Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the MGIC Investment Corporation Fourth Quarter 2022 Earnings Call. [Operator Instructions]. I will now turn the conference over to Dianna Higgins, Head of Investor Relations. Please go ahead.

Dianna Higgins

Thank you, Justin. everyone. welcome, and morning, Good Thank you Investment in your interest MGIC Corporation. for

and to on Tim results Officer; Financial the me discuss Mattke, Colson, Officer. call Executive are Joining quarter today our Chief fourth for Chief Nathan the

a to press It our results issued of financial most we quarterly reconciliation our at results yesterday fourth includes also Newsroom, refer on was mtg.mgic.com available that release, under measures which during is additional financial Our today. to MGIC's GAAP website comparable quarter includes the contains call and information non-GAAP will about their measures.

we our you in posted force In find quarterly addition, risk pertaining information other on may supplement information that contains and primary valuable. a our to website

our past As or other a reminder, on time presentations time, from about guidelines corrections underwriting presentations to to we website. information our and post may

Before that everyone statements. from may of to differ results we during call, I comments could the the about started get we want these forward-looking this expectations contained in our Actual make of remind today, future. those course materially

information or of to time X-K. our developments. forward-looking the guidance in or the statements update cause to those filed could from If also materially any No call that any current actual other future that call on make statements, those we than X-K subsequent undertaking the forward-looking not an fact about we are statements light issuance obligation the our one differ such are discussed factors of today yesterday. in results was are contained Additional the in on that should rely this time of at

turn the pleasure With that, over call to I to now the Tim. have

Timothy Mattke

our results we exceptional our Simply pleased great put, have in I'm everyone. that And best the providing returns year another the we morning, had while financial entire matter, to results capital quarter. we meaningful history. Good to financial report XX-year shareholders. for Dianna. that delivered for Thanks,

strength demonstrated and but In on million position to capital equity. flexibility period this produced of of in year. financial the We results and of XX% the return the $XXX details again we will get XX.X% we an last same throughout quarter the our income, quarter, call, the into annualized increase compared an net of earned

XX% all-time a to full in at an year, of the increased high $XXX Insurance insurance income of from stood volumes year in offset written. ago. million, compared rate, the growth in the lower in XXXX. $XXX reflects at than net force insurance a X.X% an to new $XXX increased billion, end million The the year quarter more during persistency increase For by force

end billion ago. Persistency XX% up NIW, increased $XX the we billion to at from XX% of of wrote quarter, the finished the $XX year year with we the of NIW. and quarter, In a

X for prior years, Although record lower was of largest the than great our the is volume volumes the year, the XXXX history. third in another year NIW XX-year

current success We reflection actions also our in take reduction the is focus continued the continue we environment risk increased the of smaller volume NIW company. of reflective for quarter our position with expect to on the market but of as a our on based the market the in long-term MI fourth a

performance. low the We early experience, defaults, level the our including by in near-term performance not and years strong. Turning the To of is of change payment we trends portfolio employment XX% force encouraged continued XXXX remain in we Approximately seen in continue credit in which of of trends is our to of material quality insurance later we credit and books indicator remain from force believe the a a those performance our insurance book the overall. the positive to good favorable portfolio. date, and credit have credit

of up build reduce in of related months. help This portfolio, claims the couple modest past to on home with experienced much the appreciation homeowners on mortgages insured the price in the of home that want should force, the also of to risk in equity, quality declines strong credit even recent equity. rapid of our significant incidence years prices combined highlight our I with allowed the

will mitigate program reinsurance potential comprehensive also Our help losses.

leverage of junior XX% and position $XX our in of our paid in due Loan As flexibility business due capital most of we reducing to Home holding interest [indiscernible], a repurchase in to from XXXX, year, to million. our $XXX during MGIC's result the we capital MGIC advance new and senior dividends position not capital the to annual We Bank also in and grow the approximately only deployed convertible in Federal notes repay debentures company. strong million by ratio strength insurance our the our support remaining used redeem force, expense

also a of including dividends, We of capital to quarter. shareholders the combination the a and increase million our XX% paying $XXX through returned stock in common quarterly dividend repurchasing beginning third common stock approximately in

a company. uncertainties in term, quarter's in been use last challenges in and of company continue to and higher the But ratio potential the retiring and of at and to economic XXXX. debt-to-capital debt during significant our delevering we retain mentioned levels the target expect range with liquidity with I As call, cash the has near our holding holding environment

