Radian (RDN) 8-K Radian Group, Inc. Form 8-K

Exhibit 99

Radian Asset Assurance Inc.

[GRAPHIC APPEARS HERE]

Quarterly

Operating Supplement

Second Quarter 2003

Quarterly Operating Supplement

Table of Contents

	Page
Company Profile	2
Company Information	2
Key Financial Highlights	3
Statutory Income Statements	4
Statutory Balance Sheets	5
Gross Premiums Written by Product	6
Total Claims-Paying Resources and Leverage Ratios	6
Investment Portfolio Highlights	7
Insured Portfolio Highlights	8
Management Team	12

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Table of Contents

1

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Quarterly Operating Supplement

June 30, 2003

Company Profile

Radian Asset Assurance Inc., founded in 1985 and rated AA by Standard & Poor’s and Fitch Ratings, provides financial guaranty insurance and reinsurance to the holders of debt obligations and asset-backed securities. As a direct writer of insurance for municipal bonds, asset-backed obligations, trade credit reinsurance and other credit insurance, the company plays an important role in extending the benefits of insurance to a broad range of issuers and securities.

Radian Asset Assurance Inc. is a subsidiary of Radian Group Inc., (NYSE:RDN), a global credit enhancement provider headquartered in Philadelphia, with significant operations in New York City and London.

Company Information

Radian Asset Assurance Inc.	Contact:
335 Madison Avenue	John C. DeLuca
New York, New York 10017	Senior Vice President, Market Development
1 877 337.4925 (within the	1 212 984.9222
1 212 983.3100	john.deluca@radiangroupinc.com

Quarterly Operating Supplement for the Period Ended June 30, 2003 / Company Profile / Company Information

2

Quarterly Operating Supplement

Radian Group Inc. and Subsidiaries

Key Financial Highlights*($ Thousands)

	Six months ended June 30, 2003
	Mortgage Insurance			Mortgage Services			Financial Guaranty			Total
Net premiums written	$	354,999			—		$	171,257		$	526,256
Net premiums earned	$	357,750			—		$	123,391		$	481,141
Net investment income		54,582		$	36			39,058			93,676
Equity in net income of affiliates		—			43,289			5,458			48,747
Other income		14,416			12,785			2,759			29,960
Total revenues		426,748			56,110			170,666			653,524
Provision for losses		130,204			—			33,094			163,298
Policy acquisition costs		34,923			—			27,462			62,385
Other operating expenses		62,596			20,224			18,186			101,006
Interest expense		10,662			1,473			6,101			18,236
Total expenses		238,385			21,697			84,843			344,925
Gain/(loss) on disposition of investments		865			(918	)		6,902			6,849
Change in fair value of derivative instruments		(26	)		27			(12,728	)		(12,727	)
Net gains/(losses)		839			(891	)		(5,826	)		(5,878	)
Pretax income		189,202			33,522			79,997			302,721
Income tax provision		51,358			13,399			21,518			86,275
Net income	$	137,844		$	20,123		$	58,479		$	216,446
Total assets	$	3,626,022		$	272,263		$	2,154,673		$	6,052,958
Deferred policy acquisition costs		76,404			—			130,209			206,613
Reserve for losses		490,579			—			162,803			653,382
Unearned premiums		108,819			—			553,473			662,292
Equity	$	1,689,161		$	220,753		$	1,116,090		$	3,026,004

* Reported on a GAAP basis.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Key Financial Highlights

3

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Statutory Income Statements ($ Thousands)

