MGIC Q3 2026 Profit Falls as Insurance Losses Rise

MGIC Investment Corporation reported lower third-quarter earnings as higher insurance losses offset growth in its mortgage insurance portfolio, while diluted earnings per share edged above the prior-year level amid a reduced share count.

The private mortgage insurer recorded GAAP net income of $175.0 million for the quarter ended September 30, 2026, down from $191.1 million a year earlier. Total revenue declined to $299.1 million from $304.5 million, while net losses incurred increased to $23.9 million from $10.9 million.

Diluted earnings per share rose to $0.85 from $0.83, and adjusted net operating income per share was also $0.85. Diluted weighted-average shares fell to 205.4 million from 231.4 million in the prior-year quarter. Annualized return on equity was 14.2%, compared with 14.8% a year earlier.

Insurance portfolio expands as loss ratio rises

Primary insurance in force reached $307.3 billion at quarter-end, up from $300.8 billion a year earlier and $304.8 billion at the end of the second quarter. New insurance written totaled $17.1 billion, compared with $16.5 billion in the third quarter of 2025. Cancellations and principal reductions were $14.6 billion, leaving insurance in force 0.8% higher during the quarter.

Primary risk in force increased to $82.5 billion from $80.6 billion a year earlier. The portfolio yield was 37.9 basis points, little changed from 38.3 basis points in the prior-year period.

The quarterly loss ratio rose to 10.0% from 4.5%, reflecting the increase in net losses incurred. The underwriting expense ratio improved to 19.1% from 21.1%, resulting in a combined ratio of 29.1%, compared with 25.6% a year earlier.

MGIC reported a count-based delinquency rate of 2.52% as of September 30, with approximately 28,000 delinquent loans and average risk in force of $66,000 per delinquency. The company characterized the insured portfolio as having strong underlying credit quality, though mortgage defaults and resulting claims remain central risks to its results.

For the first nine months of 2026, net income totaled $522 million and new insurance written reached $49.3 billion. The year-to-date combined ratio was 29.4%, while annualized return on equity was 13.9%.

Capital position remains above requirements

MGIC’s Private Mortgage Insurer Eligibility Requirements sufficiency ratio was 195% at quarter-end, up from 174% a year earlier. Excess capital under the framework increased to $2.8 billion from $2.5 billion.

The company said its reinsurance program provided $3.2 billion of PMIERs capital through quota-share, insurance-linked note and excess-of-loss arrangements. The program is designed to transfer both first-loss and tail risk across reinsurers and capital-markets participants.

Total statutory capital was $5.86 billion at the end of the quarter, including $4.92 billion of contingency reserves. MGIC said $345 million of contingency reserves had been released during the first nine months of 2026.

Holding-company liquidity stood at $0.8 billion, compared with $0.9 billion a year earlier. Management’s stated capital approach is to maintain enough liquidity to service debt and support the current shareholder dividend, while excess capital may be used for dividends, share repurchases or strategic initiatives.

Tangible book value per share increased to $25.68 from $23.58 a year earlier and $25.08 in the second quarter. GAAP book value per share was $24.06, up from $22.87 a year ago but below $24.27 in the preceding quarter. Shareholders’ equity declined to $4.85 billion from $5.17 billion a year earlier, while period-end shares outstanding fell to 201.5 million from 226.2 million.

MGIC did not provide a formal earnings or insurance-volume forecast in the presentation. Its operating priorities remain disciplined risk-based pricing, portfolio surveillance, reinsurance and capital management. The company cautioned that forward-looking statements rely on current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially.