Essent Group Ltd Q1 2023 Presentation - Insurance News | InsuranceNewsNet

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May 5, 2023 Newswires
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Essent Group Ltd Q1 2023 Presentation

U.S. Regulated Equity Markets (Alternative Disclosure) via PUBT

ESSENT GROUP LTD.

INVESTOR PRESENTATION 1Q23

NYSE: ESNT

May 5, 2023

Disclaimer

This presentation may include "forward-looking statements" 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: changes in or to Fannie Mae and Freddie Mac (the "GSEs"), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet 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); the impact of COVID-19 and related economic conditions; 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, 2022 filed with the Securities and Exchange Commission on February 17, 2023, 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 GROUP LTD. | NYSE: ESNT

© 2023 Essent Group Ltd. All rights reserved. | essentgroup.com | 2

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

4Q22

1Q23

IIF ($B)

$227.1

$231.5

NIW ($B)

$13.0

$12.9

New Defaults (K)

7.5

7.0

Portfolio Default Rate

1.66%

1.57%

Net Income ($M)

$147.4

$170.8

Combined Ratio

24.6%

22.7%

Annualized ROE

13.5%

15.0%

Shareholders' Equity ($B)

$4.5

$4.6

PMIERs Sufficiency Ratio

174%

168%

% IIF With Reinsurance Protection

98%

96%

Risk-To-Capital Ratio(1)

10.2:1

10.3:1

Recent Developments

  • On February 2nd, Essent US Holdings entered into an agreement to acquire the title insurance operations from a subsidiary of Finance of America Companies for $100 million.

Capital Distribution To Shareholders

  • In conjunction with our 1Q23 earnings release, we announced Board approval of a quarterly dividend of $0.25 per common share, payable during 2Q23.
  • Year-to-datethrough April 30th, we repurchased approximately 800K common shares for $32 million.

1 The 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.

ESSENT GROUP LTD. | NYSE: ESNT

© 2023 Essent Group Ltd. All rights reserved. | essentgroup.com | 3

Delivering Shareholder Value

BOOK VALUE PER SHARE GROWTH

Annualized growth rate of 19.4% since December 31, 2013

$10.33

$8.35

$41.44

$38.73

$34.36

$30.34

$24.11

$19.71

$14.43

$12.08

$43.18

Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Mar-23

Strong Cash Flows

& Earnings

Programmatic

Reinsurance

Protection

Steadily Increasing

Dividends

Disciplined Capital

Management

ESSENT GROUP LTD. | NYSE: ESNT

© 2023 Essent Group Ltd. All rights reserved. | essentgroup.com | 4

Key Milestones in Essent's Evolution

Launch

of Essent

Guaranty

Essent obtains GSE approvals and writes first MI policy

IPO

Essent completes IPO; emerges as a key player in future of MI

Launch of

Essent Re

Essent Re completes first GSE risk share deal and reinsures Essent Guaranty

First CRT

Essent initiates its first credit- risk transfer program

EssentEDGE®

Essent launches proprietary innovative pricing platform

EssentEDGE® Next Generation

  1. cloud-basedAI pricing platform

Launch of EssentVentures

2010

2013

2014

2018

2019

2021

2009

2023+

25+ years Experienced Management Team

Essent Advantage

Strong

Conservative

Highly

Efficient

Capital

Financial

Operating

Position

Leverage

Platform

Best in Class

Analytics &

Technologies

ESSENT GROUP LTD. | NYSE: ESNT

© 2023 Essent Group Ltd. All rights reserved. | essentgroup.com | 5

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Disclaimer

Essent Group Ltd. published this content on 05 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2023 10:37:19 UTC.

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