Radian Q3 Revenue Doubles as Inigo Expands Specialty Earnings

Radian Group Inc. (NYSE: RDN) reported sharply higher third-quarter 2026 revenue following its acquisition of Inigo, as the newly added Specialty business broadened the insurer’s earnings base and offset weaker underwriting results in Mortgage Insurance.

Total revenue rose 106% to $624 million from $303 million a year earlier, driven by the Inigo acquisition, which closed on February 2. Net income from continuing operations increased to $172 million from $153 million, while adjusted pretax operating income advanced to $254 million from $206 million.

Adjusted diluted net operating income was $1.44 per share, compared with $1.15 in the prior-year quarter. Diluted net income from continuing operations under GAAP was $1.28 per share, up from $1.11. Adjusted net operating return on equity increased to 16.3% from 13.9%, while GAAP return on equity from continuing operations was 14.6% versus 13.4%.

Radian said Specialty contributed 34% of adjusted pretax operating income, reflecting the company’s shift toward a more diversified insurance platform. For the first nine months of 2026, Radian generated $1.7 billion of revenue and a total segment combined ratio of 62%. Adjusted net operating return on equity was 14.7%, compared with a GAAP return on equity from continuing operations of 11.9%.

Specialty adds scale and earnings diversification

The Specialty segment recorded $310 million of gross premiums written and $311 million of net premiums earned in the third quarter. Adjusted pretax operating income was $86 million, supported by what Radian described as disciplined risk selection and benign catastrophe activity.

The segment’s combined ratio was 80%, including a 47% loss ratio and a 33% expense ratio. A combined ratio below 100% indicates an underwriting profit. For the year to date, Specialty generated $743 million of net premiums earned, $155 million of adjusted pretax operating income and an 88% combined ratio. Results for 2026 include Inigo from the February 2 acquisition date.

Radian said the business is navigating a challenging rate environment with a focus on margins. The company also cited favorable reserve performance as supporting its assessment of the portfolio’s resilience. Specialty’s reserve for losses and loss-adjustment expenses reached $1.55 billion at September 30, while third-quarter prior-period reserve development reduced the provision for losses by $43 million.

Mortgage insurance remains profitable as losses rise

Mortgage Insurance continued to generate substantial earnings, though its underwriting profitability weakened from a year earlier. Net premiums earned were unchanged at $237 million, and net investment income increased to $56 million from $52 million. Adjusted pretax operating income declined to $206 million from $225 million.

The segment’s provision for losses rose to $32 million from $18 million, lifting its combined ratio to 37% from 27%. The quarterly loss ratio increased to 14% from 8%, while the expense ratio rose to 23% from 19%.

Primary mortgage insurance in force reached a record $286 billion, up from $281 billion a year earlier. Radian wrote about $15 billion of new insurance during the quarter, broadly unchanged year over year. Quarterly annualized persistency was 83%, compared with 84% in the third quarter of 2025, as limited refinancing activity continued to support policy retention.

The primary default rate increased to 2.68% from 2.42% a year earlier, with ending default inventory rising to 26,180 loans. Radian attributed the increase to expected seasonal patterns and said performance across underwriting vintages remained in line with or better than its initial expectations. The presentation also showed that approximately 90% of mortgage defaults historically cure within one year.

Investment income and capital deployment

Radian held $7.1 billion of investment assets, with the fixed-maturity portfolio carrying an A+ weighted-average credit rating and an average duration of four years. The portfolio’s fixed maturities had a 4.2% book yield and a 5.4% market yield. Consolidated net investment income increased to $77 million from $63 million in the year-earlier quarter.

Book value was $35.78 per share at September 30. Adjusted book value per share, which excludes accumulated other comprehensive income and includes cumulative dividends since the first quarter of 2017, was $45.53.

From January 1 through October 31, Radian spent $379 million repurchasing 8% of the shares outstanding at the beginning of the period and paid $138 million in dividends. The company also deployed $1.7 billion toward acquisitions. Management’s stated capital priorities include supporting organic insurance growth, pursuing accretive transactions, returning excess capital through dividends and repurchases, and managing holding-company leverage.

At quarter-end, holding-company debt totaled $1.07 billion, producing a debt-to-capital ratio of 18.7%. Available holding-company liquidity was $376 million, excluding a $500 million unsecured revolving credit facility. Radian Guaranty remained compliant with Private Mortgage Insurer Eligibility Requirements and had $1.48 billion, or 38%, of available assets above its minimum requirement.

Outlook and risks

Management plans to focus on profitable growth in both Mortgage and Specialty Insurance while using shared underwriting, analytics and capital-management capabilities across the businesses. The presentation did not provide numerical forward guidance.

Key uncertainties include the integration and future performance of Inigo, a softening premium-rate environment in Specialty, catastrophe and severe economic losses, housing-market and mortgage-credit conditions, and the ability to maintain required capital and liquidity. Radian also faces regulatory limits on cash distributions: while an intercompany note used to help fund the Inigo acquisition remains outstanding, dividends from Radian Guaranty require prior approval from the Pennsylvania Insurance Department for at least three years and potentially as long as five years after the acquisition closing.