	Quarter ended						Six Months Ended
	June 30 2003			June 30 2002			June 30 2003			June 30 2002
Revenues
Gross premiums written	$	14,039		$	54,579		$	61,067		$	94,013
Reinsurance premiums ceded		(5,583	)		(8,390	)		(13,363	)		(18,705	)
Net premiums written		8,456			46,189			47,704			75,308
Decrease/(increase) in unearned premiums		16,930			(23,451	)		6,805			(32,158	)
Premiums earned		25,386			22,738			54,509			43,150
Net investment income		7,363			5,957			14,256			12,612
Net realized gain/(loss) on sale of investments		230			(206	)		1,418			(475	)
Net investment gains		7,593			5,751			15,674			12,137
Other income		(283	)		229			1,200			333
Total revenues		32,696			28,718			71,383			55,620
Expenses
Losses and loss adjustment expenses incurred		4,001			9,409			10,280			18,988
Commissions incurred		(8,311	)		2,455			(5,608	)		4,603
Other underwriting expenses		13,011			8,233			22,898			16,155
Total expenses		8,701			20,097			27,570			39,746
Income before income taxes		23,995			8,621			43,813			15,874
Federal and foreign income taxes		1,155			2,246			3,435			2,726
Net income		22,840			6,375			40,378			13,148
Financial Ratios
Loss and LAE Ratio		15.8	%		41.4	%		18.9	%		44.0	%
Underwriting Expense Ratio		55.6	%		23.1	%		36.2	%		27.6	%
Combined Ratio		71.4	%		64.5	%		55.1	%		71.6	%

Effective April 30, 2003, Radian Asset Assurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regards to its Trade Credit product, with an affiliated company (Radian Reinsurance Inc.) whereby the Company reversed assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on net income.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Statutory Income Statements

4

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Statutory Balance Sheets($ Thousands)

	June 30 2003		December 31 2002
Assets
Long-term bonds, at amortized cost	$	677,508	$	550,512
Preferred stock, at market		33,477		24,585
Common stock, at market		3,846		1,156
Cash and short-term investments		56,398		46,100
Receivable for securities		2,349		149
Total Investments		773,578		622,502
Investment income due and accrued		9,188		6,919
Premiums receivable		13,687		22,449
Funds held by reinsured companies		42		1,863
Current federal income tax recoverable		875		—
Net deferred tax asset		1,028		1,531
Receivable from affiliates		9,474		—
Other assets		115		2,119
Total Assets	$	807,987	$	657,383
Liabilities
Contingency reserve	$	46,199	$	39,272
Losses and loss adjustment expenses		18,817		50,453
Reinsurance payable on paid losses and loss adjustment expenses		1,968		4,843
Unearned premiums		226,895		233,701
Provision for reinsurance		108		284
Payable to affiliates		—		2,200
Payable for securities		6,722		6,660
Ceded reinsurance premiums payable		1,443		2,670
Federal and foreign income taxes payable		—		5,360
Funds held under reinsurance treaties		56,466		—
Accrued expenses and other liabilities		2,880		2,481
Total Liabilities		361,498		347,924
Policyholders’ Surplus
Common stock		15,000		15,000
Additional paid-in capital		329,077		229,077
Unassigned funds		102,412		65,382
Total Policyholders’ Surplus		446,489		309,459
Total Liabilities and Policyholders’ Surplus	$	807,987	$	657,383
Qualified Statutory Capital	$	492,688	$	348,731

Effective April 30, 2003, Radian Asset Assurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regards to its Trade Credit product, with an affiliated company (Radian Reinsurance Inc.) whereby the Company reversed assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on net income.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Statutory Balance Sheets

5

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Gross Premiums Written by Product ($ Thousands)

	2nd Qtr 2003			2nd Qtr 2002			% Change	YTD 2003			YTD 2002		% Change
Public Finance Direct	$	10,891		$	15,957		-31.7%	$	21,735		$	30,541	-28.8%
Structured Finance Direct		21,883			23,627		-7.4%		38,644			31,883	21.2%
Public Finance Reinsurance		1,552			(16	)	-9800.0%		4,332			612	607.8%
Structured Finance Reinsurance		1,675			3,395		-50.7%		6,048			9,675	-37.5%
Trade Credit Reinsurance		(21,962	)		11,616		-289.1%		(9,692	)		21,302	-145.5%
	$	14,039		$	54,579		-74.3%	$	61,067		$	94,013	-35.0%

Effective April 30, 2003, Radian Asset Assurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regards to its Trade Credit product, with an affiliated company (Radian Reinsurance Inc.) whereby the Company reversed assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on net income.

