Enact Holdings Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mihir Bhatia - Bank of America - Analyst : Hi, good morning. Thank you for taking my question. I wanted to just start with something you mentioned, Rohit, about just being prepared for uncertainty and specifically around maybe underwriting and pricing. I know you reiterated the outlook for base premium rates to be relatively REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:00PM, ACT.OQ - Q1 2025 Enact Holdings Inc Earnings Call stable. But that's obviously at a portfolio level. I was curious what you're seeing in the market or if you've done taken actions in April, right? Just given all the macro noise, the uncertainty increasing in April. Is there -- how is the industry Enact, however you're comfortable answering that reacted to that? Or have you all so far because the data hasn't changed, you've maintained the pricing and underwriting standards or not really tighten and change? I'm just curious, how you're reacting to that uncertainty increasing from an underwriting perspective.

Question: Mihir Bhatia - Bank of America - Analyst : Thank you. And then just one other question, again on government policy, and I know it's evolving. Has there been any on-the-ground impact from -- of any of the changes we've heard about so far? And any changes, in particular, I'm curious about like on the loss mitigation side because I know there's been obviously post-COVID -- COVID loss mitigations were basically made -- were extended and what continues and they have been a pretty big beneficiary of cures. Have you seen any impact from any of those changes?Thank you.

Question: Mihir Bhatia - Bank of America - Analyst : Okay. Thank you for taking my questions. I'll get back into queue.

Question: Doug Harter - UBS - Analyst : Thanks. I guess along the lines of pricing. In the last couple of quarters, we've -- we have seen some shifts in market share from other players. Just hoping you could talk more about the pricing dynamics and kind of what you see that leads to market share changes or just how sensitive the market is to price?

Question: Doug Harter - UBS - Analyst : It does. Thank you.

Question: Ric Shane - JPMorgan - Analyst : Good morning guys. Thanks for taking my question. So as we sit today at the end of the first quarter of '25, if we total up the insurance in-force from '23, '24 in the first quarter, it represents about 38% of your book. If we did the same exercise at the end of the first quarter of '22, it would have been 74% of your book. So the book was almost twice as concentrated three years ago in recent cohorts as it is today. Obviously, that's a function of what's happened with rates, with purchase activity. We all understand the dynamics. I'm curious as you guys look at a portfolio that was three years ago, very unusual in historical context, a portfolio today that's very unusual in historical context, what you think are sort of the best case scenarios of how this evolves and what are the biggest risks? Because this industry is facing a different profile, I wouldn't even say challenges, it's just characterized differently today than it has been before. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 12:00PM, ACT.OQ - Q1 2025 Enact Holdings Inc Earnings Call

Question: Ric Shane - JPMorgan - Analyst : Got it. I definitely agree with that. If I can ask one follow-up. When -- so the older cohorts have benefited immensely from HPA. They were not underwritten with any expectation that, that was going to happen. That would have been imprudent and that was a windfall for the industry. You had alluded to your underlying assumptions. Do you -- as you're writing policies today have a more conservative assumption on HPA going forward than you were applying three years ago because of the sharp run-up in home prices? Or is that -- do you assume a kind of consistent HPA, but now just off a higher base.

Question: Ric Shane - JPMorgan - Analyst : Got it. Okay, terrific. Thanks, guys. Thank you very much.

Question: Bose George - KBW - Analyst : Hey, everyone, good morning. Actually, have you all seen any signs of cancellation rates increasing? Just obviously, these books -- the persistency rates remains high and with higher for longer that could continue. So just any thoughts there?

Question: Bose George - KBW - Analyst : Okay, thanks. And then actually, the other income line, so I guess, is that mainly the reinsurance income. And also, is that just premiums? Or is there

Question: Bose George - KBW - Analyst : Okay. But the run rate this quarter is kind of a reasonable number?

Question: Bose George - KBW - Analyst : Okay. Okay, great. Thank you.

Question: Bose George - KBW - Analyst : Okay, great. Thanks.