A.M. Best Assigns Credit Ratings to Mortgage Guaranty Insurance Corporation and Certain Subsidiaries
The ratings reflect MGIC’s balance sheet strength, which
MGIC’s risk-adjusted capital, as measured by the Best Capital Adequacy Ratio (BCAR), is currently at the strongest level both on a stressed and unstressed basis. Shareholders’ equity at MGIC has increased in the past five years and
MGIC’s operating performance is assessed as adequate based on positive underwriting results as reflected in the loss and combined ratios of its mortgage insurance business during the past few years. MGIC’s historical loss and combined ratios, which spiked significantly during 2008-2012, have declined meaningfully over the past five years, reflecting improvements in the housing market. MGIC’s expense ratio remains one of the lowest in the mortgage insurance industry. MGIC’s overall operating performance over the past five years has been fueled by favorable macroeconomic conditions that greatly impact the quality of mortgage originations and the credit profile of borrowers.
MGIC’s business profile is assessed as limited as the company is a monoline (re)insurer. Furthermore, it faces stiff competition not only from other private mortgage insurers and governmental agencies (i.e.,
MGIC’s overall ERM assessment is appropriate, as the company employs a robust ERM framework and infrastructure that is embedded across the company. MGIC’s ERM framework is commensurate with the size, nature and complexity of its mortgage insurance business.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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