capital level assess achieve our we to versus level capital shareholders. and the to Our stressed continually that retain that management including the both is for holding operating economic approach of to deployment environment. objectives We capital future may continue return our company we company, at and of evaluate the changing dynamic in so

our in. allocation company in varying operating capital to of part and our that we to positioned prudent the success consider achieve As in thoughtful so company both are to be holding the the strive decision-making operating environment and expect be environments. we assessment, are We or

end Approximately force the commitment XX% was capital. excess of at loss covered in balanced risk the Our of extent economic diversification agreements the later capital reinsurance weaker provide covered at flexibility of down further, by of to environment end reinsurance fourth volatility fourth our Drilling use the of quarter. reinsurance the of share and XX% reduce in some of approach transactions management the includes agreements to to relating reinsurance and in approximately transactions to agreements. force some the quota forward extent and quarter. risk and books the sources These of losses by XXXX was

on in agreed share to We most NIW, that the terms of agreement quota already place will will XX% is a agreement the in in XX%. the total cover quota to get that in to XXXX This bringing to XXXX share policies written of quota written we XXXX. cover policies the share cover reinsurance most addition the

me detail for on our environment minutes to to includes MiQ allows some current the a of uncertainties, proprietary take credit customers, light of provide few In management economic and a majority We our risk-based risk employ engine the evolving emerging approach of MiQ. that risk. our and pricing pricing the market goal intended framework actions including to let near-term comprehensive returns continued for changing frequent our and ourselves including mix granular for a and environments. risks. take We to success our in view portfolio, changes of those positioning conditions of address manage with expected

timing a leads average. immediate resulting is on not or taking by month NIW The actions the X NIW as pricing between and

last a reflection So in NIW is from fall. our of risk see return what you QX primarily of views the

MI NIW current market was considerations, lower both quarter. couple positioning won't was the in analytics impacted that smaller and points given of comment down share by market that market While on likely internal percentage competitive the our we a QX fourth a indicates our

in quarter the defensive Our our first fourth position the in we market market which than to in decline in be further declines will share may months, larger and expect of continues recent be lead expected quarter. to the XXXX

with and success because of our We the while continued our long-term actions it's of comfortable company. are of the relationships and return our results risk our customer on focus maintaining reflective views

me to it With Nathan. turn let that, over

Nathaniel Colson

Tim, Thanks, good morning. and

per of Tim we or fourth We As diluted diluted earned income last million per the $XXX $X.XX strong share share another to during quarter. mentioned, net year. quarter compared $X.XX had

full the $XXX net in last earned million we year. million For year, compared income $XXX to

reconciliation On on to basis, net losses the of reduction debt earned differences $X.XX found past adjusted we diluted net debt last XX% X been a income from in detailed net release GAAP years in increase the extinguishment income can actions. from adjusted be income earnings but our $X.XX operating year. the our have per operating an A primary share,

quarter to favorable quarter year. the led The which full results quarter fourth and loss negative were in incurred the to compared in million the year fourth the for reflective credit last fourth in reserve in has performance, and losses XXXX. losses $XX development were resulted negative of $XX strong quarter each continued negative million Net being incurred

year. losses the $XXX For $XX compared million million negative were last to full year, incurred

loss favorable development favorable million XXXX. in quarter loss favorable of Our reestimation related new reserve in development and of XXXX in delinquencies compared quarter quarter to losses resulted last last development million and of million delinquencies of primarily on the $XXX The of was to year. review prior from loss reserve fourth and development favorable reserve the $XX ultimate $XX

those expectations. As loss our delinquencies expectations, on we to continue exceed adjust ultimate have to continued curate our

the before increased quarter, notices we fourth last XXXX new quarter, in of the XX,XXX the the delinquency quarter inventory received the pandemic. quarter XX,XXX delinquency In In to COVID-XX of X% by XX,XXX the start and compared loans. XX,XXX to

emergence what notices of peak to expect level are XXXX years. and delinquency the to seasoning the due that large continue increase the into the vintages new We loss of may XXXX historically

million $XXX the total During period were for last million to same compared the revenues year. quarter, $XXX

premium year, the earned million our in decrease was For premium Net decrease offset last year. ceded single premiums premium accelerated yield, primarily earned quarter $X.X billion, with in million insurance in to were The growth a to by premiums was last decrease in somewhat force. in $XXX revenue cancellation, net the total due increase full $XXX our a flat in year. and in compared

