obligations of U.S. states and political subdivisions 2,151,038 — 2,151,038 Corporate debt securities 2,165,845 — 2,165,845 ABS 128,495 — 128,495 RMBS 202,640 — 202,640 CMBS 245,645 — 245,645 CLOs 325,498 — 325,498 Foreign government debt 3,572 — 3,572 Commercial paper 7,577 — 7,577 Total fixed income securities 5,400,982 151,741 5,249,241 Equity securities 13,885 13,885 — Cash equivalents 236,940 198,397 38,543 Total $ 5,651,807 $ 364,023 $ 5,287,784 Assets carried at fair value by hierarchy level as of December 31, 2021 Table 8.1b (In thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 133,407 $ 102,153 $ 31,254 Obligations of U.S. states and political subdivisions 2,534,653 — 2,534,653 Corporate debt securities 2,765,982 — 2,765,982 ABS 150,710 — 150,710 RMBS 309,110 — 309,110 CMBS 319,130 — 319,130 CLOs 360,939 — 360,939 Foreign government debt 13,650 — 13,650 Total fixed income securities 6,587,581 102,153 6,485,428 Equity securities 16,068 16,068 — Cash equivalents 254,230 254,230 — Total $ 6,857,879 $ 372,451 $ 6,485,428 Certain financial instruments, including insurance contracts, are excluded from these fair value disclosure requirements. The carrying values of cash and cash equivalents (Level 1) and accrued investment income (Level 2) approximated their fair values. Additional fair value disclosures related to our investment portfolio are included in Note 7 – “Investments.” In addition to the assets carried at fair value discussed above, we have embedded derivatives carried at fair value related to our Home Re Transactions that are classified as Other liabilities or Other assets in our consolidated balance sheets. The estimated fair value related to our embedded derivatives reflects the present value impact of the variation in investment income on the assets held by the reinsurance trusts and the contractual reference rate on the Home Re Transactions used to calculate the reinsurance premiums we will pay. These liabilities or assets are categorized in Level 3 of the fair value hierarchy. At September 30, 2022 and December 31, 2021, the fair value of the embedded derivatives was a liability of $0.8 million and $1.8 million, respectively. (See Note 4 - "Reinsurance" for more information about our reinsurance programs.) Real estate acquired through claim settlement is carried at fair values and is reported in “Other assets” on the consolidated balance sheet. These assets are categorized as Level 3 of the fair value hierarchy. Activity related to the Level 3 assets and liabilities (including realized and unrealized gains and losses, purchases and sales) were immaterial for the three and nine months ended September 30, 2022 and 2021. Financial assets and liabilities not measured at fair value Other invested assets include an investment in FHLB stock that is carried at cost, which due to restrictions that require it to be redeemed or sold only to the security issuer at par value, approximates fair value. The fair value of other invested assets is categorized as Level 2. Financial liabilities include our outstanding debt obligations. The fair values of our 5.75% and 5.25% Notes and 9% Debentures were based on observable market prices. In all cases the fair values of the financial liabilities below are categorized as Level 2. Table 8.2 presents the carrying value and fair value of our financial assets and liabilities disclosed, but not carried, at fair value at September 30, 2022 and December 31, 2021. Financial assets and liabilities not measured at fair value Table 8.2 September 30, 2022 December 31, 2021 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Financial assets Other invested assets $ 850 $ 850 $ 3,100 $ 3,100 Financial liabilities FHLB Advance — — 155,000 157,585 5.75% Senior Notes — — 241,255 256,213 5.25% Senior Notes 641,357 580,931 640,253 686,875 9% Convertible Junior Subordinated Debentures 21,296 28,475 110,204 151,000 Total financial liabilities $ 662,653 $ 609,406 $ 1,146,712 $ 1,251,673 |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other Comprehensive Income | Other Comprehensive Income The pretax and related income tax benefit (expense) components of our other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021 are included in table 9.1 below. Components of other comprehensive income (loss) Table 9.1 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Net unrealized investment (losses) gains arising during the period $ (194,449) $ (34,937) $ (759,409) $ (97,057) Total income tax benefit (expense) 40,834 7,337 159,476 20,382 Net of taxes (153,615) (27,600) (599,933) (76,675) Net changes in benefit plan assets and obligations (20,471) 7,548 (19,353) 9,492 Total income tax benefit (expense) 4,299 (1,585) 4,064 (1,993) Net of taxes (16,172) 5,963 (15,289) 7,499 Total other comprehensive income (loss) (214,920) (27,389) (778,762) (87,565) Total income tax benefit (expense) 45,133 5,752 163,540 18,389 Total other comprehensive income (loss), net of tax $ (169,787) $ (21,637) $ (615,222) $ (69,176) The pretax and related income tax benefit (expense) components of the amounts reclassified from our accumulated other comprehensive income (loss) (“AOCI”) to our consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 are included in table 9.2 below. Reclassifications from AOCI Table 9.2 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Reclassification adjustment for net realized (losses) gains (1) $ (6,681) $ 1,045 $ (4,273) $ 7,462 Income tax benefit (expense) 1,403 (219) 897 (1,566) Net of taxes (5,278) 826 (3,376) 5,896 Reclassification adjustment related to benefit plan assets and obligations (2) (6,228) (971) (7,346) (2,915) Income tax benefit (expense) 1,308 204 1,543 612 Net of taxes (4,920) (767) (5,803) (2,303) Total reclassifications (12,909) 74 (11,619) 4,547 Income tax benefit (expense) 2,711 (15) 2,440 (954) Total reclassifications, net of tax $ (10,198) $ 59 $ (9,179) $ 3,593 (1) Increases (decreases) Net realized investment gains (losses) on the consolidated statements of operations. (2) Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations. A rollforward of AOCI for the nine months ended September 30, 2022, including amounts reclassified from AOCI, are included in table 9.3 below. Rollforward of AOCI Table 9.3 Nine Months Ended September 30, 2022 (In thousands) Net unrealized gains and (losses) on available-for-sale securities Net benefit plan assets and (obligations) recognized in shareholders' equity Total accumulated other comprehensive income (loss) Balance at December 31, 2021, net of tax $ 150,038 $ (30,341) $ 119,697 Other comprehensive income (loss) before reclassifications (603,309) (21,092) (624,401) Less: Amounts reclassified from AOCI (3,376) (5,803) (9,179) Balance, September 30, 2022, net of tax $ (449,895) $ (45,630) $ (495,525) |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans Tables 10.1 and 10.2 provide the components of net periodic benefit cost for our pension, supplemental executive retirement and other postretirement benefit plans for the three and nine months ended September 30, 2022 and 2021. Components of net periodic benefit cost Table 10.1 Three Months Ended September 30, Pension and Supplemental Executive Retirement Plans Other Postretirement Benefit Plans (In thousands) 2022 2021 2022 2021 Service cost $ 1,813 $ 1,908 $ 327 $ 377 Interest cost 2,863 2,794 173 163 Expected return on plan assets (4,907) (5,229) (2,625) (2,216) Amortization of net actuarial losses (gains) 1,266 1,403 (776) (425) Amortization of prior service cost (credit) (57) (60) 123 53 Settlements and curtailments 5,671 4,732 — — Net periodic benefit cost (benefit) $ 6,649 $ 5,548 $ (2,778) $ (2,048) Components of net periodic benefit cost Table 10.2 Nine Months Ended September 30, Pension and Supplemental Executive Retirement Plans Other Postretirement Benefit Plans (In thousands) 2022 2021 2022 2021 Service cost $ 5,439 $ 5,724 $ 981 $ 1,131 Interest cost 8,588 8,383 521 487 Expected return on plan assets (14,723) (15,687) (7,876) (6,647) Amortization of net actuarial losses (gains) 3,798 4,208 (2,328) (1,273) Amortization of prior service cost (credit) (163) (179) 367 159 Settlements and curtailments 5,671 4,732 — — Net periodic benefit cost (benefit) $ 8,610 $ 7,181 $ (8,335) $ (6,143) Contributions of $6.3 million have been made to our qualified pension plan in 2022. |
Loss Reserves
Loss Reserves | 9 Months Ended |
Sep. 30, 2022 | |
Insurance Loss Reserves [Abstract] | |
Loss Reserves | Loss Reserves We establish case reserves and LAE reserves on delinquent loans that were reported to us as two or more payments past due and have not become current or resulted in a claim payment. Such loans are referred to as being in our delinquency inventory. Case reserves are established by estimating the number of loans in our delinquency inventory that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity. IBNR reserves are established for estimated losses from delinquencies we estimate have occurred prior to the close of an accounting period, but have not yet been reported to us. IBNR reserves are also established using estimated claim rates and claim severities. Estimation of losses is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment and the current and future strength of local housing markets; exposure on insured loans; the amount of time between delinquency and claim filing (all else being equal, the longer the period between delinquency and claim filing, the greater the severity); and curtailments and rescissions. The actual amount of the claim payments may be substantially different than our loss reserve estimates. Our estimates could be adversely affected by several factors, including a deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrowers’ income and thus their ability to make mortgage payments, the impact of past and future government initiatives and actions taken by the GSEs (including mortgage forbearance programs and foreclosure moratoriums), and a drop in housing values which may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Loss reserves in future periods will also be dependent on the number of loans reported to us as delinquent. Changes to our estimates could result in a material impact to our consolidated results of operations and financial position, even in a stable economic environment. Given the uncertainty of the macroeconomic environment, including the effectiveness of loss mitigation efforts, change in home prices, and changes in unemployment, our loss reserve estimates may continue to be impacted. In considering the potential sensitivity of the factors underlying our estimate of loss reserves, it is possible that even a relatively small change in our estimated claim rate or claim severity could have a material impact on loss reserves and, correspondingly, on our consolidated results of operations even in a stable economic environment. For example, as of September 30, 2022, assuming all other factors remain constant, a $1,000 increase/decrease in the average severity reserve factor would change the loss reserve amount by approximately +/- $11 million. A