On this page of StockholderLetter.com we present the latest annual shareholder letter from Essent Group Ltd. — ticker symbol ESNT. Reading current and past ESNT letters to shareholders can bring important insights into the investment thesis.

 •  3/25/2025 Letter Continued (Full PDF)
 •  4/6/2023 ESNT Stockholder Letter
 •  3/29/2024 ESNT Stockholder Letter
 •  More "Insurance Brokers" Category Stockholder Letters
 •  ESNT Benford's Law Stock Score = 96

ESNT Shareholder/Stockholder Letter Transcript:

2024
ANNUAL
REPORT

To Our Shareholders,
I am pleased to report that Essent delivered strong
financial results in 2024. Strong credit quality and
resilience in the housing and labor markets continued
to drive credit performance, while interest rates remain
a tailwind for persistency and investment income.
In 2024, we earned $729 million or $6.85 per diluted share,
Credit and Interest Rates     Two Drivers of Our Results
compared to net income of $696 million or $6.50 per diluted
With an MI franchise levered to the economy and housing,
share in 2023, while generating a 14% return on average
credit performance remains the primary driver of our results.
equity (ROE). Total revenues increased by 12% to $1.2 billion
As previously noted, the MI industry has benefited from the
in 2024, attributable to 2% growth of the mortgage insurance
post-GFC regulatory credit guardrails, which are firmly in place
(MI) insurance-in-force (IIF), a 19% increase in net investment
today. The credit quality of our IIF continues to be strong, with
income, and the inclusion of a full year of title insurance
a weighted average original FICO   of 746, a weighted average
revenue. Our book value per share grew by 11%, ending the
original LTV of 93% and limited layered risks. Our MI portfolio
year with GAAP equity of $5.6 billion.
default rate ended 2024 at 2.27% compared to 1.80% at the
Besides strong financial performance, we achieved several
milestone objectives in 2024. In January, S&P Global Ratings
upgraded the financial strength ratings of both Essent
Guaranty and Essent Re from BBB+ to A-, a testament to
Essent   s high credit quality portfolio, strong balance sheet and
consistent profitability. In July, we completed our inaugural
senior notes offering of $500 million through the investment-
end of 2023, reflecting the aging of our IIF and normalization of
credit performance. Defaults identified as relating to Hurricanes
Helene and Milton increased our year-end 2024 MI portfolio
default rate by approximately 0.25%. As a reminder, defaults
related to hurricanes have historically had a high cure rate, while
MI policies typically exclude claims if physical damage due to
natural disaster is the principal cause of borrower default.
grade corporate debt markets, using part of the proceeds from
From the perspective of interest rates, as a portfolio business,
that transaction to retire $425 million of term loan borrowings.
MI is less dependent on transaction activities than other
Concurrently, we upsized our revolving credit facility to $500
sectors within the housing ecosystem. Despite a challenging
million and extended its maturity to 2029. These transactions
origination environment in 2024, we wrote $46 billion of new
have further optimized Essent   s capital structure and
insurance written (NIW), ending the year with $244 billion of
enhanced our financial flexibility.
IIF, up 2% from a year ago. Our in-force book has a weighted
Heading into 2025, although mortgage origination activity
remains significantly below historical levels, we anticipate
that homebuying demand is merely being postponed given
the challenges of rates and affordability. Our long-term
outlook for housing remains constructive, as continued
average note rate of 4.9%, and nearly 60% of the book has
a note rate of 5.5% or lower. Ending the year with a twelvemonth persistency of 86%, we expect persistency to remain
elevated in the current rate environment, which helps support
the duration of earned premiums.
undersupply and favorable demographic trends should
High interest rates continued to be a tailwind for investment
provide foundational support to home prices. While there
income. We generated net investment income of $222 million
is always uncertainty in the economic environment, given
in 2024, up 19% from 2023. The size of our investment
the strength of our balance sheet and our    buy, manage
portfolio continued to grow, and we ended the year with total
and distribute    operating model, we believe Essent is well
investments and cash of $6.3 billion compared to $5.7 billion
positioned for a range of economic scenarios.
a year ago.