Total Claims-Paying Resources and Leverage Ratios

($ Thousands except ratios)

	June 30 2003		December 31 2002		% Change
Capital and Surplus	$	446,489	$	309,459	44%
Contingency Reserve		46,199		39,272	18%
Qualified Statutory Capital		492,688		348,731	41%
Unearned Premium Reserve		226,895		233,701	-3%
Loss and Loss Expense Reserves		18,817		50,453	-63%
Total Policyholders’ Reserves		245,712		284,154	-14%
Present Value of Future Installment Premiums		181,508		151,032	20%
Reinsurance and Soft Capital Facilities		50,000		15,000	233%
Total Claims-Paying Resources	$	969,908	$	798,917	21%
Total Debt Service (Principal and Interest) Outstanding	$	25,227,965	$	22,081,339	14%
Capital Leverage Ratio (1)		51:1		63:1
Claims-Paying Ratio (2)		26:1		28:1

1 Capital Leverage Ratio: Total debt service/Qualified statutory capital.

2 Claims-Paying Ratio: Total debt service/Total claims-paying resources.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Gross Premiums / Total Claims-Paying Resources

6

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Investment Portfolio Highlights

Asset Quality

As of June 30, 2003, the book value of our investment portfolio was $757.3 million, with an average duration of 5.2 years.

[GRAPHIC APPEARS HERE]

Asset Class

Our conservative portfolio is invested primarily in fixed-income securities. Our primary objective is to achieve total return, with a secondary objective of maximizing after-tax income.

[GRAPHIC APPEARS HERE]

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Investment Portfolio Highlights

7

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights($ Thousands)

Geographic Diversification

State	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
NEW YORK	$	1,107,559	6.1%	$	1,019,026	6.7%
PENNSYLVANIA		1,056,121	5.8%		993,019	6.5%
TEXAS		1,042,224	5.7%		1,133,571	7.4%
FLORIDA		594,063	3.3%		649,067	4.3%
CALIFORNIA		470,663	2.6%		494,536	3.2%
CONNECTICUT		462,214	2.5%		463,912	3.0%
COLORADO		452,039	2.5%		371,126	2.4%
ILLINOIS		407,006	2.2%		362,451	2.4%
WASHINGTON		321,223	1.8%		323,379	2.1%
INDIANA		294,996	1.6%		141,088	0.9%
TOTAL OF TOP TEN STATES:		6,208,109	34.1%		5,951,175	39.0%
TOTAL OF OTHER STATES:		3,614,470	19.8%		3,423,522	22.4%
DOMESTIC STRUCTURAL FINANCE:		7,493,954	41.1%		5,282,486	34.6%
INTERNATIONAL:		909,403	5.0%		608,706	4.0%
Total	$	18,225,936	100.0%	$	15,265,889	100.0%

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

8

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights($ Thousands)

Sector Breakout

Public Finance	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
Healthcare	$	2,278,557	12.5%	$	1,997,820	13.1%
General Obligations		2,043,713	11.2%		2,105,718	13.8%
Education		1,573,874	8.6%		1,549,056	10.1%
Utilities		853,715	4.7%		827,500	5.4%
Long Term Care		850,923	4.7%		840,073	5.5%
Other Public Finance		675,619	3.7%		468,386	3.1%
Tax-Backed		509,153	2.8%		497,104	3.3%
AAA Wrap Municipal		440,191	2.4%		442,891	2.9%
Transportation		408,658	2.2%		408,275	2.7%
Housing		194,123	1.1%		208,523	1.4%
Investor-Owned Utilities		55,898	0.3%		59,856	0.4%
Subtotal Public Finance	$	9,884,424	54.2%	$	9,405,202	61.6%
Structured Finance	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
Collateralized Debt Obligations	$	5,896,894	32.4%	$	4,227,312	27.7%
Asset-Backed - Commercial and Other		771,840	4.2%		490,718	3.2%
Asset-Backed - Consumer		743,900	4.1%		649,398	4.3%
Asset-Backed - Mortgage and MBS		711,321	3.9%		192,886	1.3%
Other Structured Finance		217,555	1.2%		300,373	2.0%
Subtotal Structured Finance	$	8,341,511	45.8%	$	5,860,687	38.4%
Total	$	18,225,936	100.0%	$	15,265,889	100.0%