one percentage point increase/decrease in the average claim rate reserve factor would change the loss reserve amount by approximately +/- $15 million. The “Losses incurred” section of table 11.1 below shows losses incurred on delinquencies that occurred in the current year and in prior years. The amount of losses incurred relating to delinquencies that occurred in the current year represents the estimated amount to be ultimately paid on such delinquencies. The amount of losses incurred relating to delinquencies that occurred in prior years represents the difference between the actual claim rate and claim severity associated with those delinquencies resolved in the current year compared to the estimated claim rate and claim severity at the prior year-end, as well as a re-estimation of amounts to be ultimately paid on delinquencies continuing from the end of the prior year. This re-estimation of the claim rate and claim severity is the result of our review of current trends in the delinquency inventory, such as percentages of delinquencies that have resulted in a claim, the amount of the claims relative to the average loan exposure, changes in the relative level of delinquencies by geography and changes in average loan exposure. Losses incurred on delinquencies that occurred in the current year increased for the nine months ended September 30, 2022, compared to the same period last year. The increase is primarily due to a decrease in IBNR reserve estimates by $5.9 million in the nine months ended September 30, 2021, while IBNR reserve estimates remained flat for the nine months ended September 30, 2022. For the nine months ended September 30, 2022 we experienced favorable loss development of $327.5 million on previously received notices primarily related to a decrease in the estimated claim rate. The favorable development primarily resulted from greater than expected cure rates on delinquencies received during and prior to the COVID-19 pandemic, as forbearance plans and loss mitigation efforts have resulted in more cures than originally estimated. For the nine months ended September 30, 2021 we experienced favorable loss development of $6.0 million on previously received notices primarily due to the decrease in the claim rate on delinquencies received prior to the COVID-19 pandemic. This was offset by the recognition of a probable loss of $6.3 million related to litigation of our claims paying practices and adverse development on LAE reserves and reinsurance. The “Losses paid” section of table 11.1 below shows the amount of losses paid on delinquencies that occurred in the current year and losses paid on delinquencies that occurred in prior years. The foreclosure moratoriums and forbearance plans in place have increased the average time it takes to receive a claim,. Table 11.1 provides a reconciliation of beginning and ending loss reserves as of and for the nine months ended September 30, 2022 and 2021. Development of reserves for losses and loss adjustment expenses Table 11.1 Nine Months Ended September 30, (In thousands) 2022 2021 Reserve at beginning of period $ 883,522 $ 880,537 Less reinsurance recoverable 66,905 95,042 Net reserve at beginning of period 816,617 785,495 Losses incurred: Losses and LAE incurred in respect of delinquency notices received in: Current year 104,086 95,534 Prior years (1) (327,512) (5,968) Total losses incurred (223,426) 89,566 Losses paid: Losses and LAE paid in respect of delinquency notices received in: Current year 116 339 Prior years 36,089 48,842 Total losses paid 36,205 49,181 Net reserve at end of period 556,986 825,880 Plus reinsurance recoverable 46,384 107,029 Reserve at end of period $ 603,370 $ 932,909 (1) A positive number for prior year loss reserve development indicates a deficiency of prior year reserves. A negative number for prior year loss reserve development indicates a redundancy of prior year loss reserves. See the following table for more information about prior year loss reserve development. The prior year loss reserve development for the nine months of September 30, 2022 and 2021 is reflected in table 11.2 below. Reserve development on previously received delinquencies Table 11.2 Nine Months Ended September 30, (In thousands) 2022 2021 Increase (decrease) in estimated claim rate on primary defaults $ (324,556) $ (18,147) Increase (decrease) in estimated severity on primary defaults (18,682) (105) Change in estimates related to pool reserves, LAE reserves, reinsurance, and other 15,726 12,284 Total prior year loss development (1) $ (327,512) $ (5,968) (1) A positive number for prior year loss reserve development indicates a deficiency of prior year loss reserves. A negative number for prior year loss reserve development indicates a redundancy of prior year loss reserves. Delinquency inventory A rollforward of our primary delinquency inventory for the three and nine months ended September 30, 2022 and 2021 appears in table 11.3 below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers. Delinquency inventory rollforward Table 11.3 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Delinquency inventory at beginning of period 26,855 42,999 33,290 57,710 New notices 10,990 9,862 31,089 31,909 Cures (11,494) (14,813) (37,371) (50,901) Paid claims (337) (298) (978) (956) Rescissions and denials (11) (11) (27) (23) Other items removed from inventory (125) (360) (125) (360) Delinquency inventory at end of period 25,878 37,379 25,878 37,379 During the three and nine months ended September 30, 2022 and 2021, our losses paid included amounts paid upon commutation of coverage of pools of non-performing loans (“NPLs”). As a result of these payments, 125 and 360 delinquencies, were removed from delinquency inventory with an amount paid of $1.6 million and $6.7 million for 2022 and 2021, respectively. Table 11.4 below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim. Primary delinquency inventory - consecutive months delinquent Table 11.4 September 30, 2022 December 31, 2021 September 30, 2021 3 months or less 7,825 7,586 6,948 4-11 months 7,619 7,990 9,371 12 months or more (1) 10,434 17,714 21,060 Total 25,878 33,290 37,379 3 months or less 30 % 23 % 19 % 4-11 months 30 % 24 % 25 % 12 months or more 40 % 53 % 56 % Total 100 % 100 % 100 % Primary claims received inventory included in ending delinquent inventory 244 211 154 (1) Approximately 33%, 20%, and 17% of the primary delinquency inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of September 30, 2022, December 31, 2021, and September 30, 2021, respectively. COVID-19 Pandemic Delinquencies We experienced an increase in new delinquency notices in the second and third quarters of 2020 because of the impacts of the COVID-19 pandemic, including the high level of unemployment and economic uncertainty resulting from measures to reduce the transmission of COVID-19. Forbearance programs enacted by the GSEs provided for payment forbearance on mortgages to borrowers experiencing a hardship during the COVID-19 pandemic. Historically, forbearance plans have reduced the incidence of our losses on affected loans. Through September 30, 2022 the vast majority of the delinquencies received in the second and third quarter of 2020 have cured. Premium refunds Our estimate of premiums to be refunded on expected claim payments is accrued for separately in “Other Liabilities” on our consolidated balance sheets and approximated $28.1 million and $37.3 million at September 30, 2022 and December 31, 2021, respectively. The decrease is primarily due to a decrease in the delinquency inventory. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Change in Accounting Policy As of January 1, 2021, we adopted the updated guidance for "A ccounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. The application of this guidance resulted in a $68.3 million cumulative effect adjustment to our 2021 beginning retained earnings and paid in capital to reflect the 9% Debentures as if we had always accounted for the debt as a liability in its entirety. Share repurchase programs Repurchases of our common stock may be made from time to time on the open market (including through 10b5-1 plans) or through privately negotiated transactions. In the first nine months of 2022, we repurchased 21.7 million shares at an average cost of $14.10 per share, which included commissions. In 2021, we repurchased approximately 19.0 million shares of our common stock, at an average cost of $15.30 per share, which included commissions. At September 30, 2022 we had $194 million remaining under a share repurchase program approved by our Board of Directors in 2021 that expires at year end 2023. In October 2022, we repurchased an additional 2.6 million shares totaling $33.2 million under the remaining authorization. Cash dividends |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. Awards under our plans generally vest over periods ranging from one Table 13.1 shows the number of restricted stock units (RSUs) granted to employees and non-employee directors and the weighted average fair value per share during the periods presented (shares in thousands). Restricted stock unit grants Table 13.1 Nine months ended September 30, 2022 2021 RSUs Granted (in thousands) Weighted Average Share Fair Value RSUs Granted (in thousands) Weighted Average Share Fair Value RSUs subject to performance conditions (1) 848 $ 15.46 966 $ 12.82 RSUs subject only to service conditions 319 15.45 398 12.82 Non-employee director RSUs 104 15.32 — — (1) Shares granted are subject to performance conditions under which the target number of shares granted may vest up to 200%. |
Statutory Information
Statutory Information | 3 Months Ended |
Sep. 30, 2022 | |
Statutory Capital [Abstract] | |