Capital & Equity ($ millions)
9.8:1
Serving the U.S. Housing
$5,603.7
9.7:1
Finance System
We take great pride in serving the
$3,594.4
$3,584.6
$3,453.6
$5,226.2
$5,102.6
$3,376.1
$3,309.5
9.9:1
$5,641.0
10.0:1
$3,530.5
10.2:1
$5,379.8
10.3:1
$4,808.0
$3,243.1
10.5:1
$4,733.4
$3,207.1
$4,648.9
10.3:1
housing market by providing private
MI, an affordable solution to one of the
greatest hurdles for homeownership,
accumulating a 20% down payment.
1Q 23
2Q 23
3Q 23
4Q 23
Consolidated GAAP Equity
1Q 24
2Q 24
Combined Statutory Capital(1)
3Q 24
4Q 24
Combined Risk to Capital Ratio(1)
(1) Prior to December 31, 2024, the statutory capital and risk-to-capital ratio represent combined metrics for the U.S.
insurance subsidiaries Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. Essent Guaranty of PA, Inc. provided
reinsurance to Essent Guaranty, Inc. on certain policies originated prior to April 1, 2019. Effective December 31, 2024,
Essent Guaranty of PA commuted its outstanding risk in force back to Essent Guaranty and surrendered its insurance
license. The statutory capital and risk-to-capital ratio at December 31, 2024 are for Essent Guaranty only.
In 2024, Essent Guaranty enabled
approximately 171,000 borrowers to
purchase a home or refinance their
mortgage. Over 60% of low-down
payment mortgages insured by Essent
were to first-time homebuyers, allowing
them to achieve their    American Dream.   
Insurance In Force and New Insurance Written ($ billions)
$243.6
$243.0
$240.7
$238.5
$238.7
$235.6
$231.5
$239.1
We continue to leverage EssentEDGE  ,
our proprietary credit engine and an
effective risk management tool, to
deliver our best rates to borrowers and
optimize our unit economics and risk
$13.5
$12.5
$8.8
$8.3
$12.5
$12.5
1Q 23
2Q 23
3Q 23
4Q 23
1Q 24
2Q 24
3Q 24
New Insurance Written
$12.2
$12.9
adjusted returns.
Essent Re had another solid year
4Q 24
Insurance in Force
of performance in 2024. In addition
to reinsuring our U.S. MI business
through a 35% affiliate quota share
agreement, Essent Re participates in
Net Premiums Earned and Net Income ($ millions)
15.0%
14.7%
14.9%
14.2%
14.1%
risk share transactions with Fannie
Mae and Freddie Mac (the GSEs) and
15.4%
12.8%
other third parties, while providing
11.9%
fee-based agency services to reinsurer
earned over $450 million of net income
from its third-party business and has
$167.9
$176.2
$244.5
$248.9
$203.6
$251.9
$181.7
$245.6
$175.4
$178.0
$245.6
$246.8
$172.2
$213.2
$170.8
$211.3
clients. Since 2014, Essent Re has
contributed approximately $800 million
to Essent   s book value.
2024 was the first full year of our title
insurance operation since the 2023
1Q 23
2Q 23
Net Premiums Earned
3Q 23
4Q 23
Net Income
1Q 24
2Q 24
3Q 24
4Q 24
Return on Average Equity (Annualized)
acquisition. Essent Title incurred a
modest pre-tax loss in a challenging
operating environment with elevated
Additional Financial Highlights For Full Year 2024
    Net premiums earned were $990.9 million, compared to $916.9 million for 2023
mortgage rates and limited origination
volume. While we continue to maintain
    An expense ratio of 27.1% , compared to 24.5% for 2023
a long-term view for the title business,
    Percentage of U.S. mortgage insurance loans in default were 2.27%, compared to
1.80% at the end of 2023
given it is levered to rates, we do not
expect it to have a material impact on
    A combined ratio of 35.2%, compared to 27.9% for 2023
earnings in the near term.
(1)
(1) Expense ratio is calculated by dividing the sum of other underwriting and operating expenses by the sum of net
premiums earned and settlement services revenue.