Quarterly Operating Supplement for the Period Ended June 30, 2003 / Insured Portfolio Highlights

9

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights ($ Thousands)

Rating Distribution

Rating*	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
AAA	$	4,657,719	25.6%	$	2,434,385	15.9%
AA		2,865,883	15.7%		2,903,551	19.0%
A		2,883,831	15.8%		2,638,433	17.3%
BBB		6,178,035	33.9%		5,682,251	37.2%
Investment Grade		241,940	1.3%		198,467	1.3%
Below Investment Grade		580,254	3.2%		719,055	4.7%
Not Rated		818,275	4.5%		689,746	4.5%
Total	$	18,225,936	100.0%	$	15,265,889	100.0%

* Indicated category reflects highest rating of the three rating agencies.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

10

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights($ Thousands)

10 Largest Public Finance Exposures

	Net Par (6/30/2003)		Percent of total Net Par	Rating*
MUNI LEVERAGED LEASE	$	145,377	0.80%	A
PORT AUTHORITY N Y & N J		92,767	0.51%	AA-
SECOND -TO-PAY MUNI WRAP		90,000	0.49%	AAA
SECOND -TO-PAY MUNI WRAP		90,000	0.49%	AAA
SECOND -TO-PAY MUNI WRAP		88,000	0.48%	AAA
INTERLOCKEN CONSOLIDATED METROPOLITAN DISTRICT		85,095	0.47%	BBB-
NEW YORK N Y GO		79,772	0.44%	A-
ORLANDO REGIONAL HEALTH SYSTEMS FL		78,558	0.43%	A-
MUNI LEVERAGED LEASE		76,976	0.42%	AA
MERIDIAN METROPOLITAN DISTRICT		76,635	0.42%	BBB
Total top 10	$	903,180	4.96%

10 Largest Structured Finance Exposures

	Net Par (6/30/2003)		Percent of total Net Par	Rating*
EUROPEAN STATIC SYNTHETIC CDO	$	270,900	1.49%	AAA
EUROPEAN STATIC SYNTHETIC CDO		270,900	1.49%	AAA
US STATIC SYNTHETIC CDO		270,000	1.48%	AAA
US STATIC SYNTHETIC CDO		270,000	1.48%	AAA
US STATIC SYNTHETIC CDO		270,000	1.48%	AA
CDO OF ABS		257,529	1.41%	AA
US STATIC SYNTHETIC CDO		252,051	1.38%	AA
US STATIC SYNTHETIC CDO		250,000	1.37%	AA+
US STATIC SYNTHETIC CDO		250,000	1.37%	AAA
US STATIC SYNTHETIC CDO		250,000	1.37%	AAA
Total top 10	$	2,611,379	14.33%

* Indicated category reflects highest rating of the three rating agencies.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

11

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Management Team

Martin A. Kamarck

President

David J. Beidler

Senior Vice President, Chief Legal Officer

Edward McC. Bowers

Senior Vice President, Global Structured Products

Sally B. Campbell

Senior Vice President, Public Finance

John C. DeLuca

Senior Vice President, Market Development

Bonita Z. Dorland

Senior Vice President, Chief Risk Officer

Andrew C.J. Poole

Managing Director, Radian Representatives Ltd.

Jack Praschnik

Senior Vice President, Global Strategies

Patrick Rossi

Senior Vice President, Controller

Jeffrey C. Salton

Senior Vice President, Operations and Analysis

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Radian Asset Assurance Inc. Management Team

12

Radian Reinsurance Inc.