Insurance Disclosure | Statutory Information Statutory Capital Requirements The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to the RIF (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements” and, together with the GSE Financial Requirements, as the “Financial Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a minimum policyholder position (“MPP”). MGIC’s “policyholder position” includes its net worth or surplus, and its contingency loss reserve. At September 30, 2022, MGIC’s risk-to-capital ratio was 9.4 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.7 billion above the required MPP of $2.0 billion. The calculation of our risk-to-capital ratio and MPP reflect credit for the risk ceded under our reinsurance transactions. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the financial requirements of the PMIERs, MGIC may terminate the reinsurance agreements, without penalty. Dividend restrictions In the nine months ended September 30, 2022, MGIC paid a $400 million dividend to our holding company. In November, 2022, MGIC paid a $400 million dividend to our holding company. MGIC is subject to statutory regulations as to payment of dividends. The maximum amount of dividends that MGIC may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory ‘policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three two The OCI recognizes only statutory accounting principles prescribed, or practices permitted by the State of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company. The OCI has adopted certain prescribed accounting practices that differ from those found in other states. Specifically, Wisconsin domiciled companies record changes in the contingency loss reserves through their income statement as a change in underwriting deduction. As a result, in periods in which MGIC is increasing contingency loss reserves, statutory net income is reduced. Statutory Financial Information The statutory net income, policyholders’ surplus, and contingency reserve liability of our insurance subsidiaries, including MGIC, are shown in table 14.1. Financial information of our insurance subsidiaries (including MGIC) Table 14.1 As of and for the Nine Months Ended September 30, (In thousands) 2022 2021 Statutory net income $ 284,084 $ 194,614 Statutory policyholders' surplus 1,231,992 1,354,268 Contingency reserve 4,533,371 3,987,786 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentations (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Prospective Accounting Standards | Prospective Accounting Standards Table 2.1 shows the relevant new amendments to accounting standards, which are not yet effective or adopted. Standard / Interpretation Table 2.1 Amended Standards Effective date ASC 944 Long-Duration Contracts • ASU 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts January 1, 2023 Targeted Improvements for Long Duration Contracts: ASU 2018-12 In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies the amortization of deferred insurance policy acquisition costs. It also provides updates to the recognition, measurement, presentation and disclosure requirements for long duration contracts, which generally do not apply to mortgage insurance. The updated guidance requires deferred acquisition costs to be amortized on a constant level basis over the expected term of the related contracts, versus in proportion to premium, gross profits, or gross margins. In November 2020, FASB issued ASU 2020-11 deferring the effective date, so that it applies for annual periods beginning after December 15, 2022, including interim periods within those annual periods. We are currently evaluating the impacts the adoption of this guidance will have on our consolidated financial statements, but do not expect it to have a material impact. |
Significant Accounting Polici_3
Significant Accounting Policies Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | Table 2.1 shows the relevant new amendments to accounting standards, which are not yet effective or adopted. Standard / Interpretation Table 2.1 Amended Standards Effective date ASC 944 Long-Duration Contracts • ASU 2018-12 - Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts January 1, 2023 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-term debt | The aggregate carrying values of our long-term debt obligations and their par values, if different, as of September 30, 2022 and December 31, 2021 are presented in table 3.1 below. Long-term debt obligations Table 3.1 (In millions) September 30, 2022 December 31, 2021 FHLB Advance - 1.91%, due February 2023 $ — $ 155.0 5.75% Notes, due August 2023 — 241.3 5.25% Notes, due August 2028 (par value: $650 million) 641.4 640.2 9% Debentures, due April 2063 (1) 21.3 110.2 Long-term debt, carrying value $ 662.7 $ 1,146.7 (1) Convertible at any time prior to maturity at the holder’s option, at a conversion rate, which is subject to adjustment, of 76.5496 shares per $1,000 principal amount, representing a conversion price of approximately $13.06 per share. The payment of dividends by our holding company results in adjustments to the conversion rate, with such adjustments generally deferred until the end of the year. |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
Effect of reinsurance transactions | The effect of all of our reinsurance agreements on premiums earned and losses incurred is shown in table 4.1 below. Reinsurance Table 4.1 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Premiums earned: Direct $ 289,072 $ 287,223 $ 864,191 $ 876,541 Assumed 2,254 2,660 6,501 7,551 Ceded - quota share reinsurance (1) (19,348) (22,911) (56,721) (90,284) Ceded - excess-of-loss reinsurance (19,867) (12,128) (50,923) (32,380) Total ceded (39,215) (35,039) (107,644) (122,664) Net premiums earned $ 252,111 $ 254,844 $ 763,048 $ 761,428 Losses incurred: Direct $ (112,435) $ 17,265 $ (242,861) $ 103,319 Assumed 21 (97) (340) (43) Ceded - quota share reinsurance 7,360 3,598 19,775 (13,710) Losses incurred, net $ (105,054) $ 20,766 $ (223,426) $ 89,566 Other Reinsurance Impacts: Profit commission on quota share reinsurance (1) $ 47,255 $ 45,078 $ 135,049 $ 108,000 Ceding commission on quota share reinsurance 13,321 13,599 38,355 39,657 (1) Ceded premiums earned net of profit commission. |
Schedule Of Quota Share Reinsurance Transactions | Table 4.2 below provides additional detail regarding our QSR Transactions. Quota Share Reinsurance Table 4.2 Quota Share Contract Covered Policy Years Quota Share % Annual Loss Ratio to Exhaust Profit Commission (1) Contractual Termination Date 2015 QSR Prior to 2017 15.0 % 68.0 % December 31, 2031 2019 QSR 2019 30.0 % 62.0 % December 31, 2030 2020 QSR 2020 12.5 % 62.0 % December 31, 2031 2020 QSR and 2021 QSR 2020 17.5 % 62.0 % December 31, 2032 2020 QSR and 2021 QSR 2021 17.5 % 61.9 % December 31, 2032 2021 QSR and 2022 QSR 2021 12.5 % 57.5 % December 31, 2032 2021 QSR and 2022 QSR 2022 15.0 % 57.5 % December 31, 2033 2022 QSR and 2023 QSR 2022 15.0 % 62.0 % December 31, 2033 2022 QSR and 2023 QSR 2023 15.0 % 62.0 % December 31, 2034 Credit Union QSR (2) 2020-2025 65.0 % 50.0 % December 31, 2039 (1) We will receive a profit commission provided the annual loss ratio on policies covered under the transaction remains below this ratio. (2) Eligible credit union business written before April 1, 2020 was covered by our 2019 and 2015 QSR Transactions. Table 4.3 provides additional detail regarding optional termination dates and optional reductions to our quota share percentage which can, in each case, be elected by us for a fee. Under the optional reduction to the quota share percentage, we may reduce our quota share percentage from the original percentage shown in table 4.2 to the percentage shown in table 4.3. Quota Share Reinsurance Table 4.3 Quota Share Contract Covered Policy Years Optional Termination Date (1) Optional Quota Share % Reduction Date (2) Optional Reduced Quota Share % 2015 QSR Prior to 2017 December 31, 2022 NA NA 2019 QSR 2019 December 31, 2022 January 1, 2023 25% or 20% 2020 QSR 2020 December 31, 2022 January 1, 2023 10.5% or 8% 2020 QSR and 2021 QSR 2020 December 31, 2022 January 1, 2023 14.5% or 12% 2020 QSR and 2021 QSR 2021 December 31, 2023 January 1, 2023 14.5% or 12% 2021 QSR and 2022 QSR 2021 December 31, 2023 January 1, 2023 10.5% or 8% 2021 QSR and 2022 QSR 2022 December 31, 2024 July 1, 2023 12.5% or 10% 2022 QSR and 2023 QSR 2022 December 31, 2024 July 1, 2023 12.5% or 10% 2022 QSR and 2023 QSR 2023 December 31, 2025 July 1, 2024 12.5% or 10% (1) We can elect early termination of the QSR Transaction beginning on this date, and bi-annually thereafter. |
Schedule of coverages and retention | Tables 4.4a and 4.4b provide a summary of our Home Re Transactions as of September 30, 2022 and December 31, 2021. Excess of Loss Reinsurance - Home Re Transactions 4.4a ($ in thousands) Issue Date Policy In force Dates Optional Call Date (1) Legal Maturity Initial First Layer Retention Initial Excess of Loss Reinsurance Coverage Home Re 2022-1, Ltd. April 26, 2022 May 29, 2021 - December 31, 2021 April 25, 2028 12.5 years $325,589 $473,575 Home Re 2021-2, Ltd. August 3, 2021 January 1, 2021 - May 28, 2021 July 25, 2028 12.5 years 190,159 398,429 Home Re 2021-1, Ltd. February 2, 2021 August 1, 2020 - December 31, 2020 January 25, 2028 12.5 years 211,159 398,848 Home Re 2020-1, Ltd. October 29, 2020 January 1, 2020 - July 31, 2020 October 25, 2027 10 years 275,283 412,917 Home Re 2019-1, Ltd. May 25, 2019 January 1, 2018 - March 31, 2019 May 25, 2026 10 years 185,730 315,739 Home Re 2018-1, Ltd. October 30, 2018 July 1, 2016 - December 31, 2017 October 25, 2025 10 years 168,691 318,636 (1) We have the right to terminate the Home Re Transactions under certain circumstances and on any payment date on or after the respective Optional Call Date. 4.4b Remaining First Layer Retention Remaining Excess of Loss Reinsurance Coverage ($ in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Home Re 2022-1, Ltd. $ 325,589 $ — $ 473,575 $ — Home Re 2021-2, Ltd. 190,135 190,159 367,702 398,429 Home Re 2021-1, Ltd. 211,117 211,142 306,243 387,830 Home Re 2020-1, Ltd. 275,154 275,204 133,120 234,312 Home Re 2019-1, Ltd. 183,691 183,917 208,146 208,146 Home Re 2018-1, Ltd. 165,028 165,365 162,305 218,343 |
Schedule of total assets of Home Re | Table 4.5 presents the total assets of the Home Re Entities as of September 30, 2022 and December 31, 2021. Home Re total assets Table 4.5 (In thousands) Home Re Entity Total VIE Assets September 30, 2022 Home Re 2022-1 Ltd. $ 473,575 Home Re 2021-2 Ltd. 372,715 Home Re 2021-1 Ltd. 317,891 Home Re 2020-1 Ltd. 141,508 Home Re 2019-1 Ltd. 208,146 Home Re 2018-1 Ltd. 169,157 December 31, 2021 Home Re 2021-2 Ltd. $ 398,429 Home Re 2021-1 Ltd. 398,848 Home Re 2020-1 Ltd. 251,387 Home Re 2019-1 Ltd. 208,146 Home Re 2018-1 Ltd. 218,343 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Calculation of earnings (loss) per share | Table 6.1 reconciles the numerators and denominators used to calculate basic and diluted EPS. Earnings per share Table 6.1 Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2022 2021 2022 2021 Basic earnings per share: Net income $ 249,625 $ 157,977 $ 673,906 $ 461,049 Weighted average common shares outstanding - basic 302,622 335,938 309,097 338,045 Basic earnings per share $ 0.82 $ 0.47 $ 2.18 $ 1.36 Diluted earnings per share: Net income $ 249,625 $ 157,977 $ 673,906 $ 461,049 Interest expense, net of tax (1): 9% Debentures 620 3,712 2,851 11,135 Diluted income available to common shareholders $ 250,245 $ 161,689 $ 676,757 $ 472,184 Weighted average common shares outstanding - basic 302,622 335,938 309,097 338,045 Effect of dilutive securities: Unvested RSUs 1,902 1,834 1,848 1,651 9% Debentures 2,670 15,785 4,084 15,785 Weighted average common shares outstanding - diluted 307,194 353,557 315,029 355,481 Diluted earnings per share $ 0.81 $ 0.46 $ 2.15 $ 1.33 (1) Interest expense for the three and nine months ended September 30, 2022 and 2021, respectively, has been tax effected at a rate of 21%. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Amortized cost, gross unrealized gains and losses and fair value of fixed income securities | Our fixed income securities classified as available-for-sale at September 30, 2022 and December 31, 2021 are shown in tables 7.1a and 7.1b below. Details of fixed income securities by category as of September 30, 2022 Table 7.1a (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 180,941 $ 25 $ (10,294) $ 170,672 Obligations of U.S. states and political subdivisions 2,414,505 1,700 (265,167) 2,151,038 Corporate debt securities 2,393,106 148 (227,409) 2,165,845 ABS 134,309 5 (5,819) 128,495 RMBS 230,997 15 (28,372) 202,640 CMBS 266,711 14 (21,080) 245,645 CLOs 337,827 — (12,329) 325,498 Foreign government debt 4,486 — (914) 3,572 Commercial paper 7,577 — — 7,577 Total fixed income securities $ 5,970,459 $ 1,907 $ (571,384) $ 5,400,982 Details of fixed income securities by category as of December 31, 2021 Table 7.1b (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 133,990 $ 285 $ (868) $ 133,407 Obligations of U.S. states and political subdivisions 2,408,688 133,361 (7,396) 2,534,653 Corporate debt securities 2,704,586 75,172 (13,776) 2,765,982 ABS 150,888 830 (1,008) 150,710 RMBS 309,991 2,397 (3,278) 309,110 CMBS 315,330 5,736 (1,936) 319,130 CLOs 360,436 609 (106) 360,939 Foreign government debt 13,749 — (99) 13,650 Total fixed income securities $ 6,397,658 $ 218,390 $ (28,467) $ 6,587,581 |