   The strength of our balance sheet and
operating model allows Essent to fulfill
our mission to support affordable and
sustainable homeownership.   
Being a Responsible Corporate Citizen
The strength of our balance sheet and operating model
allows Essent to fulfill our mission to support affordable and
sustainable homeownership. As we contemplate the future
landscape for the U.S. housing ecosystem, we continue to
believe that Essent and the rest of the MI industry can play a
greater role in leveraging private capital to support a robust
A Measured Approach to Capital Management
As a steward for your capital, we are cognizant of the
optionality around the capital levers of maintaining a strong
housing finance system while mitigating taxpayer risk.
We continue to publish annual editions of our Sustainability
Report and explore ways to enhance our overall environmental,
balance sheet, growing our core business, investing in our
social, and governance (ESG) initiatives.
future, rewarding our shareholders and delivering strong
Our dedication to ESG begins with supporting our communities.
operating returns.
To ensure that we always operate from a position of strength,
we maintain a conservative balance sheet, with the lowest
debt-to-capital ratio in the industry at 8% and $1.5 billion
of total liquidity at the holding companies at the end of
2024, including $1 billion of net cash and investments plus
We, along with our employees, actively sponsor national and
local organizations that focus on children, education, health,
and housing. This includes multi-year commitments to several
industry foundations, underserved education facilities and
scholarship programs. We believe that responsible corporate
stewardship is essential to our long-term success, and doing
$500 million of undrawn revolving capacity. We hedge our
the right thing will always remain at the heart of our mission.
portfolio with programmatic reinsurance including $1.6 billion
Managing Our Business for the Long-Term
of insurance-linked notes (ILN) and excess-of-loss (XOL)
protection, and ceding $8.6 billion of risk-in-force (RIF) to
quota share (QS) reinsurance.
While we have a    retain and reinvest    mindset, we look to
strike a balance between retaining sufficient excess capital to
preserve optionality for strategic investments and returning
capital to enhance shareholder returns and operating ROE.
Our management team and Board of Directors remain
committed to writing high quality business with strong
unit economics, prudently growing the Essent franchise,
efficiently managing our capital and driving shareholder
returns. We continue to believe that the long-term success
of our business is best measured by growth in book value
per share. Since going public in 2013, we have achieved a
In 2024, we paid $118 million to shareholders as dividends
compound annual growth rate of over 18%.
and repurchased 1.9 million ESNT shares for $103 million.
Thank you for your confidence in us and for investing
Since 2021, we have returned approximately $800 million
of capital to our shareholders in the form of dividends and
in Essent.
share repurchases.
Looking forward, the strength of our operating model and the
stability of Essent   s cash flow, combined with a slowdown
in the growth of the MI business given the rate environment,
provides us an opportunity to contemplate greater capital
efficiency through the returning of capital to shareholders.
Our Board approved an 11% increase in Essent   s quarterly
dividend to $0.31 per share for March 2025, marking the
sixth consecutive year that we have increased our dividend to
shareholders. Further, in February 2025, our Board approved
a new $500 million share repurchase authorization that runs
through year-end 2026.
Mark A. Casale
Chairman & CEO
March 2025

Strength In Numbers.
STRONG BALANCE SHEET
EXCEPT WHERE NOTED, DATA AND RATINGS ARE AS OF DECEMBER 31, 2024
FINANCIAL STRENGTH1
Essent Guaranty, Inc.
Essent Guaranty, Inc. & Essent Reinsurance Ltd.
MOODY   S:
AM BEST:
A (Excellent) A-
A3
HIGH QUALITY MORTGAGE
INSURANCE PORTFOLIO
$243.6 BILLION
87.2
8.1%
4.7
<680
BY FICO
3
9%
0.
BY LTV
    3.1 Million
homebuyers Essent MI
has helped become
successful homeowners
Essent Guaranty, Inc.
RISK-TO-CAPITAL
9.8:1
ROBUST REINSURANCE PROTECTION
Access to
Excess of Loss
Reinsurance of
$1.6B
REINSURANCE
PROTECTION ON
97%
OF INSURED
PORTFOLIO
PMIERs Credit from
Quota Share
Reinsurance Treaties of
$607M
680-699
700+
HIGH QUALITY PORTFOLIO OF INVESTMENTS
AVAILABLE FOR SALE
Investment Grade
Securities2
16.9%
52
S&P:
Credit Rating of
Aaa to Aa32
U.S. Government &
Agency Securities or
Money Market Funds
   90.00%
90.01%-95.00%
   95.01%
99%
61%
40%
.2 %
STRONG CAPITAL & LIQUIDITY
$5.6 BILLION
$6.3 BILLION
$1.6 BILLION
$1.1 BILLION
$500 MILLION
8% DEBT-TO-CAPITAL
RATIO
Of GAAP Equity
Cash and Investments at the
Holding Companies
1
Consolidated Cash & Investments
Undrawn Credit Facility Capacity
(an Additional Source of Liquidity)
For more information, visit "Understand Ratings" in the Ratings section at moodys.com,
the "Rating Methodologies" section at ambest.com and "Understanding Credit Ratings"
at spratings.com.
2
Excess U.S. PMIERs Capital
Based on ratings issued by Moody's, if available. S&P or Fitch rating utilized if Moody's not available.
Percentages exclude money market funds.



 3/25/2025 Letter Continued (Full PDF)