[GRAPHIC APPEARS HERE]

Quarterly

Operating Supplement

Second Quarter 2003

Quarterly Operating Supplement

Table of Contents

	Page
Company Profile	2
Company Information	2
Key Financial Highlights	3
Statutory Income Statements	4
Statutory Balance Sheets	5
Gross Premiums Written by Product	6
Total Claims-Paying Resources and Leverage Ratios	6
Investment Portfolio Highlights	7
Insured Portfolio Highlights	8
Management Team	12

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Table of Contents

1

Quarterly Operating Supplement

Radian Reinsurance Inc.

Quarterly Operating Supplement

June 30, 2003

Company Profile

Radian Reinsurance Inc., founded in 1986 and rated AA by Fitch Ratings and Standard & Poor’s and Aa2 by Moody’s, was the first company dedicated exclusively to the reinsurance of investment-grade securities. The company provides financial guaranty reinsurance to the primary insurers of municipal bonds, asset-backed securities and structured finance obligations.

Radian Reinsurance Inc. is a subsidiary of Radian Group Inc., (NYSE:RDN), a global credit enhancement provider headquartered in Philadelphia, with significant operations in New York City and London.

Company Information

Radian Reinsurance Inc.	Contact:
335 Madison Avenue New York, New York 10017 1 877 337.4925 (within the U.S.) 1 212 983.3100	John C. DeLuca Senior Vice President, Market Development 1 212 984.9222 john.deluca@radiangroupinc.com

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Company Profile / Company Information

2

Quarterly Operating Supplement

Radian Group Inc. and Subsidiaries

Key Financial Highlights*($ Thousands)

	Six months ended June 30, 2003
	Mortgage Insurance			Mortgage Services			Financial Guaranty			Total
Net premiums written	$	354,999			—		$	171,257		$	526,256
Net premiums earned	$	357,750			—		$	123,391		$	481,141
Net investment income		54,582		$	36			39,058			93,676
Equity in net income of affiliates		—			43,289			5,458			48,747
Other income		14,416			12,785			2,759			29,960
Total revenues		426,748			56,110			170,666			653,524
Provision for losses		130,204			—			33,094			163,298
Policy acquisition costs		34,923			—			27,462			62,385
Other operating expenses		62,596			20,224			18,186			101,006
Interest expense		10,662			1,473			6,101			18,236
Total expenses		238,385			21,697			84,843			344,925
Gain/(loss) on disposition of investments		865			(918	)		6,902			6,849
Change in fair value of derivative instruments		(26	)		27			(12,728	)		(12,727	)
Net gains/(losses)		839			(891	)		(5,826	)		(5,878	)
Pretax income		189,202			33,522			79,997			302,721
Income tax provision		51,358			13,399			21,518			86,275
Net income	$	137,844		$	20,123		$	58,479		$	216,446
Total assets	$	3,626,022		$	272,263		$	2,154,673		$	6,052,958
Deferred policy acquisition costs		76,404			—			130,209			206,613
Reserve for losses		490,579			—			162,803			653,382
Unearned premiums		108,819			—			553,473			662,292
Equity	$	1,689,161		$	220,753		$	1,116,090		$	3,026,004

* Reported on a GAAP basis.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Key Financial Highlights

3

Quarterly Operating Supplement

Radian Reinsurance Inc.

Statutory Income Statements($ Thousands)

