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February 11, 2022 Newswires
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Essent Group Ltd Q4 2021 Presentation

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

ESSENT GROUP LTD.

INVESTOR PRESENTATION 4Q & FY-21

NYSE: ESNT

February 11, 2022

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: the impact of COVID-19 and related economic conditions; 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; 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; deteriorating economic conditions; 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, 2020 filed with the Securities and Exchange Commission on February 26, 2021, 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

© 2022 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

4Q21

3Q21

IIF ($B)

$207.2

$208.2

NIW ($B)

$16.4

$23.6

New Defaults (K)

5.8

5.1

Portfolio Default Rate

2.16%

2.47%

Net Income ($M)

$181.0

$205.4

Combined Ratio

17.4%

15.9%

Annualized ROE

17.2%

19.9%

Shareholders' Equity ($B)

$4.2

$4.2

PMIERs Sufficiency Ratio

177%

162%

% IIF With Reinsurance Protection

90%

75%

Risk-To-Capital Ratio(1)

10.4:1

10.5:1

Recent Developments

  • Executed the Radnor Re 2021-2Insurance-LinkedNote ("ILN") transaction during 4Q21, with 90% of IIF subject to reinsurance protection at year end
  • Amended and extended our credit facility from a total of $625m to $825m in December 2021
  • Announced the promotion of Chris Curran to President of Essent Guaranty, Inc. effective January 1, 2022

Capital Distribution To Shareholders

  • Purchased 3,469,560 ESNT shares through December 31, 2021, or $157.8 million of the $250 million authorized under our share repurchase program announced in May 2021
  • Announced Board approval in conjunction with the 4Q & FY-21 earnings release to increase the quarterly dividend to $0.20 per common share, payable during 1Q22

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

© 2022 Essent Group Ltd. All rights reserved. | essentgroup.com | 3

Delivering Shareholder Value

BOOK VALUE PER SHARE GROWTH

Annualized growth rate of 21.1% from December 31, 2013

$10.33

$8.35

$38.73

$34.36

$30.34

$24.11

$19.71

$14.43

$12.08

Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Strong Cash Flows

Programmatic

Steadily Increasing

Initiated Share

Reinsurance

& Earnings

Dividends

Repurchases

Protection

ESSENT GROUP LTD. | NYSE: ESNT

© 2022 Essent Group Ltd. All rights reserved. | essentgroup.com | 4

Buy, Manage & Distribute Operating Model

CREDIT RISK

TRANSFER (CRT)

NEXT GENERATION OF ESSENTEDGE®

  • Sophisticated risk-based pricing engine and an effective risk management tool
  • Increased lender adoption and integration with third party loan origination and pricing systems
  • The next generation of EssentEDGE® is powered by machine learning. It evaluates borrower credit data with 400+ attributes in calculating and delivering an MI rate in ~3 seconds
  • Long-termadvantage in pricing and managing credit risk

PORTFOLIO MONITORING

  • Leverage underwriting standards to adjust new business flows
  • Shape portfolio risk profile
  • Robust internal risk analytics and quality assurance

CREDIT RISK TRANSFER (CRT)

  • Mitigate retuvolatility during down cycles
  • Diversify source of capital through Insurance-Linked Notes
    ("ILN"), Excess of Loss ("XOL"), and Quota Share Reinsurance ("QSR") transactions
  • Manage housing cycles with stronger franchise

ESSENT GROUP LTD. | NYSE: ESNT

© 2022 Essent Group Ltd. All rights reserved. | essentgroup.com | 5

This is an excerpt of the original content. To continue reading it, access the original document here.

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Disclaimer

Essent Group Ltd. published this content on 11 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 February 2022 11:36:23 UTC.

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