Amortized cost and fair values of fixed income securities by contractual maturity | The amortized cost and fair values of fixed income securities at September 30, 2022, by contractual maturity, are shown in table 7.2 below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most ABS, RMBS, CMBS, and CLOs provide for periodic payments throughout their lives, they are listed in separate categories. Fixed income securities maturity schedule Table 7.2 September 30, 2022 (In thousands) Amortized cost Fair Value Due in one year or less $ 422,546 $ 416,536 Due after one year through five years 1,413,885 1,334,284 Due after five years through ten years 1,814,408 1,614,687 Due after ten years 1,349,776 1,133,197 5,000,615 4,498,704 ABS 134,309 128,495 RMBS 230,997 202,640 CMBS 266,711 245,645 CLOs 337,827 325,498 Total as of September 30, 2022 $ 5,970,459 $ 5,400,982 |
Cost and fair value of investments in equity securities | The cost and fair value of investments in equity securities at September 30, 2022 and December 31, 2021 are shown in tables 7.3a and 7.3b below. Details of equity security investments as of September 30, 2022 Table 7.3a (In thousands) Cost Gross Gains Gross Losses Fair Value Equity securities $ 16,006 $ — $ (2,121) $ 13,885 Details of equity security investments as of December 31, 2021 Table 7.3b (In thousands) Cost Gross Gains Gross Losses Fair Value Equity securities $ 15,838 $ 264 $ (34) $ 16,068 |
Schedule of realized gains (losses) and proceeds from sale of securities | The net gains (losses) on investments and other financial instruments and the proceeds from the sale of fixed income securities classified as available-for-sale are shown in table 7.4 below. Details of net gains (losses) on investments and other financial instruments Table 7.4 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Fixed income securities Gains on sales 1,667 1,389 6,788 6,680 Losses on sales (7,040) (259) (12,790) (1,004) Change in credit allowance — (1) — 48 Impairments (1,415) — (1,415) — Equity securities gains (losses) (617) (108) (2,351) (308) Change in embedded derivative on Home Re Transactions 4,199 (397) 983 376 Other (52) (12) 9 (19) Net gains (losses) on investments and other financial instruments (3,258) 612 (8,776) 5,773 Proceeds from sales of fixed income securities 125,186 106,765 388,740 246,827 |
Aging of the fair values of securities in an unrealized loss position | Tables 7.5a and 7.5b below summarize, for all available-for-sale investments in an unrealized loss position at September 30, 2022 and December 31, 2021, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in tables 7.5a and 7.5b are estimated using the process described in Note 8 - “Fair Value Measurements” to these consolidated financial statements and in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2021 Annual Report on Form 10-K. Unrealized loss aging for securities by type and length of time as of September 30, 2022 Table 7.5a Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 91,057 $ (4,565) $ 52,868 $ (5,729) $ 143,925 $ (10,294) Obligations of U.S. states and political subdivisions 1,993,265 (229,380) 122,240 (35,787) 2,115,505 (265,167) Corporate debt securities 1,897,128 (164,708) 307,124 (62,701) 2,204,252 (227,409) ABS 96,910 (3,741) 32,673 (2,078) 129,583 (5,819) RMBS 124,775 (13,598) 93,453 (14,774) 218,228 (28,372) CMBS 183,053 (13,797) 66,755 (7,283) 249,808 (21,080) CLOs 266,139 (9,355) 59,359 (2,974) 325,498 (12,329) Foreign government debt — — 3,572 (914) 3,572 (914) Total $ 4,652,327 $ (439,144) $ 738,044 $ (132,240) $ 5,390,371 $ (571,384) Unrealized loss aging for securities by type and length of time as of December 31, 2021 Table 7.5b Less Than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 91,154 $ (790) $ 2,616 $ (78) $ 93,770 $ (868) Obligations of U.S. states and political subdivisions 452,021 (7,189) 15,540 (207) 467,561 (7,396) Corporate debt securities 865,085 (13,260) 10,997 (516) 876,082 (13,776) ABS 100,064 (998) 1,552 (10) 101,616 (1,008) RMBS 180,586 (2,548) 31,641 (730) 212,227 (3,278) CMBS 89,889 (1,887) 1,511 (49) 91,400 (1,936) CLOs 177,663 (71) 21,973 (35) 199,636 (106) Foreign government debt 13,649 (99) — — 13,649 (99) Total $ 1,970,111 $ (26,842) $ 85,830 $ (1,625) $ 2,055,941 $ (28,467) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements for items measured at fair value | Assets measured at fair value, by hierarchy level, as of September 30, 2022 and December 31, 2021 are shown in tables 8.1a and 8.1b below. The fair value of the assets is estimated using the process described above, and more fully in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2021 Annual Report on Form 10-K. Assets carried at fair value by hierarchy level as of September 30, 2022 Table 8.1a (In thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 170,672 $ 151,741 $ 18,931 Obligations of U.S. states and political subdivisions 2,151,038 — 2,151,038 Corporate debt securities 2,165,845 — 2,165,845 ABS 128,495 — 128,495 RMBS 202,640 — 202,640 CMBS 245,645 — 245,645 CLOs 325,498 — 325,498 Foreign government debt 3,572 — 3,572 Commercial paper 7,577 — 7,577 Total fixed income securities 5,400,982 151,741 5,249,241 Equity securities 13,885 13,885 — Cash equivalents 236,940 198,397 38,543 Total $ 5,651,807 $ 364,023 $ 5,287,784 Assets carried at fair value by hierarchy level as of December 31, 2021 Table 8.1b (In thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 133,407 $ 102,153 $ 31,254 Obligations of U.S. states and political subdivisions 2,534,653 — 2,534,653 Corporate debt securities 2,765,982 — 2,765,982 ABS 150,710 — 150,710 RMBS 309,110 — 309,110 CMBS 319,130 — 319,130 CLOs 360,939 — 360,939 Foreign government debt 13,650 — 13,650 Total fixed income securities 6,587,581 102,153 6,485,428 Equity securities 16,068 16,068 — Cash equivalents 254,230 254,230 — Total $ 6,857,879 $ 372,451 $ 6,485,428 |
Carrying value and fair value of financial assets and liabilities | Table 8.2 presents the carrying value and fair value of our financial assets and liabilities disclosed, but not carried, at fair value at September 30, 2022 and December 31, 2021. Financial assets and liabilities not measured at fair value Table 8.2 September 30, 2022 December 31, 2021 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Financial assets Other invested assets $ 850 $ 850 $ 3,100 $ 3,100 Financial liabilities FHLB Advance — — 155,000 157,585 5.75% Senior Notes — — 241,255 256,213 5.25% Senior Notes 641,357 580,931 640,253 686,875 9% Convertible Junior Subordinated Debentures 21,296 28,475 110,204 151,000 Total financial liabilities $ 662,653 $ 609,406 $ 1,146,712 $ 1,251,673 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other comprehensive income | The pretax and related income tax benefit (expense) components of our other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021 are included in table 9.1 below. Components of other comprehensive income (loss) Table 9.1 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Net unrealized investment (losses) gains arising during the period $ (194,449) $ (34,937) $ (759,409) $ (97,057) Total income tax benefit (expense) 40,834 7,337 159,476 20,382 Net of taxes (153,615) (27,600) (599,933) (76,675) Net changes in benefit plan assets and obligations (20,471) 7,548 (19,353) 9,492 Total income tax benefit (expense) 4,299 (1,585) 4,064 (1,993) Net of taxes (16,172) 5,963 (15,289) 7,499 Total other comprehensive income (loss) (214,920) (27,389) (778,762) (87,565) Total income tax benefit (expense) 45,133 5,752 163,540 18,389 Total other comprehensive income (loss), net of tax $ (169,787) $ (21,637) $ (615,222) $ (69,176) |
Reclassification out of accumulated other comprehensive income | The pretax and related income tax benefit (expense) components of the amounts reclassified from our accumulated other comprehensive income (loss) (“AOCI”) to our consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 are included in table 9.2 below. Reclassifications from AOCI Table 9.2 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Reclassification adjustment for net realized (losses) gains (1) $ (6,681) $ 1,045 $ (4,273) $ 7,462 Income tax benefit (expense) 1,403 (219) 897 (1,566) Net of taxes (5,278) 826 (3,376) 5,896 Reclassification adjustment related to benefit plan assets and obligations (2) (6,228) (971) (7,346) (2,915) Income tax benefit (expense) 1,308 204 1,543 612 Net of taxes (4,920) (767) (5,803) (2,303) Total reclassifications (12,909) 74 (11,619) 4,547 Income tax benefit (expense) 2,711 (15) 2,440 (954) Total reclassifications, net of tax $ (10,198) $ 59 $ (9,179) $ 3,593 (1) Increases (decreases) Net realized investment gains (losses) on the consolidated statements of operations. (2) Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations. |
Accumulated other comprehensive income (loss) | A rollforward of AOCI for the nine months ended September 30, 2022, including amounts reclassified from AOCI, are included in table 9.3 below. Rollforward of AOCI Table 9.3 Nine Months Ended September 30, 2022 (In thousands) Net unrealized gains and (losses) on available-for-sale securities Net benefit plan assets and (obligations) recognized in shareholders' equity Total accumulated other comprehensive income (loss) Balance at December 31, 2021, net of tax $ 150,038 $ (30,341) $ 119,697 Other comprehensive income (loss) before reclassifications (603,309) (21,092) (624,401) Less: Amounts reclassified from AOCI (3,376) (5,803) (9,179) Balance, September 30, 2022, net of tax $ (449,895) $ (45,630) $ (495,525) |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Components of net periodic benefit cost | Tables 10.1 and 10.2 provide the components of net periodic benefit cost for our pension, supplemental executive retirement and other postretirement benefit plans for the three and nine months ended September 30, 2022 and 2021. Components of net periodic benefit cost Table 10.1 Three Months Ended September 30, Pension and Supplemental Executive Retirement Plans Other Postretirement Benefit Plans (In thousands) 2022 2021 2022 2021 Service cost $ 1,813 $ 1,908 $ 327 $ 377 Interest cost 2,863 2,794 173 163 Expected return on plan assets (4,907) (5,229) (2,625) (2,216) Amortization of net actuarial losses (gains) 1,266 1,403 (776) (425) Amortization of prior service cost (credit) (57) (60) 123 53 Settlements and curtailments 5,671 4,732 — — Net periodic benefit cost (benefit) $ 6,649 $ 5,548 $ (2,778) $ (2,048) Components of net periodic benefit cost Table 10.2 Nine Months Ended September 30, Pension and Supplemental Executive Retirement Plans Other Postretirement Benefit Plans (In thousands) 2022 2021 2022 2021 Service cost $ 5,439 $ 5,724 $ 981 $ 1,131 Interest cost 8,588 8,383 521 487 Expected return on plan assets (14,723) (15,687) (7,876) (6,647) Amortization of net actuarial losses (gains) 3,798 4,208 (2,328) (1,273) Amortization of prior service cost (credit) (163) (179) 367 159 Settlements and curtailments 5,671 4,732 — — Net periodic benefit cost (benefit) $ 8,610 $ 7,181 $ (8,335) $ (6,143) |