	Quarter ended						Six Months Ended
	June 30 2003			June 30 2002			June 30 2003			June 30 2002
Revenues
Gross premiums written	$	75,461		$	25,231		$	121,265		$	59,547
Reinsurance premiums ceded		(1,769	)		—			(1,935	)		(1,568	)
Net premiums written		73,692			25,231			119,330			57,979
Increase in unearned premiums		(37,848	)		(5,180	)		(57,905	)		(21,190	)
Premiums earned		35,844			20,051			61,425			36,789
Net investment income		11,874			12,025			24,086			24,010
Net realized gain on sale of investments		2,232			1,901			4,932			3,167
Net investment gains		14,106			13,926			29,018			27,177
Other income		(1,198	)		(15	)		(1,140	)		26
Total revenues		48,752			33,962			89,303			63,992
Expenses
Losses and loss adjustment expenses incurred		8,814			4,928			12,292			4,984
Commissions incurred		23,728			8,178			40,319			18,458
Other underwriting expenses		4,978			2,506			6,824			5,408
Total expenses		37,520			15,612			59,435			28,850
Income before income taxes		11,232			18,350			29,868			35,142
Federal and foreign income tax expenses/(benefits)		3,070			2,501			5,781			(10,018	)
Net income	$	8,162		$	15,849		$	24,087		$	45,160
Financial Ratios
Loss and LAE Ratio		24.6	%		24.6	%		20.0	%		13.5	%
Underwriting Expense Ratio		39.0	%		42.3	%		39.5	%		41.2	%
Combined Ratio		63.6	%		66.9	%		59.5	%		54.7	%

Effective April 30, 2003, Radian Reinsurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regards to its Trade Credit Product, with an affiliated company (Radian Asset Assurance Inc.) whereby the Company assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on net income.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Statutory Income Statements

4

Quarterly Operating Supplement

Radian Reinsurance Inc.

Statutory Balance Sheets($ Thousands)

	June 30 2003		December 31 2002
Assets
Long-term bonds, at amortized cost	$	980,566	$	905,719
Cash and short-term investments		25,304		21,971
Other invested assets		—		13,132
Receivable for securities		—		654
Total Investments		1,005,870		941,476
Investment income due and accrued		13,209		12,817
Premiums receivable		31,388		5,100
Funds held by reinsured companies		59,669		524
Current federal income tax recoverable		1,221		3,174
Net deferred tax asset		3,305		1,991
Receivable from affiliates		—		790
Other assets		2,006		1,360
Total Assets	$	1,116,668	$	967,232
Liabilities
Contingency reserve	$	260,574	$	280,376
Losses and loss adjustment expenses		61,698		29,246
Reinsurance payable on paid losses and loss adjustment expenses		4,370		1,262
Unearned premiums		427,215		369,310
Payable to affiliates		14,093		—
Payable for securities		18,573		3,840
Commissions and contingent profit commissions		2,167		735
Federal and foreign income taxes payable		1,181		—
Funds held under reinsurance treaties		2,147		7
Accrued expenses and other liabilities		6,889		10,320
Total Liabilities		798,907		695,096
Policyholders’ Surplus
Common stock		15,000		15,000
Additional paid-in capital		186,500		186,500
Unassigned funds		116,261		70,636
Total Policyholders’ Surplus		317,761		272,136
Total Liabilities and Policyholders’ Surplus	$	1,116,668	$	967,232
Qualified Statutory Capital	$	578,335	$	552,512

Effective April 30, 2003, Radian Reinsurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regards to its Trade Credit Product, with an affiliated company (Radian Asset Assurance Inc.) whereby the Company assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on net income.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Statutory Balance Sheets

5

Quarterly Operating Supplement

Radian Reinsurance Inc.

Gross Premiums Written by Product($ Thousands)

	2nd Qtr 2003		2nd Qtr 2002		% Change	YTD 2003		YTD 2002		% Change
Public Finance	$	24,739	$	11,973	107%	$	51,528	$	35,046	47%
Structured Finance		14,849		9,429	57%		26,641		20,505	30%
Trade Credit Reinsurance		35,873		3,829	837%		43,096		3,996	978%
	$	75,461	$	25,231	199%	$	121,265	$	59,547	104%

Effective April 30, 2003, Radian Reinsurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regards to its Trade Credit Product, with an affiliated company (Radian Asset Assurance Inc.) whereby the Company assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on net income.