The points premium in-force in the quarters. force some declining pace recent time, effect the last in in reflects quarter, was and of but point our basis has XX.X been basis yield down portfolio X/XX for the quarter. from in-force insurance been slowing decline in has rates yield on premium The

market, we continued expect to flat during With remain NIW that quality yield higher we relatively expect in-force the XXXX, high and credit persistency XXXX. premium for the origination smaller in

per year-end, increased due portfolio and portfolio a Unrealized while by value the the continue to gains during from in the at share book to Book $XX.XX investment X.X% $X.XX unrealized on book higher headwind last year. last investment the per value rates reducing quarter $XX.XX to per share added $X.XX losses at be share share, interest per value of end for quarter XXXX. $XX.XX

headwind the year. last for higher yield While earnings and that the XX a basis basis the interest long-term the for higher and starting rates is up portfolio year potential X%, a investment per positive from through rates investment come share in the end in of the are results. the of book interest value on term, are XX book points at quarter to The the ended portfolio fourth short points

income approximately quarter investment Sequentially, the quarter up and of million year. was in the last fourth up $X from $X million

yield Assuming the remain rates the significantly year interest than expect environment, on and portfolio we will end as the of a rate increase the book XXXX during similar continue current reinvestment book X.X% by yield. higher the to approach investment

the million, in and from expenses $XX million Operating last quarter quarter up the million quarter $XX year. in fourth were $XX last

technology the Other were data million expenses continued increase million exceptional investments, settlement financial year, infrastructures. fourth expenses our well recent pension full quarters due last compensation factors included compared in to higher analytics full $XXX XXXX in the quarter in as impacting year. to the expense fourth The our and was performance-based in costs during particularly $XXX primarily year results to due as expenses compared to the higher For quarter.

of expect million range the XXXX full expenses down $XXX We in be year $XXX million. to will modestly in operating

management capital activities. Turning our to

include have the and the and company. been capital at of for and writing maintaining company financial priorities holding Our growth consistent flexibility the deploying strength

near-term company, holding we will operating means environments. growth target level level the a maintaining expect of liquidity robust the of means in of this PMIERs company, in For it enable a At excess that maintaining excess operating needs. changing

MGIC year for from holding company. holding levels X.X and and a share million. year, and paid the of company for $XX a and authorized we outstanding common to a X. X.X January In an this cash our strategy, above The million the levels million for total Consistent paid of shares $XXX March with at ended shareholders a the MGIC our per stock million. dividend investments $X.XX $X.XX and share liquidity million, dividend the quarter, shares repurchased During our a at stock we the fourth we targets, to additional million $XXX repurchased were payable capital holding of with of total $XX on company cost per Board $XX our common million we dividend capital of

minimum our we the $X.X $XX At consultation will PMIERs on capital half end dividends share the XXXX, Board. had the requirements to approval first MGIC of the the paid with end of authorization, XXXX. share of $XXX strategy, with end in of to January, at OCI we compared our a from MGIC additional the assets XXXX. billion and our will repurchase the in be of level available million MGIC's repurchase remaining was Any authorization exhaust expect also which billion OCI approval. current in of MGIC determined had $X.X Future holding company. excess with XXXX, capital target. million excess from At received in Consistent above require we to the company dividends holding Throughout

higher company. to the is the the maintaining past expect we holding levels the mentioned of dividends quarter, liquidity Part company from in months. at retain of outlook future higher of more operating As last liquidity the company for near uncertain is the XX levels at in for than reason holding term, we the

We levels, if will a amount credit, impact we capital extend evaluate that target time could the the or experienced for dividends. which future framework, the company holding challenged environment between dividends dividends will using economic mortgage more but a to our future of reduce consistent

stronger year. position year exceptional outstanding us year, to the quarterly position diluted the and XX% capital by increased a strong we entering shares PMIERs financial with dividend XX%, during than Our combined shareholder end the reduced results the than relative excess position reduce with debt by more million, started our to $XXX by approximately our capital XXXX,