Loss Reserves (Tables)
Loss Reserves (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Insurance Loss Reserves [Abstract] | |
Reconciliation of beginning and ending loss reserves | Table 11.1 provides a reconciliation of beginning and ending loss reserves as of and for the nine months ended September 30, 2022 and 2021. Development of reserves for losses and loss adjustment expenses Table 11.1 Nine Months Ended September 30, (In thousands) 2022 2021 Reserve at beginning of period $ 883,522 $ 880,537 Less reinsurance recoverable 66,905 95,042 Net reserve at beginning of period 816,617 785,495 Losses incurred: Losses and LAE incurred in respect of delinquency notices received in: Current year 104,086 95,534 Prior years (1) (327,512) (5,968) Total losses incurred (223,426) 89,566 Losses paid: Losses and LAE paid in respect of delinquency notices received in: Current year 116 339 Prior years 36,089 48,842 Total losses paid 36,205 49,181 Net reserve at end of period 556,986 825,880 Plus reinsurance recoverable 46,384 107,029 Reserve at end of period $ 603,370 $ 932,909 (1) A positive number for prior year loss reserve development indicates a deficiency of prior year reserves. A negative number for prior year loss reserve development indicates a redundancy of prior year loss reserves. See the following table for more information about prior year loss reserve development. |
Prior year development of the reserves | The prior year loss reserve development for the nine months of September 30, 2022 and 2021 is reflected in table 11.2 below. Reserve development on previously received delinquencies Table 11.2 Nine Months Ended September 30, (In thousands) 2022 2021 Increase (decrease) in estimated claim rate on primary defaults $ (324,556) $ (18,147) Increase (decrease) in estimated severity on primary defaults (18,682) (105) Change in estimates related to pool reserves, LAE reserves, reinsurance, and other 15,726 12,284 Total prior year loss development (1) $ (327,512) $ (5,968) (1) A positive number for prior year loss reserve development indicates a deficiency of prior year loss reserves. A negative number for prior year loss reserve development indicates a redundancy of prior year loss reserves. |
Rollforward of primary delinquent inventory | A rollforward of our primary delinquency inventory for the three and nine months ended September 30, 2022 and 2021 appears in table 11.3 below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers. Delinquency inventory rollforward Table 11.3 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Delinquency inventory at beginning of period 26,855 42,999 33,290 57,710 New notices 10,990 9,862 31,089 31,909 Cures (11,494) (14,813) (37,371) (50,901) Paid claims (337) (298) (978) (956) Rescissions and denials (11) (11) (27) (23) Other items removed from inventory (125) (360) (125) (360) Delinquency inventory at end of period 25,878 37,379 25,878 37,379 |
Aging of the primary delinquent inventory | Table 11.4 below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim. Primary delinquency inventory - consecutive months delinquent Table 11.4 September 30, 2022 December 31, 2021 September 30, 2021 3 months or less 7,825 7,586 6,948 4-11 months 7,619 7,990 9,371 12 months or more (1) 10,434 17,714 21,060 Total 25,878 33,290 37,379 3 months or less 30 % 23 % 19 % 4-11 months 30 % 24 % 25 % 12 months or more 40 % 53 % 56 % Total 100 % 100 % 100 % Primary claims received inventory included in ending delinquent inventory 244 211 154 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation, activity | Table 13.1 shows the number of restricted stock units (RSUs) granted to employees and non-employee directors and the weighted average fair value per share during the periods presented (shares in thousands). Restricted stock unit grants Table 13.1 Nine months ended September 30, 2022 2021 RSUs Granted (in thousands) Weighted Average Share Fair Value RSUs Granted (in thousands) Weighted Average Share Fair Value RSUs subject to performance conditions (1) 848 $ 15.46 966 $ 12.82 RSUs subject only to service conditions 319 15.45 398 12.82 Non-employee director RSUs 104 15.32 — — (1) Shares granted are subject to performance conditions under which the target number of shares granted may vest up to 200%. |
Statutory Information Statutory
Statutory Information Statutory Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Statutory Capital [Abstract] | |
Summary of amounts disclosed under statutory accounting practices | The statutory net income, policyholders’ surplus, and contingency reserve liability of our insurance subsidiaries, including MGIC, are shown in table 14.1. Financial information of our insurance subsidiaries (including MGIC) Table 14.1 As of and for the Nine Months Ended September 30, (In thousands) 2022 2021 Statutory net income $ 284,084 $ 194,614 Statutory policyholders' surplus 1,231,992 1,354,268 Contingency reserve 4,533,371 3,987,786 |
Debt - Summary of Debt Obligati
Debt - Summary of Debt Obligations (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 662,700,000 | $ 1,146,700,000 |
Federal Home Loan Bank Advances (FHLB) | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 0 | 155,000,000 |
Stated interest rate | 1.91% | |
Senior Notes | 5.75% Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 0 | 241,300,000 |
Stated interest rate | 5.75% | |
Senior Notes | 5.25% Senior Notes Due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 641,400,000 | 640,200,000 |
Stated interest rate | 5.25% | |
Debt instrument, face amount | $ 650,000,000 | |
9% Convertible Junior Subordinated Debentures | ||
Debt Instrument [Line Items] | ||
Long-term debt, carrying value | $ 21,300,000 | $ 110,200,000 |
Stated interest rate | 9% |
Debt - Narrative (Details)
Debt - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | $ 11,632,000 | $ 0 | $ 40,130,000 | $ 0 | ||
Total interest payments | $ 52,700,000 | $ 60,000,000 | ||||
9% Convertible Junior Subordinated Debentures | ||||||
Debt Instrument [Line Items] | ||||||
Conversion rate (in shares per $1,000 note) | 0.0765496 | |||||
Principal amount of notes used in determining conversion rate | $ 1,000 | $ 1,000 | ||||
Convertible debt, conversion price (in dollars per share) | $ / shares | $ 13.06 | $ 13.06 | ||||
Stated interest rate | 9% | 9% | ||||
Extinguishment of debt, amount | $ 88,900,000 | |||||
Repurchases of convertible junior subordinated debentures | 120,900,000 | |||||
Loss on debt extinguishment | $ 32,000,000 | |||||
Reduction in potentially dilutive shares due to debt extinguishment | shares | 6.8 | |||||
Senior Notes | 5.75% Senior Notes Due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 5.75% | 5.75% | ||||
Redemption of senior notes | $ 248,400,000 | |||||
Loss on debt extinguishment | $ 6,800,000 | |||||
Senior Notes | 5.25% Senior Notes Due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 5.25% | 5.25% | ||||
Federal Home Loan Bank Advances (FHLB) | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 1.91% | 1.91% | ||||
Loss on debt extinguishment | $ 1,300,000 | |||||
Federal Home Loan Bank advance prepayment amount | $ 156,300,000 |
Reinsurance - Summary of Premiu
Reinsurance - Summary of Premiums Earned and Losses Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Premiums earned: | ||||
Direct | $ 289,072 | $ 287,223 | $ 864,191 | $ 876,541 |
Assumed | 2,254 | 2,660 | 6,501 | 7,551 |
Ceded | (39,215) | (35,039) | (107,644) | (122,664) |
Net premiums earned | 252,111 | 254,844 | 763,048 | 761,428 |
Losses incurred: | ||||
Direct | (112,435) | 17,265 | (242,861) | 103,319 |
Assumed | 21 | (97) | (340) | (43) |
Ceded | 7,360 | 3,598 | 19,775 | (13,710) |
Losses incurred, net | (105,054) | 20,766 | (223,426) | 89,566 |
Quota Share Reinsurance Transactions | ||||
Premiums earned: | ||||
Ceded | (19,348) | (22,911) | (56,721) | (90,284) |
Losses incurred: | ||||
Ceded | 7,360 | 3,598 | 19,775 | (13,710) |
Profit commission on reinsurance | 47,255 | 45,078 | 135,049 | 108,000 |
Ceding commission on reinsurance | 13,321 | 13,599 | 38,355 | 39,657 |
Excess of Loss Reinsurance Transactions | ||||
Premiums earned: | ||||
Ceded | $ (19,867) | $ (12,128) | $ (50,923) | $ (32,380) |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverable on paid losses | $ 214 | $ 36,275 | ||
Reinsurance recoverable on loss reserves | 46,384 | 66,905 | $ 107,029 | $ 95,042 |
Reinsurance Coverage, Traditional XOL Transaction | ||||
Effects of Reinsurance [Line Items] | ||||
Excess of loss reinsurance coverage | $ 175,000 | |||
Approximate contractual termination term | 10 years | |||
Optional termination term | 7 years | |||
Home Re special purpose insurers | ||||
Effects of Reinsurance [Line Items] | ||||
Percent of total trust assets invested in cash or direct U.S. federal government obligations | 99.50% | |||
Quota Share Reinsurance Transactions | ||||
Effects of Reinsurance [Line Items] | ||||
Ceding commission, percentage (as a percent) | 20% | |||
Reinsurance, quote share reinsurance agreement, annual loss ratio cap (as a percent) | 300% | |||
Reinsurance, quota reinsurance agreement, lifetime loss ratio cap (as a percent) | 200% | |||
Threshold for private mortgage insurer eligibility requirements for termination election (less than) (as a percent) | 90% | |||
Reinsurance recoverable on loss reserves | $ 46,400 | 66,900 | ||
Credit Union QSR Transaction | ||||
Effects of Reinsurance [Line Items] | ||||
Threshold for private mortgage insurer eligibility requirements for termination election (less than) (as a percent) | 80% | |||
QSR Transactions, 2017 & 2018 | ||||
Effects of Reinsurance [Line Items] | ||||
Reinsurance recoverable on paid losses | $ 36,000 | |||
Aggregate Excess of Loss Reinsurance Transactions, Home Re | Minimum | ||||
Effects of Reinsurance [Line Items] | ||||
Amortization period excess of loss reinsurance coverage | 10 years | |||
Aggregate Excess of Loss Reinsurance Transactions, Home Re | Maximum | ||||
Effects of Reinsurance [Line Items] | ||||
Amortization period excess of loss reinsurance coverage | 12 years 6 months |
Reinsurance - Quota Share Trans
Reinsurance - Quota Share Transactions Terms (Details) | 9 Months Ended |
Sep. 30, 2022 | |
2015 QSR | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 15% |
Loss ratio threshold for profit commissions (as a percent) | 68% |
2019 QSR | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 30% |
Loss ratio threshold for profit commissions (as a percent) | 62% |
Cede rate, option 1 (as a percent) | 25% |
Cede rate, option 2 (as a percent) | 20% |
2020 QSR | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 12.50% |
Loss ratio threshold for profit commissions (as a percent) | 62% |
Cede rate, option 1 (as a percent) | 10.50% |
Cede rate, option 2 (as a percent) | 8% |
2020 and 2021 QSR - 2020 NIW | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 17.50% |
Loss ratio threshold for profit commissions (as a percent) | 62% |
Cede rate, option 1 (as a percent) | 14.50% |
Cede rate, option 2 (as a percent) | 12% |
2020 and 2021 QSR - 2021 NIW | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 17.50% |
Loss ratio threshold for profit commissions (as a percent) | 61.90% |
Cede rate, option 1 (as a percent) | 14.50% |
Cede rate, option 2 (as a percent) | 12% |
2021 and 2022 QSR - 2021 NIW | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 12.50% |
Loss ratio threshold for profit commissions (as a percent) | 57.50% |
Cede rate, option 1 (as a percent) | 10.50% |
Cede rate, option 2 (as a percent) | 8% |
2021 and 2022 QSR - 2022 NIW | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 15% |
Loss ratio threshold for profit commissions (as a percent) | 57.50% |
Cede rate, option 1 (as a percent) | 12.50% |
Cede rate, option 2 (as a percent) | 10% |
2022 and 2023 QSR - 2022 NIW | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 15% |
Loss ratio threshold for profit commissions (as a percent) | 62% |
Cede rate, option 1 (as a percent) | 12.50% |
Cede rate, option 2 (as a percent) | 10% |
2022 and 2023 QSR - 2023 NIW | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 15% |
Loss ratio threshold for profit commissions (as a percent) | 62% |
Cede rate, option 1 (as a percent) | 12.50% |
Cede rate, option 2 (as a percent) | 10% |
Credit Union QSR Transaction | |
Effects of Reinsurance [Line Items] | |
Quota share for all policies covered (as a percent) | 65% |
Loss ratio threshold for profit commissions (as a percent) | 50% |
Reinsurance - Excess of Loss Re
Reinsurance - Excess of Loss Reinsurance (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
Apr. 26, 2022 | Aug. 03, 2021 | Feb. 02, 2021 | Oct. 29, 2020 | May 25, 2019 | Oct. 30, 2018 | Sep. 30, 2022 | Dec. 31, 2021 | |
Home Re 2022-1 | ||||||||
Effects of Reinsurance [Line Items] | ||||||||
Term of mortgage insurance-linked notes | 12 years 6 months | |||||||
Initial first layer retention | $ 325,589 | |||||||
Remaining first layer retention | $ 325,589 | |||||||
Excess of loss reinsurance coverage, initial and remaining | $ 473,575 | 473,575 | ||||||
Home Re 2021-2 | ||||||||
Effects of Reinsurance [Line Items] | ||||||||
Term of mortgage insurance-linked notes | 12 years 6 months | |||||||
Initial first layer retention | $ 190,159 | |||||||
Remaining first layer retention | 190,135 | $ 190,159 | ||||||
Excess of loss reinsurance coverage, initial and remaining | $ 398,429 | 367,702 | 398,429 | |||||
Home Re 2021-1 | ||||||||
Effects of Reinsurance [Line Items] | ||||||||
Term of mortgage insurance-linked notes | 12 years 6 months | |||||||
Initial first layer retention | $ 211,159 | |||||||
Remaining first layer retention | 211,117 | 211,142 | ||||||
Excess of loss reinsurance coverage, initial and remaining | $ 398,848 | 306,243 | 387,830 | |||||
Home Re 2020-1 | ||||||||
Effects of Reinsurance [Line Items] | ||||||||
Term of mortgage insurance-linked notes | 10 years | |||||||
Initial first layer retention | $ 275,283 | |||||||
Remaining first layer retention | 275,154 | 275,204 | ||||||
Excess of loss reinsurance coverage, initial and remaining | $ 412,917 | 133,120 | 234,312 | |||||
Home Re 2019-1 | ||||||||
Effects of Reinsurance [Line Items] | ||||||||
Term of mortgage insurance-linked notes | 10 years | |||||||
Initial first layer retention | $ 185,730 | |||||||
Remaining first layer retention | 183,691 | 183,917 | ||||||
Excess of loss reinsurance coverage, initial and remaining | $ 315,739 | 208,146 | 208,146 | |||||
Home Re 2018-1 | ||||||||
Effects of Reinsurance [Line Items] | ||||||||
Term of mortgage insurance-linked notes | 10 years | |||||||
Initial first layer retention | $ 168,691 | |||||||
Remaining first layer retention | 165,028 | 165,365 | ||||||
Excess of loss reinsurance coverage, initial and remaining | $ 318,636 | $ 162,305 | $ 218,343 |
Reinsurance - Variable Interest
Reinsurance - Variable Interest Entity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Effects of Reinsurance [Line Items] | ||
Assets | $ 6,154,116 | $ 7,325,008 |
Home Re 2022-1 | ||
Effects of Reinsurance [Line Items] | ||
Assets | 473,575 | |
Home Re 2021-2 | ||
Effects of Reinsurance [Line Items] | ||
Assets | 372,715 | 398,429 |
Home Re 2021-1 | ||
Effects of Reinsurance [Line Items] | ||
Assets | 317,891 | 398,848 |
Home Re 2020-1 | ||
Effects of Reinsurance [Line Items] | ||
Assets | 141,508 | 251,387 |
Home Re 2019-1 | ||
Effects of Reinsurance [Line Items] | ||
Assets | 208,146 | 208,146 |
Home Re 2018-1 | ||
Effects of Reinsurance [Line Items] | ||
Assets | $ 169,157 | $ 218,343 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic earnings per share: | ||||
Net income | $ 249,625 | $ 157,977 | $ 673,906 | $ 461,049 |
Weighted average common shares outstanding - basic (in shares) | 302,622 | 335,938 | 309,097 | 338,045 |
Basic earnings per share (in dollars per share) | $ 0.82 | $ 0.47 | $ 2.18 | $ 1.36 |
Diluted earnings per share: | ||||
Net income | $ 249,625 | $ 157,977 | $ 673,906 | $ 461,049 |
Diluted income available to common shareholders | $ 250,245 | $ 161,689 | $ 676,757 | $ 472,184 |
Weighted average common shares outstanding - basic (in shares) | 302,622 | 335,938 | 309,097 | 338,045 |
Effect of dilutive securities: | ||||
Weighted average common shares outstanding - diluted (in shares) | 307,194 | 353,557 | 315,029 | 355,481 |
Diluted earnings per share (in dollars per share) | $ 0.81 | $ 0.46 | $ 2.15 | $ 1.33 |
Federal statutory income tax rate (in hundredths) | 21% | 21% | 21% | 21% |
9% Convertible Junior Subordinated Debentures | ||||
Diluted earnings per share: | ||||
Dilutive securities | $ 620 | $ 3,712 | $ 2,851 | $ 11,135 |
Effect of dilutive securities: | ||||
Dilutive securities (in shares) | 2,670 | 15,785 | 4,084 | 15,785 |
Stated interest rate | 9% | 9% | ||
Unvested RSUs | ||||
Effect of dilutive securities: | ||||
Unvested RSUs (in shares) | 1,902 | 1,834 | 1,848 | 1,651 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 5,970,459 | $ 6,397,658 |
Fair Value | 5,400,982 | 6,587,581 |
Assets held by insurance regulatory requirements | 12,200 | 13,400 |
Assets held in trust for the benefit of contractual counterparties | 165,000 | 189,800 |
FHLB advance, collateral pledged | 167,200 | |
Total fixed income securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,970,459 | 6,397,658 |
Gross Unrealized Gains | 1,907 | 218,390 |
Gross Unrealized Losses | (571,384) | (28,467) |
Fair Value | 5,400,982 | 6,587,581 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 180,941 | 133,990 |
Gross Unrealized Gains | 25 | 285 |
Gross Unrealized Losses | (10,294) | (868) |
Fair Value | 170,672 | 133,407 |
Obligations of U.S. states and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,414,505 | 2,408,688 |
Gross Unrealized Gains | 1,700 | 133,361 |
Gross Unrealized Losses | (265,167) | (7,396) |
Fair Value | 2,151,038 | 2,534,653 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,393,106 | 2,704,586 |
Gross Unrealized Gains | 148 | 75,172 |
Gross Unrealized Losses | (227,409) | (13,776) |
Fair Value | 2,165,845 | 2,765,982 |
ABS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 134,309 | 150,888 |
Gross Unrealized Gains | 5 | 830 |
Gross Unrealized Losses | (5,819) | (1,008) |
Fair Value | 128,495 | 150,710 |
RMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 230,997 | 309,991 |
Gross Unrealized Gains | 15 | 2,397 |
Gross Unrealized Losses | (28,372) | (3,278) |
Fair Value | 202,640 | 309,110 |
CMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 266,711 | 315,330 |
Gross Unrealized Gains | 14 | 5,736 |
Gross Unrealized Losses | (21,080) | (1,936) |
Fair Value | 245,645 | 319,130 |
CLOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 337,827 | 360,436 |
Gross Unrealized Gains | 0 | 609 |
Gross Unrealized Losses | (12,329) | (106) |
Fair Value | 325,498 | 360,939 |
Foreign government debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,486 | 13,749 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (914) | (99) |
Fair Value | 3,572 | $ 13,650 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 7,577 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 7,577 |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Values of Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized cost | ||
Due in one year or less | $ 422,546 | |
Due after one year through five years | 1,413,885 | |
Due after five years through ten years | 1,814,408 | |
Due after ten years | 1,349,776 | |
Total debt securities with single maturity date, amortized cost | 5,000,615 | |
Amortized Cost | 5,970,459 | $ 6,397,658 |
Fair Value | ||
Due in one year or less | 416,536 | |
Due after one year through five years | 1,334,284 | |
Due after five years through ten years | 1,614,687 | |
Due after ten years | 1,133,197 | |
Total debt securities with single maturity date, fair value | 4,498,704 | |
Total at end of period | 5,400,982 | 6,587,581 |
ABS | ||
Amortized cost | ||
Total debt securities without single maturity date, amortized cost | 134,309 | |
Amortized Cost | 134,309 | 150,888 |
Fair Value | ||
Total debt securities without single maturity date, fair value | 128,495 | |
Total at end of period | 128,495 | 150,710 |
RMBS | ||
Amortized cost | ||
Total debt securities without single maturity date, amortized cost | 230,997 | |
Amortized Cost | 230,997 | 309,991 |
Fair Value | ||
Total debt securities without single maturity date, fair value | 202,640 | |
Total at end of period | 202,640 | 309,110 |
CMBS | ||
Amortized cost | ||
Total debt securities without single maturity date, amortized cost | 266,711 | |
Amortized Cost | 266,711 | 315,330 |
Fair Value | ||
Total debt securities without single maturity date, fair value | 245,645 | |
Total at end of period | 245,645 | 319,130 |
CLOs | ||
Amortized cost | ||
Total debt securities without single maturity date, amortized cost | 337,827 | |
Amortized Cost | 337,827 | 360,436 |
Fair Value | ||
Total debt securities without single maturity date, fair value | 325,498 | |
Total at end of period | $ 325,498 | $ 360,939 |
Investments - Equity Securities
Investments - Equity Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity Securities, FV-NI, Gain (Loss) [Abstract] | ||
Cost | $ 16,006 | $ 15,838 |
