It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
StockCall announced that it has issued technical analysis and charting reports on MGIC and Radian.
Property and Casualty a 'Soft' Industry
During the late 1990s there was a substantial decline in property and casualty premiums, which is why the industry is considered as "soft". This is nothing new for the industry as the last time the property and casualty market was really "hard" was way back in 1985. There are however always exceptions related to geographies (major catastrophes) and some particular types of property and casualty insurance.
As the property and casualty insurance companies struggle with challenges posed by increased competition, uncertainty surrounding scope and timing of regulatory changes and gradual increase in claims including weather related claims of enormous proportions such as with the recent super storm Sandy. The encouraging factor, however, is that new companies are not showing up with the same speed as before. What the industry needs to do is to adopt a holistic approach to opportunities and the challenges it faces.
In the first nine months of 2012 there was a difference of $8 billion between new insurance written by the two companies. While RDN wrote new insurance worth $25.4 billion, MTG could manage only $17.1 billion.
Under normal conditions, the profit margin of both companies is expected to be similar, which means that it is safe to presume that the difference between profits of both companies will be in the same proportion as the premiums collected by them. Going by that logic, profit of MTG should be roughly one-third of RDN's profit.
That, however, is a very primitive way of assessing the long- term effect of new insurances written by the two companies. The fact is that in an effort to boost its cash flows, Radian has been undercutting competitors in single premium policies, which form 35 percent of the new insurance it writes. For a fair comparison, single premium business needs to be removed from new insurance written by Radian.
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Mortgage Guaranty Insurance Corp., the principal subsidiary of MGIC Investment Corp. is a private mortgage insurer in the U.S., Guam and Puerto Rico and offers an alternative to federal government insurance programs.
Radian Group is a credit enhancement company focusing on first- lien residential mortgage insurance in the domestic market.
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