With me turn Tim. that, back to let it over

Timothy Mattke

positive uncertain actions taken additional are In the this these comments year. for of up payment effective been since we borrowers. Nathan. will business. FHFA, Few for our what January, it GSEs October have directionally impact have the on certain pricing Thanks, before X open point, changes of At think we low-down of questions. XXXX changes the we under announced Overall, overall May direction this

we to However, homebuyers. low- key FHFA, stakeholders to work homeownership. low-down access expand for to to to other the GSEs We are continuing and facilitate responsibly first-time of supportive to to efforts access lending payment look forward with industry moderate-income

expect to by encouraged As that to we ahead do the home downward we look into long-term Even expect for to so, mortgage insurance market be meaningful on pressure overall opportunities. smaller private XXXX, further and we opportunity suggest compared XXXX. continue demographics prices remain MI new favorable

execute out close confidence year, our we have for transformed business and continue another flexibility value on strategies stakeholders. beyond believe our As and our in position record all us model create we deliver in business to and to that our strength and of to XXXX

Lastly, we're often differentiates what us. asked

our it's First and foremost, people.

have accomplishments. been people of Our our the cornerstone

of so offerings overcome the We homeownership, of industry partnerships, customers years experience bring XX obstacle there's our listen, we a that superior together, build provide payment. largest the thought borrowers that table. deliver leadership customer and quality Additionally, to we the help solutions to can to and down

sustainable ability has stronger. borrowers dream achieve been and help and never commitment of affordable the homeownership to Our

operator, that, questions. With take let's

Operator

first our question from Barclays. Mark And comes Instructions]. DeVries [Operator from

Mark DeVries

how capital. I alternative the had a you're question thinking uses excess about of about your

competitors acquisition One announced morning. this of interesting your an

or Just on the to of of what I'm that potentially of and/or diversify some either that are your accretive in dampen business latest kind returns wondering capital cyclicality some be ways using your thoughts earnings of the the may to multiple?

Timothy Mattke

That and about a question. from Quite I It's capital diversification basis, to Mark, frankly, that deployment consider it's that appreciate an it's change Tim. really we but be opportunities the think the we standpoint. alternative and and say we It's future, safe we we underlying. date, haven't whether seen the something routine our strategic think franchise move have to a that. could overall of to to benefit think in the on shareholders. seen needle not that would we that

Mark DeVries

net outlook one more that? just then heard portfolio to Nathan, What's relatively guidance And that the XXXX. flat it. for your Got for track the in-force Or comment there? there in the Okay. Should pressure kind question. is yield of I yield? be still premium that

Nathaniel Colson

whether hard was very to I high one forecast, incurred, to yield, or point you accelerated there's to is share that. would be think factors things like losses the single on thing premium are our negative from benefited the in that a Yes, Mark, of drove quota ceded I number that's year couple which those The profit net premium the premiums commissions deals.

large As normal commission, XXXX. profit loss levels, that was, versus more an unusually on impact I'd will to levels certainly say, numbers have the return positive negative numbers, in which

So I premium lead the increase premium a little down all number, yield from think ceded would yield we'd come bit. share the premium on see which that through loss bit, -- benefit would little constant else equal also that quota to the a a come line. to likely in-force with the then But net number, is

Operator

comes our Bose from from KBW. And next question George

Bose George

So just your of just commentary, prices the commentary more on the that that is you're a combination little underwriting Or both? or curious market a or by of your great. or decline share on color tighter driven suggested be anticipating -- in would terms

Timothy Mattke

appreciate on out I some again, a we're it's look we like probably not that time we good not market be to probably feel to want so handle predict it's report And down we exactly able share even as pretty It's on down to are, size. the and just No, that QX. Bose. but more have we question, exact call we to where

safe likely price the risk our ability say far but express as marketplace dimensions allows it's risk as as most you're more that on risk it's for the a views through as do premium that that well to I think as the factors, But you do what combination -- us need of think thing return in price think you to the in you to I risk I mentioned, granularly taking. about the MiQ the reflect get into is return I of terms to that those. think

Bose George

you maintain at size just kind liquidity Okay. that mean What capital does Yes, And of that way the that then that? us to can for holding higher there makes we to a company. of sense. kind you so noted mean, is potential return? I triangulated

Nathaniel Colson

this Yes, is Bose, Nathan.

what quickly, to large and up, XXXX, were of think call out reduction were company right money when we're cash were we is that we that we getting now a holding lot quarter in through there for very I debt particular. And -- need the we that trying to whether throughout using because activities the near liquidity are repurchase fourth a as -- and targets that, and ratios now right shares our at the without leverage continue January. our dividends in

up better on more to update a the As we'll exhaust the from activity repurchase we what HoldCo that with months and as have repurchases. we'll our QX for earnings, that, I you beyond that what Board. But go-forward things is the and like, the from said, OpCo we in are of of looks we repurchase or performance the April and macroeconomic with as dividend both And kind on that our discuss dividends a in expect updates authorization. plan continually X think well