Gross Gains | 0 | 264 |
Gross Losses | (2,121) | (34) |
Equity securities | $ 13,885 | $ 16,068 |
Investments - Net Gains (Losses
Investments - Net Gains (Losses) On Investments and Other Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fixed income securities | ||||
Gains on sales | $ 1,667 | $ 1,389 | $ 6,788 | $ 6,680 |
Losses on sales | (7,040) | (259) | (12,790) | (1,004) |
Change in credit allowance | 0 | (1) | 0 | 48 |
Impairments | (1,415) | 0 | (1,415) | 0 |
Equity securities gains (losses) | (617) | (108) | (2,351) | (308) |
Change in embedded derivative on Home Re Transactions | 4,199 | (397) | 983 | 376 |
Other | (52) | (12) | 9 | (19) |
Net gains (losses) on investments and other financial instruments | (3,258) | 612 | (8,776) | 5,773 |
Proceeds from sales of fixed income securities | $ 125,186 | $ 106,765 | $ 388,740 | $ 246,827 |
Investments - Securities In Unr
Investments - Securities In Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2022 USD ($) security | Dec. 31, 2021 USD ($) security |
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | $ 4,652,327 | $ 1,970,111 |
12 Months or Greater - Fair Value | 738,044 | 85,830 |
Total - Fair Value | 5,390,371 | 2,055,941 |
Less Than 12 Months - Unrealized Losses | (439,144) | (26,842) |
12 Months or Greater - Unrealized Losses | (132,240) | (1,625) |
Total - Unrealized Losses | $ (571,384) | $ (28,467) |
Number of securities in unrealized loss position (in securities) | security | 1,346 | 610 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | $ 91,057 | $ 91,154 |
12 Months or Greater - Fair Value | 52,868 | 2,616 |
Total - Fair Value | 143,925 | 93,770 |
Less Than 12 Months - Unrealized Losses | (4,565) | (790) |
12 Months or Greater - Unrealized Losses | (5,729) | (78) |
Total - Unrealized Losses | (10,294) | (868) |
Obligations of U.S. states and political subdivisions | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 1,993,265 | 452,021 |
12 Months or Greater - Fair Value | 122,240 | 15,540 |
Total - Fair Value | 2,115,505 | 467,561 |
Less Than 12 Months - Unrealized Losses | (229,380) | (7,189) |
12 Months or Greater - Unrealized Losses | (35,787) | (207) |
Total - Unrealized Losses | (265,167) | (7,396) |
Corporate debt securities | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 1,897,128 | 865,085 |
12 Months or Greater - Fair Value | 307,124 | 10,997 |
Total - Fair Value | 2,204,252 | 876,082 |
Less Than 12 Months - Unrealized Losses | (164,708) | (13,260) |
12 Months or Greater - Unrealized Losses | (62,701) | (516) |
Total - Unrealized Losses | (227,409) | (13,776) |
ABS | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 96,910 | 100,064 |
12 Months or Greater - Fair Value | 32,673 | 1,552 |
Total - Fair Value | 129,583 | 101,616 |
Less Than 12 Months - Unrealized Losses | (3,741) | (998) |
12 Months or Greater - Unrealized Losses | (2,078) | (10) |
Total - Unrealized Losses | (5,819) | (1,008) |
RMBS | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 124,775 | 180,586 |
12 Months or Greater - Fair Value | 93,453 | 31,641 |
Total - Fair Value | 218,228 | 212,227 |
Less Than 12 Months - Unrealized Losses | (13,598) | (2,548) |
12 Months or Greater - Unrealized Losses | (14,774) | (730) |
Total - Unrealized Losses | (28,372) | (3,278) |
CMBS | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 183,053 | 89,889 |
12 Months or Greater - Fair Value | 66,755 | 1,511 |
Total - Fair Value | 249,808 | 91,400 |
Less Than 12 Months - Unrealized Losses | (13,797) | (1,887) |
12 Months or Greater - Unrealized Losses | (7,283) | (49) |
Total - Unrealized Losses | (21,080) | (1,936) |
CLOs | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 266,139 | 177,663 |
12 Months or Greater - Fair Value | 59,359 | 21,973 |
Total - Fair Value | 325,498 | 199,636 |
Less Than 12 Months - Unrealized Losses | (9,355) | (71) |
12 Months or Greater - Unrealized Losses | (2,974) | (35) |
Total - Unrealized Losses | (12,329) | (106) |
Foreign government debt | ||
Schedule of Investments [Line Items] | ||
Less Than 12 Months - Fair Value | 0 | 13,649 |
12 Months or Greater - Fair Value | 3,572 | 0 |
Total - Fair Value | 3,572 | 13,649 |
Less Than 12 Months - Unrealized Losses | 0 | (99) |
12 Months or Greater - Unrealized Losses | (914) | 0 |
Total - Unrealized Losses | $ (914) | $ (99) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 5,400,982 | $ 6,587,581 |
Equity securities | 13,885 | 16,068 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 13,885 | 16,068 |
Cash equivalents | 236,940 | 254,230 |
Total assets | 5,651,807 | 6,857,879 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 13,885 | 16,068 |
Cash equivalents | 198,397 | 254,230 |
Total assets | 364,023 | 372,451 |
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Cash equivalents | 38,543 | 0 |
Total assets | 5,287,784 | 6,485,428 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Embedded derivative related to Home Re transactions | 800 | 1,800 |
Total fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 5,400,982 | 6,587,581 |
Total fixed income securities | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 5,400,982 | 6,587,581 |
Total fixed income securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 151,741 | 102,153 |
Total fixed income securities | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 5,249,241 | 6,485,428 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 170,672 | 133,407 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 170,672 | 133,407 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 151,741 | 102,153 |
U.S. Treasury securities and obligations of U.S. government corporations and agencies | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 18,931 | 31,254 |
Obligations of U.S. states and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 2,151,038 | 2,534,653 |
Obligations of U.S. states and political subdivisions | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 2,151,038 | 2,534,653 |
Obligations of U.S. states and political subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Obligations of U.S. states and political subdivisions | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 2,151,038 | 2,534,653 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 2,165,845 | 2,765,982 |
Corporate debt securities | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 2,165,845 | 2,765,982 |
Corporate debt securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Corporate debt securities | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 2,165,845 | 2,765,982 |
ABS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 128,495 | 150,710 |
ABS | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 128,495 | 150,710 |
ABS | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
ABS | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 128,495 | 150,710 |
RMBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 202,640 | 309,110 |
RMBS | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 202,640 | 309,110 |
RMBS | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
RMBS | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 202,640 | 309,110 |
CMBS | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 245,645 | 319,130 |
CMBS | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 245,645 | 319,130 |
CMBS | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
CMBS | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 245,645 | 319,130 |
CLOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 325,498 | 360,939 |
CLOs | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 325,498 | 360,939 |
CLOs | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
CLOs | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 325,498 | 360,939 |
Foreign government debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,572 | 13,650 |
Foreign government debt | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,572 | 13,650 |
Foreign government debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Foreign government debt | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,572 | $ 13,650 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 7,577 | |
Commercial paper | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 7,577 | |
Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | |
Commercial paper | Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 7,577 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other invested assets | $ 850 | $ 3,100 |
FHLB Advance | 0 | 155,000 |
9% Convertible Junior Subordinated Debentures | 21,296 | 110,204 |
Total financial liabilities | 662,653 | 1,146,712 |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other invested assets | 850 | 3,100 |
FHLB Advance | 0 | 157,585 |
9% Convertible Junior Subordinated Debentures | 28,475 | 151,000 |
Total financial liabilities | $ 609,406 | 1,251,673 |
Senior Notes | 5.75% Senior Notes Due 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate | 5.75% | |
Senior Notes | 5.75% Senior Notes Due 2023 | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior Notes Payable | $ 0 | 241,255 |
Senior Notes | 5.75% Senior Notes Due 2023 | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior Notes Payable | $ 0 | 256,213 |
Senior Notes | 5.25% Senior Notes Due 2028 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate | 5.25% | |
Senior Notes | 5.25% Senior Notes Due 2028 | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior Notes Payable | $ 641,357 | 640,253 |
Senior Notes | 5.25% Senior Notes Due 2028 | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Senior Notes Payable | $ 580,931 | $ 686,875 |
9% Convertible Junior Subordinated Debentures | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate | 9% |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total other comprehensive income (loss) | $ (214,920) | $ (27,389) | $ (778,762) | $ (87,565) |
Income tax benefit (expense) | 45,133 | 5,752 | 163,540 | 18,389 |
Other comprehensive income (loss), net of tax | (169,787) | (21,637) | (615,222) | (69,176) |
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||
Total reclassifications before tax | 314,267 | 199,732 | 849,597 | 583,217 |
Income tax benefit (expense) | (64,642) | (41,755) | (175,691) | (122,168) |
Total reclassifications, net of tax | 249,625 | 157,977 | 673,906 | 461,049 |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning of period | 4,861,382 | |||
Other comprehensive income (loss) before reclassifications | (624,401) | |||
Less: Amounts reclassified from AOCI | (9,179) | |||
Balance, end of period | 4,540,061 | 4,877,420 | 4,540,061 | 4,877,420 |
Reclassification from Accumulated Other Comprehensive Income | ||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||
Total reclassifications before tax | (12,909) | 74 | (11,619) | 4,547 |
Income tax benefit (expense) | 2,711 | (15) | 2,440 | (954) |
Total reclassifications, net of tax | (10,198) | 59 | (9,179) | 3,593 |
Accumulated other comprehensive income (loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other comprehensive income (loss), net of tax | (169,787) | (21,637) | (615,222) | (69,176) |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning of period | (325,738) | 169,282 | 119,697 | 216,821 |
