...U.S. Market: The U.S. private mortgage insurance (USMI) industry's earnings and capital base were significantly depleted by the recession and collapse of home prices in 2007¡2011. Heavy losses put downward pressure on mortgage insurers' Insurer Financial Strength (IFS) ratings, with most moved to low in the secure range and some to the vulnerable range. Most recently, however, the outlook for the industry has improved. Decline and Recovery: Following the economic downturn, the USMI industry experienced a simultaneous decline in new premiums combined with a severe increase in loss costs. The industry's combined ratio more than tripled and remained at severely elevated levels for five years. Most recently, the industry has returned to profitability, although net written premium remains well below peak levels. Changing Composition: All market participants experienced meaningful losses during the downturn, although some fared better than others. Of the eight major USMI writers that comprised...
