Magazine article American Banker

Insurers' Earnings for 1Q Show Continued Strength

Magazine article American Banker

Insurers' Earnings for 1Q Show Continued Strength

Article excerpt

The mortgage insurance industry has had its share of controversy lately. In the last month, automatic cancellation of mortgage insurance has been a hot topic of debate in Congress and the New York State Insurance Department has questioned the legality of captive reinsurance.

But the news isn't all bad. Three mortgage insurers reported their first-quarter earnings last week, and their results show the industry is continuing to post healthy gains.

Net income increased 20% for CMAC Investment Corp., 33% for PMI Group, and 35% for Triad Guaranty Inc. CMAC earned 71 cents per share, also an increase of 20%, slightly exceeding Wall Street analysts' consensus estimate of 70 cents.

Delinquency rates rose slightly in the first quarter from the fourth quarter of last year for PMI and Triad, but fell for CMAC. CMAC's delinquency rate was 2.3%, down from 2.38%.

"We are very pleased with the improvement in our default results for the quarter, which have begun to reflect positive signs in California," said Frank P. Filipps, president and chief executive of Philadelphia-based CMAC.

Analysts added that the increase in PMI's default rate was less than expected because of the improving conditions in California.

San Francisco-based PMI, the nation's third-largest mortgage insurer, reported earnings per share of $1.09, a 16% increase from last year's first quarter. Analysts were expecting $1.11.

PMI's new insurance written in the first quarter was $3.1 billion, down from $3. …

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