Balance, end of period | (495,525) | 147,645 | (495,525) | 147,645 |
Net unrealized gains and (losses) on available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total other comprehensive income (loss) | (194,449) | (34,937) | (759,409) | (97,057) |
Income tax benefit (expense) | 40,834 | 7,337 | 159,476 | 20,382 |
Other comprehensive income (loss), net of tax | (153,615) | (27,600) | (599,933) | (76,675) |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning of period | 150,038 | |||
Other comprehensive income (loss) before reclassifications | (603,309) | |||
Less: Amounts reclassified from AOCI | (3,376) | |||
Balance, end of period | (449,895) | (449,895) | ||
Net unrealized gains and (losses) on available-for-sale securities | Reclassification from Accumulated Other Comprehensive Income | ||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||
Total reclassifications before tax | (6,681) | 1,045 | (4,273) | 7,462 |
Income tax benefit (expense) | 1,403 | (219) | 897 | (1,566) |
Total reclassifications, net of tax | (5,278) | 826 | (3,376) | 5,896 |
Net benefit plan assets and (obligations) recognized in shareholders' equity | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total other comprehensive income (loss) | (20,471) | 7,548 | (19,353) | 9,492 |
Income tax benefit (expense) | 4,299 | (1,585) | 4,064 | (1,993) |
Other comprehensive income (loss), net of tax | (16,172) | 5,963 | (15,289) | 7,499 |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning of period | (30,341) | |||
Other comprehensive income (loss) before reclassifications | (21,092) | |||
Less: Amounts reclassified from AOCI | (5,803) | |||
Balance, end of period | (45,630) | (45,630) | ||
Net benefit plan assets and (obligations) recognized in shareholders' equity | Reclassification from Accumulated Other Comprehensive Income | ||||
Amounts Reclassified From Accumulated Other Comprehensive Income [Abstract] | ||||
Total reclassifications before tax | (6,228) | (971) | (7,346) | (2,915) |
Income tax benefit (expense) | 1,308 | 204 | 1,543 | 612 |
Total reclassifications, net of tax | $ (4,920) | $ (767) | $ (5,803) | $ (2,303) |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pension and Supplemental Executive Retirement Plans | ||||
Components of Net Periodic Benefit Cost [Abstract] | ||||
Service cost | $ 1,813 | $ 1,908 | $ 5,439 | $ 5,724 |
Interest cost | 2,863 | 2,794 | 8,588 | 8,383 |
Expected return on plan assets | (4,907) | (5,229) | (14,723) | (15,687) |
Amortization of net actuarial losses (gains) | 1,266 | 1,403 | 3,798 | 4,208 |
Amortization of prior service cost (credit) | (57) | (60) | (163) | (179) |
Settlements and curtailments | 5,671 | 4,732 | 5,671 | 4,732 |
Net periodic benefit cost (benefit) | 6,649 | 5,548 | 8,610 | 7,181 |
Other Postretirement Benefit Plans | ||||
Components of Net Periodic Benefit Cost [Abstract] | ||||
Service cost | 327 | 377 | 981 | 1,131 |
Interest cost | 173 | 163 | 521 | 487 |
Expected return on plan assets | (2,625) | (2,216) | (7,876) | (6,647) |
Amortization of net actuarial losses (gains) | (776) | (425) | (2,328) | (1,273) |
Amortization of prior service cost (credit) | 123 | 53 | 367 | 159 |
Settlements and curtailments | 0 | 0 | 0 | 0 |
Net periodic benefit cost (benefit) | $ (2,778) | $ (2,048) | (8,335) | $ (6,143) |
Pension Plan | ||||
Components of Net Periodic Benefit Cost [Abstract] | ||||
Company contribution to qualified pension plan | $ 6,300 |
Loss Reserves (Details)
Loss Reserves (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) loan | Sep. 30, 2021 loan | Sep. 30, 2022 USD ($) loan | Sep. 30, 2021 USD ($) loan | Dec. 31, 2021 USD ($) | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Increase (decrease) in loss reserves | $ (280,152) | $ 52,372 | |||
Current year increase in reserves | 104,086 | 95,534 | |||
Prior years decrease in reserves | (327,512) | $ (5,968) | |||
Premium refund liability, expected claim payments | $ 28,100 | $ 28,100 | $ 37,300 | ||
Primary Delinquent Inventory [Roll Forward] | |||||
Delinquent inventory at the beginning of period (in loans) | loan | 26,855 | 42,999 | 33,290 | 57,710 | |
New notices (in loans) | loan | 10,990 | 9,862 | 31,089 | 31,909 | |
Cures (in loans) | loan | (11,494) | (14,813) | (37,371) | (50,901) | |
Paid claims (in loans) | loan | (337) | (298) | (978) | (956) | |
Rescissions and denials (in loans) | loan | (11) | (11) | (27) | (23) | |
Other items removed from inventory (in loans) | loan | (125) | (360) | (125) | (360) | |
Delinquent inventory at end of period (in loans) | loan | 25,878 | 37,379 | 25,878 | 37,379 | |
$1,000 Increase/Decrease In Average Severity Reserve Factor | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Increase (decrease) in loss reserves | $ 11,000 | ||||
One Percentage Point Increase/Decrease In Average Claim Rate Reserve Factor | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Increase (decrease) in loss reserves | 15,000 | ||||
Increase (decrease) in estimated claim rate on primary defaults | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Prior years decrease in reserves | (324,556) | $ (18,147) | |||
Increase (decrease) in estimated severity on primary defaults | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Prior years decrease in reserves | (18,682) | (105) | |||
Change in estimates related to pool reserves, LAE reserves, reinsurance, and other | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Prior years decrease in reserves | $ 15,726 | 12,284 | |||
Change in estimates related to IBNR reserves | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Current year increase in reserves | 5,900 | ||||
Probable Loss On Litigation Claims Paying Practices | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Prior years decrease in reserves | $ 6,300 |
Loss Reserves - Reconciliation
Loss Reserves - Reconciliation of Beginning and Ending Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Loss Reserve [Roll Forward] | ||
Reserve at beginning of period | $ 883,522 | $ 880,537 |
Less reinsurance recoverable | 66,905 | 95,042 |
Net reserve at beginning of period | 816,617 | 785,495 |
Losses and LAE incurred in respect of delinquency notices received in: | ||
Current year | 104,086 | 95,534 |
Prior years | (327,512) | (5,968) |
Total losses incurred | (223,426) | 89,566 |
Losses and LAE paid in respect of delinquency notices received in: | ||
Current year | 116 | 339 |
Prior years | 36,089 | 48,842 |
Total losses paid | 36,205 | 49,181 |
Net reserve at end of period | 556,986 | 825,880 |
Plus reinsurance recoverable | 46,384 | 107,029 |
Reserve at end of period | $ 603,370 | $ 932,909 |
Loss Reserves - Delinquent Item
Loss Reserves - Delinquent Items (Details) - loan | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Aging of the Primary Delinquent Inventory [Abstract] | ||||||
3 months or less (in loans) | 7,825 | 7,586 | 6,948 | |||
4 - 11 months (in loans) | 7,619 | 7,990 | 9,371 | |||
12 months or more (in loans) | 10,434 | 17,714 | 21,060 | |||
Total primary delinquent inventory (in loans) | 25,878 | 26,855 | 33,290 | 37,379 | 42,999 | 57,710 |
3 months or less (as a percent) | 30% | 23% | 19% | |||
4 - 11 months (as a percent) | 30% | 24% | 25% | |||
12 months or more (as a percent) | 40% | 53% | 56% | |||
Total primary delinquent inventory (as a percent) | 100% | 100% | 100% | |||
Primary claims received inventory included in ending delinquent inventory (in loans) | 244 | 211 | 154 | |||
Percent of 12 months or more delinquent inventory, delinquent for more than 36 months (as a percent) | 33% | 20% | 17% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 27, 2022 | Oct. 31, 2022 | Aug. 31, 2022 | May 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jan. 01, 2021 | |
Class of Stock [Line Items] | ||||||||
Retained earnings | $ 3,843,060 | $ 3,250,691 | ||||||
Shares repurchased in period (in shares) | 21.7 | 19 | ||||||
Shares repurchased, weighted average price per share | $ 14.10 | $ 15.30 | ||||||
Remaining authorized repurchase amount | $ 194,000 | |||||||
Repurchase of common stock | $ 303,060 | $ 150,000 | ||||||
Quarterly cash dividend paid (per share) | $ 0.10 | $ 0.08 | ||||||
Cash dividends | $ 30,500 | $ 51,000 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Class of Stock [Line Items] | ||||||||
Retained earnings | $ 68,300 | |||||||
Additional paid in capital | $ 68,300 | |||||||
Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Shares repurchased in period (in shares) | 2.6 | |||||||
Repurchase of common stock | $ 33,200 | |||||||
Quarterly cash dividend declared (per share) | $ 0.10 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
RSUs subject to performance conditions | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 848 | 966 |
Weighted Average Share Fair Value (in dollars per share) | $ 15.46 | $ 12.82 |
Share-based compensation arrangement, maximum vesting percent of shares granted | 200% | |
RSUs subject only to service conditions | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 319 | 398 |
Weighted Average Share Fair Value (in dollars per share) | $ 15.45 | $ 12.82 |
Non-employee director RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 104 | 0 |
Weighted Average Share Fair Value (in dollars per share) | $ 15.32 | $ 0 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 1 year | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 3 years |
Statutory Information (Details)
Statutory Information (Details) $ in Millions | 9 Months Ended | |
Nov. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) jurisdiction | |
Statutory capital requirements [Abstract] | ||
Number of jurisdictions with risk-to-capital requirements (in jurisdictions) | jurisdiction | 16 | |
Maximum permitted risk-to-capital ratio commonly applied | 25 to 1 | |
Mortgage Guaranty Insurance Corporation | ||
Statutory capital requirements [Abstract] | ||
Maximum risk-to-capital ratio | 25 | |
Risk to capital ratio at end of period | 9.4 to 1 | |
Risk-to-capital ratio | 9.4 | |
Amount of policyholders position above or below required MPP | $ 3,700 | |
Amount of required MPP | 2,000 | |
Dividend paid to the holding company | $ 400 | |
Percentage of statutory policyholders surplus used to determine maximum allowable dividends (as a percent) | 10% | |
Adjusted statutory net income measurement period (in years) | 3 years | |
Adjusted statutory net income dividend payment measurement period (in years) | 2 years | |
Mortgage Guaranty Insurance Corporation | Subsequent Event | ||
Statutory capital requirements [Abstract] | ||
Dividend paid to the holding company | $ 400 |
Statutory Information - Summary
Statutory Information - Summary of Amounts Disclosed Under Statutory Accounting Practices (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Statutory Capital [Abstract] | ||
Statutory net income | $ 284,084 | $ 194,614 |
Statutory policyholders' surplus | 1,231,992 | 1,354,268 |
Contingency reserve | $ 4,533,371 | $ 3,987,786 |