Essent Group Ltd Q1 2022 Presentation

Disclaimer

This presentation may include"forward-lookingstatements"which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will,""should," "expect,""plan," "anticipate," "believe,""estimate," "predict,"or "potential" or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: the impact of COVID-19 and related economic conditions; changes in or to Fannie Mae andFreddie Mac (the"GSEs"),whether through Federal legislation, restructurings or a shift in business practices; failure to continue tomeet the mortgage insurer eligibility requirements of the GSEs; competition for customers; lenders or investors seeking alternatives to private mortgage insurance; deteriorating economic conditions (including inflation, rising interest rates and other adverse economic trends); an increase in the number of loans insured through Federal government mortgage insurance programs, including those offered by the Federal Housing Administration; decline in new insurance written and franchise value due to loss of a significant customer; decline in the volume of low down payment mortgage originations; the definition of "Qualified Mortgage" reducing the size of the mortgage origination market or creating incentives to use government mortgage insurance programs; the definition of "Qualified Residential Mortgage" reducing the number of low down payment loans or lenders and investors seeking alternatives to private mortgage insurance; the implementation of the Basel III Capital Accord discouraging the use of private mortgage insurance; a decrease in the length of time that insurance policies are in force; uncertainty of loss reserve estimates; our non-U.S. operations becoming subject to U.S. Federal income taxation; becoming considered a passive foreign investment company for U.S. Federal income tax purposes; and other risks and factors described in Part I, Item 1A"Risk Factors"of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on February 16, 2022, as subsequently updated through other reports we file with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this presentation, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Essent Is A Leading Mortgage Insurer

Company Overview

• •Essent Group Ltd. is a Bermuda-based holding company that went public in 2013, and is traded on the New York Stock Exchange (NYSE: ESNT)

• •Two primary operating companies: Essent Guaranty, Inc.

  

  (Radnor, PA) and Essent Reinsurance Ltd. (Hamilton, Bermuda)

• •Serves the U.S. housing finance industry by offering mortgage insurance and reinsurance to support home ownership

• •Transformed business model from "Buy and Hold" to "Buy,

  Manage & Distribute" through use of programmatic reinsurance

• •Developed risk-based pricing engine EssentEDGE®, and the next generation of EssentEDGE®, a cloud-based AI pricing platform

• •Essent Guaranty, Inc. is rated A3 by Moody's, A (Excellent) by

  A.M. Best, and BBB+ by S&P

Capital Distribution To Shareholders

• •In April, we completed our $250 million share repurchase program authorized in May 2021, having purchased a total of 5.6 million ESNT shares. Year-to-date we purchased 2.1 million ESNT shares for $92.2 million

• •In conjunction with our 1Q22 Earnings Release, we announced

  Board approval of a new share repurchase program of $250 million and an increase of the quarterly dividend to $0.21 per common share, payable during 2Q22

IIF ($B)

1Q22$206.8

4Q21$207.2

NIW ($B)

$12.8

$16.4

New Defaults (K)

6.2

5.8

Portfolio Default Rate Net Income ($M) Combined Ratio

1.93% $274.2 (30.7%)

2.16% $181.0 17.4%

Annualized ROE

Shareholders' Equity ($B)

26.0% $4.2

17.2% $4.2

PMIERs Sufficiency Ratio174%177%

% IIF With Reinsurance Protection

90%90%

Risk-To-Capital Ratio(1)9.9:110.4:1

Recent Developments

• •In March, we executed our second quota share reinsurance program to cede 20% of 2022 NIW to a panel of highly rated third-party reinsurers. As of March 31, 2022, 90% of IIF is subject to reinsurance protection

• •Provision for Losses & LAE for the quarter was a benefit of $106.9 million, including the benefit of $101.2 million from a change in estimate on 2Q-3Q20 COVID default reserves

1The combined risk-to-capital ratio equals the net risk in force of Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. divided by the combined statutory capital of these U.S. insurance companies.

Delivering Shareholder Value

Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Mar-22

Key Milestones in Essent's Evolution

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Essent Group Ltd. published this content on 06 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2022 10:42:24 UTC.