MGIC Investment Corp (NYSE:MTG) reported second-quarter 2017 operating net income per share of 31 cents that surpassed the Zacks Consensus Estimate by 24%. The bottom line also improved 19.2% year over year.
Owing to higher new insurance written in this quarter, there was a fair rise in the insurance in force. However, claims declined year over year. Meanwhile, the expense ratio remained low.
Operational Update
MGIC Investment recorded total operating revenue of $263.3 million, down about 0.1% year over year on lower premiums earned. Net investment income however improved 9.2% year over year to $29.7 million.
New insurance written was $12.9 billion in the reported quarter, up 2.4% from $12.6 billion in the year-ago quarter on higher insurance written in the quarter.
As of Jun 30, 2017, the company’s primary insurance in force was $187.3 billion, up 5.5% year over year.
Persistency, or the percentage of insurance remaining in force from the preceding year, was 77.8% as of Jun 30, 2017. The company had recorded persistency of 79.9% as of Jun 30, 2017.
Percentage of delinquent loans, including bulk loans, was 4.11% as of Jun 30, 2017, compared with 5.30% as of Jun 30, 2016.
Primary delinquent inventory declined nearly 21.4% year over year to $41.3 billion worth of loans.
Net underwriting and other expenses totaled $41.1 million, up 9% year over year.
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Losses incurred in the quarter narrowed to $27.3 million from $46.6 million in the year-ago quarter. The $52-million reduction in losses was due to the positive development on the company’s primary loss reserve. This apart, the company witnessed a lesser number of new delinquent notices and a lower claim rate.
Total loss and expenses contracted 16% year over year to $82.6 million due to lower losses.
Financial Update
Book value per share, a measure of net worth, jumped nearly 9.6% year over year to $8.08 as of Jun 30, 2017.
As of Jun 30, 2017, MGIC Investment had $127 million in cash and investments, down 58% year over year.
Risk-to-capital ratio was 11:3:1 as of Jun 30, 2017, compared with 13:2:1 as of Jun 30, 2016.
Zacks Rank
Currently, MGIC Investment carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line at Brown & Brown, Inc. (NYSE:BRO) and Fidelity National Financial, Inc. (NYSE:FNF) beat the respective Zacks Consensus Estimate, while The Progressive Corporation (NYSE:PGR) missed the same.
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Brown & Brown, Inc. (BRO): Free Stock Analysis Report
MGIC Investment Corporation (MTG): Free Stock Analysis Report
Progressive Corporation (The) (PGR): Free Stock Analysis Report
Fidelity National Financial, Inc. (FNF): Free Stock Analysis Report
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