Enact Q2 2026 Earnings: Investment Income Supports Profit Growth

Enact Holdings (Nasdaq: ACT) reported Q2 2026 total revenue of $317.3 million, up 4.1% from $304.9 million a year earlier, while diluted EPS increased to $1.25 from $1.11. Net income rose 4.2% to $174.8 million as higher investment income and smaller net investment losses offset higher incurred losses and a smaller reserve release.

Core earnings results

Premium revenue was nearly unchanged year over year, so the increase in total revenue came mainly from investments. Net investment income rose 11.1% as a higher portfolio book yield and greater average invested assets supported returns.

Adjusted operating income increased more slowly than reported EPS. The difference partly reflects a 6.9% reduction in diluted weighted-average shares, from 150.7 million to 140.3 million.

Adjusted operating return on equity was 13.2%, compared with 13.4% in the prior-year quarter.

Insurance portfolio and new business

New insurance written reached $15 billion, up 15% from $13 billion a year earlier. Monthly premium policies represented 96% of new business, while purchase originations accounted for 87%.

Primary insurance in force increased 2% to $274 billion from $270 billion. Persistency remained elevated at 80%, although it declined from 82% a year earlier. Despite the larger insured portfolio and stronger new business volume, net premiums earned remained approximately flat.

Profitability and capital position

Credit costs moved higher year over year. Losses incurred increased to $33.3 million from $25.3 million, while the loss ratio rose to 14% from 10%. The quarter included a $37 million reserve release, down from $48 million in Q2 2025, reducing the benefit to earnings from prior-period reserves.

Operating expenses were $52 million, down from $53 million a year earlier, and the expense ratio improved to 21% from 22%. The current quarter included approximately $1 million of one-time reorganization costs.

At June 30, 2026, the holding company had $236 million of cash and cash equivalents and $425 million of invested assets. PMIERs sufficiency was 161%, or approximately $1.9 billion above requirements, compared with 165% and approximately $2.0 billion a year earlier. Book value per share increased to $39.06 from $35.20, while book value excluding accumulated other comprehensive income rose to $39.66 from $35.90.

Investment income and buybacks drove more growth than premiums

The quarter’s earnings composition is more important than the headline revenue increase. Total revenue grew by approximately $12.4 million even though premiums declined slightly. A $7.3 million increase in net investment income and a $5.1 million reduction in net investment losses provided most of the revenue improvement.

Those benefits were partly offset by an approximately $8.0 million increase in incurred losses. As a result, net income grew 4.2%, while diluted EPS rose 12.6% because the diluted share count declined. This indicates that investment returns and capital allocation contributed more to per-share growth than premium expansion during the quarter.

Capital return guidance

Enact increased its full-year 2026 capital return guidance to between $550 million and $600 million. The final amount and form remain dependent on business performance, market conditions, and regulatory approvals.

During Q2, Enact repurchased approximately 2.2 million shares at an average price of $42.58, spending about $93 million, and paid approximately $34 million in dividends. Through July 31, it repurchased another 0.7 million shares for $30 million. Approximately $345 million remained under the existing $500 million repurchase authorization.

The board also declared a quarterly dividend of $0.24 per common share, payable September 17, 2026, to shareholders of record on August 20, 2026.

Recent insider transactions

The supplied six-month insider summary shows 391,917 shares acquired across 22 transactions and 3,026,758 shares sold across nine transactions, resulting in net sales of 2,634,841 shares. Most of the recent fully specified sales were made by Genworth Holdings, a beneficial owner of more than 10% of Enact’s shares; the data does not state the reasons for the transactions.

Risks investors need to watch

• Higher credit costs: The loss ratio increased to 14% from 10%, while incurred losses rose and reserve releases became smaller. Continued movement in this direction would pressure underwriting profitability.
• Limited premium growth: Premiums were approximately flat despite 2% growth in insurance in force and a 15% increase in new insurance written. Persistency also declined by two percentage points year over year.
• A lower relative capital cushion: Enact remained approximately $1.9 billion above PMIERs requirements, but its sufficiency ratio declined to 161% from 165%. The planned level of capital returns also remains subject to operating results, market conditions, and regulatory approval.
• Mortgage-market volatility: Management described the operating environment as volatile. Changes in mortgage activity can affect new insurance volumes and policy persistency.

Summary

Enact’s Q2 2026 earnings improved, but the main support came from investment income, reduced investment losses, and a lower share count rather than premium growth. New insurance written and insurance in force increased, while higher credit losses and smaller reserve releases constrained operating profit growth. The next areas to monitor are the loss ratio, premium conversion from portfolio growth, PMIERs capital sufficiency, and execution of the higher 2026 capital return plan.