Operator

And question from comes America. our next Bank Mihir Bhatia from of

Mihir Bhatia

expectations those I rate. about just terms just years here on around both that unusual delinquency like to as in like you did going of of new of or a to delinquencies delinquency just ask the we that mentioned? from delinquencies. enter to in? way higher drifts And notices Are normal now losses from there peak Just business, cadence understand regular mean [indiscernible] coming want trying back rate we little just does the nothing

Nathaniel Colson

I question. it's appreciate Mihir, Nathan. Yes. the

opening I levels. new remarks, down still mentioned is I quite the bit think the in level notices as a pre-COVID from of

of but of time. seeing really I still think way throughout or direct we're is of lot more COVID think think delinquencies that do regular seen unusual of I pleased the I with kind that performance, becoming a level kind notices. don't circumstance we're this So credit just we've

the books In that now I that's and delinquencies couple third things. out and we're increase think to typically entering XXXX increased likely there's think seen we've They're seasoning, over see terms We their when in trends, delinquencies. of of XXXX where of fourth a years it of and time. the do

see the terms that And to the claims that of some impact elevated inventory, do foreclosure the resolution I the to too. if paid is of on think of paid pretty very, delinquent as still activity of claim rate. of some impact from of ultimately very that size up, is notices in these if the the up, pick slow. to delinquent starts it's go expect pick that pace claims long And will we the high we remained at is, might as a pace starts reason inventory, could it

other I So we would seen that thing is think pre-COVID seasonality. the have more

But April of lot that historically, for February, March, strong of really got a the muted. seasonal think pretty months I months are credit.

monotonically kind from years with and their it's So as these this and relatively increase insured might here. books don't think we've I than maybe it's we I -- into of point. loans had peak a get notice -- we see a in know if increasing flat do XXXX we more XXXX these think large books But pre-COVID slight lot

Mihir Bhatia

then to And it's if okay. expenses, going just Okay. maybe

bit going expense there but a forward? expense ratio I'm Just expense of thinking How XXXX, your just you For other industry. is terms about on that is just Was a And other like philosophy market seem the was of expense the little understand talking are years, leader like work hand of in a for XXXX, gave know to Just to different like be in numbers was a XXXX, because question different. a about the XXXX? more bit philosophy hand, quite little I change. the there sorry, many, you the around I the a towards? -- having expenses MGIC on does many just little there the you trying lowest ratio guess generally, is catch-up ratio? in target

Timothy Mattke

No, if I'll chime Nathan and appreciate I in question, Mihir. can the Yes. he wants start to.

it actual are long investing over last technology of that big that to run. sure to we is are in it couple as I critical make of think continues the it's years, platform is to that invest data the and we a the analytical Part part felt safe the important over platforms on to legacy, say evolve. think of our that in capabilities but industry invest the we

to from moving Nathan the out much headwind rate really biggest there As in of really, the was expense the up discount pension called QX and as as coming sort that's related anything.

I think us disciplined think be So you should about to and expenses. on focused very as continuing

I be exercise think Nathan although is the us stewards reflection of 'XX. wanting discipline about It's we have spend we'll how talked within dollars think where we in expenses important it. because good of around to over industry, long a to very being run, do this believe you you do that

progress You grow the to sure can platform to you that have make the long continue run. in to over invest and

I very say we manner. as grow change a competitive we a to do as in in want the the invest we but long have run recognition So to to as thoughtful to philosophy in be that as that the wouldn't over much marketplace, can

Mihir Bhatia

just And question. my Got then it. last

those rate, and within innovations Just interest differently? of term? that, buydowns things credit think of, some How longer underwrite you do I offering and like more do that more impact companies guess, those will performance higher kinds the mortgage you

