Enact Raises 2026 Shareholder Payout Plan To About $600 Million As Claims Costs Cut Quarterly Profit
The mortgage insurer's third-quarter net income fell to $159 million from $175 million, but AM Best upgraded its ratings.
Enact Holdings, the Raleigh-based private mortgage insurer, now anticipates returning about $600 million to shareholders in 2026, it said Wednesday, even as third-quarter profit slipped from the second quarter on higher claims costs.
Profit slips on seasonal delinquencies
Net income was $159 million, or $1.15 per diluted share, against $175 million in the second quarter and $163 million a year earlier, according to the 8-K. Adjusted operating income was $164 million, or $1.19 per share, down from $177 million in the second quarter.
Losses incurred rose to $47 million from $33 million, lifting the loss ratio, the share of premiums consumed by claims, to 20% from 14%. Excluding reserve releases, the company attributed the sequential increase mainly to higher new delinquencies consistent with seasonal patterns. The quarter's reserve release was $37 million, the same as in the second quarter.
Net premiums earned were $242 million, and operating expenses were $50 million. Return on equity was 12.0%, down from 13.0%.
Buybacks, dividend and a rating upgrade
Enact bought back about 2.4 million shares for roughly $118 million in the quarter, at an average $48.19. Through November 3 it bought about 1.3 million more for $57 million, and about $200 million remains on its $500 million authorization. The board declared a $0.24 quarterly dividend payable December 17 to holders of record November 25.
The final amount and form of the 2026 capital return depends on business performance, market conditions and regulatory approval, the company said. AM Best raised the financial strength rating of its insurance subsidiaries to A from A-, and the parent's long-term issuer rating to bbb from bbb-, with stable outlooks.
Capital cushion after a $200 million dividend
Enact, which sells private mortgage insurance covering part of the unpaid balance on low-down-payment home loans, completed a $200 million dividend from its main insurance subsidiary to the parent. The company said the money will mainly support returning capital to shareholders. The parent held $286 million in cash plus $427 million of invested assets at September 30.
The dividend pulled the PMIERs sufficiency ratio, which measures assets held against mortgage insurer capital requirements, to 158% from 161%, or about $1.8 billion above requirements. New insurance written was $14 billion, down 7% from the second quarter on lower refinancing, and insurance in force was $275 billion.
Management holds its earnings call Thursday at 8:00 a.m. Eastern.
Book value per share was $38.30, down from $39.06 in the second quarter, while book value excluding unrealized securities losses rose to $40.47 from $39.66.
Sources
- 8-K Filing — Enact Holdings, Inc. (ACT) — SEC EDGAR
- Exhibit a3q26earningsrelease.htm — Enact Holdings, Inc. 8-K exhibit — SEC EDGAR
- Exhibit enactqfs3q26final.htm — Enact Holdings, Inc. 8-K exhibit — SEC EDGAR