Total Claims-Paying Resources and Leverage Ratios

($ Thousands except ratios)

	June 30 2003		December 31 2002		% Change
Capital and Surplus	$	317,761	$	272,136	17%
Contingency Reserve		260,574		280,376	-7%
Qualified Statutory Capital		578,335		552,512	5%
Unearned Premium Reserve		427,215		369,310	16%
Loss and Loss Expense Reserves		61,698		29,246	111%
Total Policyholders’ Reserves		488,913		398,556	23%
Present Value of Future Installment Premiums		271,468		249,108	9%
Reinsurance and Soft-Capital Facilities		125,000		150,000	-17%
Total Claims-Paying Resources	$	1,463,716	$	1,350,176	8%
Total Debt Service (Principal and Interest) Outstanding		89,845,103		82,674,463	9%
Capital Leverage Ratio (1)		155:1		150:1
Claims-Paying Ratio (2)		61:1		61:1

1 Capital Leverage Ratio: Total debt service/Qualified statutory capital.

2 Claims-Paying Ratio: Total debt service/Total claims-paying resources.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Gross Premiums / Total Claims-Paying Resources

6

Quarterly Operating Supplement

Radian Reinsurance Inc.

Investment Portfolio Highlights

Asset Quality

As of June 30, 2003, the book value of our investment portfolio was $1,002.6 million, with an average duration of 6 years.

[GRAPHIC APPEARS HERE]

Asset Class

Our conservative portfolio is invested primarily in fixed-income securities. Our primary objective is to achieve total return, with a secondary objective of maximizing after-tax income.

[GRAPHIC APPEARS HERE]

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Investment Portfolio Highlights

7

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights($ Thousands)

Geographic Diversification

State	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
CALIFORNIA	$	5,455,363	9.7%	$	5,054,594	9.9%
NEW YORK		3,606,183	6.4%		3,361,363	6.6%
FLORIDA		2,552,936	4.5%		2,376,386	4.7%
TEXAS		2,506,128	4.4%		2,221,825	4.4%
ILLINOIS		2,325,028	4.1%		2,298,487	4.5%
NEW JERSEY		2,056,882	3.6%		1,935,968	3.8%
MASSACHUSETTS		1,918,637	3.4%		1,791,923	3.5%
PENNSYLVANIA		1,917,560	3.4%		1,791,052	3.5%
PUERTO RICO		1,170,873	2.1%		1,092,288	2.1%
WASHINGTON		1,034,562	1.8%		928,918	1.8%
Total of top ten states		24,544,152	43.5%		22,852,803	44.7%
Total of other states		14,669,314	26.0%		14,208,643	27.8%
Domestic structured finance		11,812,712	20.9%		9,885,628	19.4%
International		5,448,673	9.6%		4,124,348	8.1%
Total	$	56,474,852	100.0%	$	51,071,421	100.0%

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

8

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights($ Thousands)

Sector Breakout

Public Finance	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
General Obligations	$	11,595,665	20.5%	$	10,560,096	20.7%
Utilities		7,215,076	12.8%		6,802,514	13.3%
Transportation		6,592,796	11.7%		5,952,153	11.7%
Healthcare		6,343,263	11.2%		6,204,510	12.1%
Tax-Backed		3,620,110	6.4%		3,377,458	6.6%
Investor-Owned Utilities		2,003,644	3.5%		1,904,838	3.7%
Education		1,796,662	3.2%		1,575,248	3.1%
Housing		1,209,258	2.1%		1,184,544	2.3%
Other Public Finance		562,139	1.0%		672,199	1.3%
AAA Wrap Municipal		405,496	0.7%		405,496	0.8%
Long-Term Care		94,763	0.2%		94,790	0.2%
Subtotal Public Finance	$	41,438,873	73.4%	$	38,733,846	75.8%
Structured Finance	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
Asset-Backed - Consumer	$	6,048,437	10.7%	$	5,514,421	10.8%
Collateralized Debt Obligations		4,412,644	7.8%		2,552,035	5.0%
Asset-Backed - Commercial and Other		2,745,599	4.9%		2,489,820	4.9%
Asset-Backed - Mortgage and MBS		1,114,418	2.0%		992,167	1.9%
Other Structured Finance		714,882	1.3%		789,132	1.5%
Subtotal Structured Finance	$	15,035,979	26.6%	$	12,337,575	24.2%
Total	$	56,474,852	100.0%	$	51,071,421	100.0%

