Enact Mortgage Insurance Enters into Quota Share Reinsurance Agreement
Rhea-AI Summary
Enact Holdings (Nasdaq: ACT), a leading private mortgage insurance provider, has announced a significant quota share reinsurance agreement with highly-rated reinsurance providers. Under the agreement, Enact Mortgage Insurance Corporation will cede approximately 34% of expected new insurance written from January 1, 2027, through December 31, 2027.
The reinsurance partners are rated "A-" or better by S&P or A.M. Best, or "A3" or better by Moody's. CEO Rohit Gupta emphasized that this agreement demonstrates the company's commitment to disciplined risk management and efficient capital deployment, supporting their pursuit of high-quality new business and portfolio resilience.
Positive
- Partnership with highly-rated reinsurance providers (A-/A3 or better)
- Strategic risk management through 34% quota share of new insurance written
- Improved portfolio resilience and capital efficiency
Negative
- Reduced potential earnings from ceded insurance premiums
- Exposure to counterparty risk with multiple reinsurance providers
Insights
Enact's new 34% quota share reinsurance agreement strengthens risk management while enhancing capital efficiency for 2027 underwriting.
Enact Mortgage Insurance's new quota share reinsurance agreement represents a strategic capital management decision that will transfer approximately 34% of the risk on new insurance written during 2027 to highly-rated reinsurers. This transaction is significant for several reasons:
The agreement's structure accomplishes dual financial objectives. First, it reduces Enact's risk exposure on new mortgage insurance policies, creating a more resilient portfolio against potential housing market volatility. Second, it optimizes capital efficiency by freeing up resources that would otherwise be reserved against these policies.
The timing is noteworthy - by securing this agreement well in advance of its 2027 effective date, Enact demonstrates forward-looking risk management and locks in reinsurance capacity at current market rates. The quality of reinsurance partners (all rated "A-"/"A3" or better) ensures counterparty stability.
Quota share reinsurance specifically allows Enact to maintain its market presence and continue writing new business while sharing both premiums and potential losses proportionally. This balanced approach contrasts with excess-of-loss structures that only cover catastrophic scenarios.
For investors, this agreement signals management's disciplined approach to capital deployment and underwriting, while maintaining the company's ability to pursue growth opportunities. The transaction ultimately strengthens Enact's financial foundation while preserving its core business model in the mortgage insurance market.
Secures approximately
RALEIGH, N.C., Sept. 25, 2025 (GLOBE NEWSWIRE) -- Enact Holdings, Inc. (Nasdaq: ACT) (Enact), a leading provider of private mortgage insurance through its insurance subsidiaries, today announced that its flagship legal entity, Enact Mortgage Insurance Corporation, has entered into a quota share reinsurance agreement with a broad panel of reinsurers each currently rated “A-” or better by Standard & Poor’s (“S&P”) or A.M. Best Company, Inc., or rated “A3” or better by Moody’s.
Under the agreement, and subject to certain conditions, Enact will cede approximately
“This new quota share agreement underscores our commitment to disciplined risk management and efficient capital deployment,” said Rohit Gupta, President and CEO of Enact. “The transaction supports our pursuit of high-quality new business and improves the resilience of our portfolio. We are grateful for the partnership of our reinsurers and remain focused on advancing our mission and driving long-term value creation.”
Safe Harbor Statement
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, guidance concerning the future return of capital and the quotations of management. These forward-looking statements are distinguished by use of words such as “will,” “may,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “predict,” “project,” “target,” “could,” “should,” or “intend,” the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. Our forward-looking statements contained herein speak only as of the date of this press release. Factors or events that we cannot predict, including risks related to an economic downturn or a recession in the United States and in other countries around the world; changes in political, business, regulatory, and 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; and other factors described in the risk factors contained in our most recent Annual Report on Form 10-K and other filings with the SEC, may cause our actual results to differ from those expressed in forward-looking statements. Although Enact believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, Enact can give no assurance that its expectations will be achieved and it undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.
About Enact Holdings, Inc.
Enact (Nasdaq: ACT), operating principally through its wholly-owned subsidiary Enact Mortgage Insurance Corporation since 1981, is a leading U.S. private mortgage insurance provider committed to helping more people achieve the dream of homeownership. Building on a deep understanding of lenders' businesses and a legacy of financial strength, we partner with lenders to bring best-in class service, leading underwriting expertise, and extensive risk and capital management to the mortgage process, helping to put more people in homes and keep them there. By empowering customers and their borrowers, Enact seeks to positively impact the lives of those in the communities in which it serves in a sustainable way. Enact is headquartered in Raleigh, North Carolina.
This press release was published by a CLEAR® Verified individual.
Investor Contact Daniel Kohl EnactIR@enactmi.com Media Contact Sarah Wentz Sarah.Wentz@enactmi.com
FAQ
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