Timothy Mattke

-- to seen Mihir. No, what it's return think I good it's before. innovation And would be concern or the a question, a it's we've

lot a I think news press. I is we'll buydowns, good think get the of

buydowns, no their we are qualifying, hopefully, memories. long anything there The we I think is underwrite that normally, buydown. assuming so, for good rightfully those people news as have that is --

at full of the sort rate. that qualifying the So

a undue loan. us -- being put give comfort over that risk makes not certain that that level So into there's

have concern cannot only making buydown sustain who some that underwritten thought goes payment example. but in get if there the with you But level. way in they're sure there, can a have Always a not long that about borrower at the towards home shock that a the is that

right about happening of feel in So the generally market I that now. aspect comfortable what's

Operator

question And our from Doug Harter from Suisse. Credit next comes

Douglas Harter

outlook. market Just more one on the share

your on kind if your outlook kind anything that's quality 'XX? on outlook that dynamics your leading there's whether of credit of kind XQ wondering that's it's this of and changed the led happening or to kind that, kind Just into of view in to of competitive

Timothy Mattke

Yes.

it's that now. I really view -- our are matter of falling think, actually right Doug, is it's prices a home

hopeful think of our stressful up, reflect more in all I we if think premium we're that. some share And We rates doesn't should we lose Ultimately, environment. right but that to us want getting a we because need that. we're and unemployment okay risk. are what in that gives a ability to cover have we do return views a of to make basis. in the our MiQ to great sure that real-time spike we're that do

And very comfortable with feel it. so we

it's appropriate strong of want that making win very again, much a lot we that the customer company we has a for want to that to we're And as about getting also relationships, be return as for but can, sure business we disciplined deploying capital.

Operator

And comes our next question from Geoffrey Dowling. Dunn from

Geoffrey Dunn

couple questions. of A

if new on risk, 'XX, your charge at premium being for disclosure the we on up to look was over climbing rate the to core it coming your stable respect quarters with the guidance QX. First, on X MRA

that's mix looks So like helping -- was shift to this on it there rate tighter stabilization. I dropped as it But became credit. your quarter, it benefit that a guess would your you premium maybe down that

below of bit the low as throughout act year, mix MRA that How 'XX? rate stays expect rate guidance core we'd X%, premium that as it is If and that builds decline where a a for might that rate charge shift the something again go? to where core does then in

Nathaniel Colson

it's Yes, Geoff, Nathan.

in-force yield. matter think lot for you're out there overall does premium factor a the important a mix really calling the that I

much we will as that it impact as the writing be don't think half factor one market I in expect kind be quarter, large, X% indexed may not an of -- of cause the in volume. around as to we think so would business so as between mix that and so that fourth to that next the guidance big of XXXX have maybe I that business, wrote of think third maybe But we I somewhere something the about that won't back just year level. is

that. on be above side I XX were was with writing that So is I or that X%, and that's quarter if within basis of XX, XX, that well kind range But still points we'd the well third at of business we either that guidance. think the flat comfortable fourth even below think that

Geoffrey Dunn

up, we're Okay. see simplify type claim painted if build-up to into credit from on you go the people, And I myself, then incidence impact the was go was up. the an up were in including of portfolio. how severity of normally XX% simply possible of in in it is much recession benefits for some a assumption, frame wondering that which become become then where I help is of assumptions equity up book, up, built XX% Obviously, environment sort if would you think equity? something a notices the X.X% you scenario of assumptions equity number help heading your go because or the all can existing in that XX% incidence sudden, a X% If from that I it adjusted but

Timothy Mattke

it of Geoff, start, as probably mark-to-market be overall and LTVs the I'll think fair answer bit sub-XX% -- able say question. we I about. something I'll the year. standpoint, to obviously improve end precisely more obviously won't a think to it's Tim, to as little have think mean, probably It's have the I that continued to mean, the and an are it's from I to

way is force. good probably of think half chunk interest is started rise. rates about in we of of to our a home The especially before around for appreciation somewhere good our 'XX XX% book, there's The it, back though, price

like feels same have that appreciation price got the home embedded -- it's doesn't in it. So

loans you're could bit like path, unemployment. at a home feels differently little that really upon different certain respond price it sort looking groupings of to so X a depending And of extent

we're in a if those underlying is, is they home business unemployment challenges, confer of losses. where prices if But it again, decline there when and all

equity I think to that. your point, built-in mitigate helps

will would their because it able come homeowner on feel in our that so a only pay ways a to incidents now reducing And good of built of being we really having mortgage. other also, reducing about towards way that goes long severity not return claim in, equity quite anything resolve but lot of in because there's a business not book to frankly, into because