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

9

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights($ Thousands)

Rating Distribution

Rating*	Net Par (6/30/2003)		Percent of total	Net Par (12/31/2002)		Percent of total
AAA	$	6,914,263	12.2%	$	4,107,704	8.0%
AA		13,419,277	23.8%		12,018,943	23.5%
A		23,185,022	41.1%		21,409,661	41.9%
BBB		9,975,653	17.7%		9,616,900	18.8%
Investment Grade		246,045	0.4%		445,010	0.9%
Below Investment Grade		637,025	1.1%		512,053	1.0%
Not Rated		2,097,567	3.7%		2,961,149	5.8%
Total	$	56,474,852	100.0%	$	51,071,421	100.0%

* Indicated category reflects highest rating of the three rating agencies.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

10

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights($ Thousands)

10 Largest Public Finance Exposures

	Net Par (6/30/2003)		Percent of total Net Par	Rating *
PORT AUTHORITY N Y & N J	$	379,501	0.67%	AA-
LONG ISLAND POWER AUTHORITY		325,781	0.58%	A-
SAN FRANCISCO CA CITY & COUNTY AIRPORTS		312,810	0.55%	A+
ILLINOIS STATE GO		303,102	0.54%	AA
CALIFORNIA STATE PUBLIC WORKS BOARD		276,695	0.49%	A-
DENVER COLORADO AIRPORT REVENUE		276,660	0.49%	A
PUERTO RICO COMMONWEALTH GO		273,114	0.48%	A
HOUSTON TEXAS - WATER & SEWER		260,385	0.46%	A
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY		254,902	0.45%	AA-
PUERTO RICO COMMONWEALTH HIGHWAY & TRANSIT		248,220	0.44%	A
Total top 10	$	2,911,170	5.15%

10 Largest Structured Finance Exposures

	Net Par (6/30/2003)		Percent of total Net Par	Rating *
US STATIC SYNTHETIC CDO	$	450,000	0.80%	AAA
US STATIC SYNTHETIC CDO		300,000	0.53%	AA
EUROPEAN STATIC SYNTHETIC CDO		288,000	0.51%	AAA
PILGRIM PRINCIPAL PROTECTION FUND		264,749	0.47%	AAA
PROVIDIAN GATEWAY MASTER TRUST		244,158	0.43%	BBB
US STATIC SYNTHETIC CDO		204,000	0.36%	AAA
MID-STATE HOMES TRUST IV		193,975	0.34%	BBB
US STATIC SYNTHETIC CDO		180,000	0.32%	AAA
COUNTRYWIDE HOME LOANS INC		167,157	0.30%	BBB
RFC - HEL		163,840	0.29%	A-
Total top 10	$	2,455,878	4.35%

* Indicated category reflects highest rating of the three rating agencies.

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Insured Portfolio Highlights

11

Quarterly Operating Supplement

Radian Reinsurance Inc.

Management Team

Martin A. Kamarck

President

David J. Beidler

Senior Vice President, Chief Legal Officer

Edward McC. Bowers

Senior Vice President, Global Structured Products

Sally B. Campbell

Senior Vice President, Public Finance

John C. DeLuca

Senior Vice President, Market Development

Bonita Z. Dorland

Senior Vice President, Chief Risk Officer

Andrew C.J. Poole

Managing Director, Radian Representatives Ltd.

Jack Praschnik

Senior Vice President, Global Strategies

Patrick Rossi

Senior Vice President, Controller

Jeffrey C. Salton

Senior Vice President, Operations and Analysis

Quarterly Operating Supplement for the Period Ended June 30, 2003 /Radian Reinsurance Inc. Management Team

12