Geoffrey Dunn

question. last your also unchanged incident the yield? just new average was quarter? then And X% And you provide at can Nathan, money rate Okay. this

Nathaniel Colson

to claim no was the are portfolio? investment of I'm Geoff, the referring sorry, new And the then there part change Yes, notice in you question, rate. the second

Geoffrey Dunn

Yes. on I'm yield sorry, investments. new money

Nathaniel Colson

Yes.

the portfolio portion of and more investment the was of core in X.X%. the kind So like noncash portfolio

Operator

next our question BTIG. comes from Eric Hagen from And

Eric Hagen

say near Curious mortgage housing and, from call lower persistency term. we could a there's away you even if little bit. in in rates you would buyers get especially that if the any fall from nice think rates, term, it, do just And a lead pop which first-time near catalyst lower could meaningful to demand, mortgage

Timothy Mattke

Yes.

we're at think a now. XX% from I standpoint, persistency

would run have think I of From that. a would go loans if that not want low could range the refi. willingness into refi, rate that would been sort that than It a is that there's just we be higher is of a lot say. what be mid-XXs, to get down, in to done rates and

was is as I closer the lot rates see short don't I but down that especially because our have at to but of that equity very back talking XX% think half -- of persistency, a there So here not probably -- challenges to some example, the point in an not could portfolio you're in in-force about -- a really said the lot term the of X% that overall built-up year, in drop be I which either. if ability might our

your So the running I of something feel And good remind half think about question. book the me that that's persistency of Eric, we forward. the second

Eric Hagen

on from buyers rates. the Demand for housing, back lower mortgage especially first-time of

Timothy Mattke

Yes.

as strong in we run. long there's still buyers. home said remain think And demographics think a pent-up I first-time lot of comments, over opening demand for I still the the

did, the people you rose when especially has home they sidelines, as much how by stand quick think rates when so that I stretched. went affordability consider that gets as prices up,

think job? comfortable you an higher higher of shock That of sticker okay, it which shock to time less back do life past sort rates, the I the closer feel I my interest the Is and I and look you of interest event? the purchase say, once issue. Do get historical rate just home? a the have becomes norms right to of longer-term in gets

markets come it the bit more to have home a certain to combination. that extent that and prices make little affordable down And

a chunk over run, So long big market. the and that's again, I of really attractive ultimately, homebuyers for think first-time our

the there of bit with appreciation I whammy moderates with think price sticker rates. over affordability is frankly. double quite that think shock home just of both and But a little time, I

Eric Hagen

point, And on bucket? have Yes. layering that they then where talk up the in fees you following kind That's for And done helpful. LTV like, Can you've typically talk about cut the about can [indiscernible] of the how the seen you same the XX-plus GSE then much risk how you changes. most? much typically cohorts guys demand

Timothy Mattke

at look the Yes. looking We fee what from combined, at try really GSEs October. the did changes all to

good so that to book gets And affected of it. a by our it's say chunk safe

together, sort private expanded I changes there's what in think it think the like put come we categories, would of like to don't ultimately execution, or feel narrowed different all some what I might feel the within a doesn't it's MI. material flow other very dramatically but of versus change to it you MI box

Eric Hagen

XX-plus that flaring much typically in guys bucket, you done And Yes. how there? LTV risk have

Nathaniel Colson

most Yes. at done Eric, business LTV Nathan. our I and mean XX is it's of above. the

new low do it in the that So higher DTI, as that say, we FICO or FICO, have and those XX instance, on LTV businesses X% I has, single highest And of XX XX about it you LTV of of or think or LTV, for I some of X% and DTI category. we in that of about when the XXX the is say, think lower our risk maybe exactly factors if with digits. of but don't above in look business those that. layering, things so think X amount we dimensions, like combinations front at me, below

of of that's if most So the we up, not LTVs a lot include and but given in. XX we operate you kind business, just do space that what of

Operator

back And I would to no over the further turn Tim like remarks. I showing now to questions. for closing call am

Timothy Mattke

thank another our for thank X coworkers winter. hope of Punxsutawney Day, for everyone only all their I interest MGIC. weeks Phil [indiscernible] with [indiscernible] Justin. everyone. Thanks, that to I Thanks, Groundhog phenomenal year. more being And

Operator

for Ladies and Thank today's this conference concludes participating. call. gentlemen, you

You may now disconnect.

MGIC Investment (MTG) 2 Feb 232022 Q4 Earnings call transcript