- Strong 2025 Financial Performance Net income of $690M ($6.90/share) and ROE of 12% for the year, with book value per share rising 13% to $60.31.
- Fourth Quarter Earnings Highlight $155M net income ($1.60/share) and $1.4B in PMIERs excess assets, reflecting robust liquidity and regulatory strength.
- Mortgage Insurance Growth In-force portfolio of $248B (+2% YoY), 86% persistency, and 60% of loans at 6% or lower note rates, underscoring credit quality.
- Lloyd’s Market Expansion $50M initial investment to expand Essent Re into Lloyd’s, leveraging its $1.7B balance sheet and A-rated capital efficiency.
- Disciplined Shareholder Returns 10% share buyback completed in 2025, with plans to continue repurchases, prioritizing capital returns over low-premium risk investments.
Valuation Metrics
With a Price-to-Book Ratio (P/B) of 1.07, the company's stock is trading slightly above its book value. The Dividend Yield is 2.02%, indicating a relatively stable return for investors. The Return on Equity (ROE) is 12.32%, demonstrating the company's ability to generate profits from shareholders' equity.
Business Outlook
Essent Group's management expects insurance in force growth to remain modest, around 1.9% year-over-year, due to affordability and supply issues. However, Mark Casale believes that housing will continue to grow, and when it does, it will be a significant spike. The company's cautious outlook is driven by a focus on optimizing unit economics and taking advantage of its liquidity advantage with Essent Re.
Expansion into Lloyd's Market
The company's decision to enter the Lloyd's market is a measured approach to explore new opportunities, with an initial investment of $50 million. Essent Re has a valuable asset with a balance sheet of $1.7 billion, single-A rating, and a strong team with actuarial backgrounds. This expansion is not a new business but rather an extension of its existing operations.
Revenue Growth Expectations
Analysts estimate next year's revenue growth at 3.2%. With the company's strong financial performance in 2025, Essent Group is well-positioned to create long-term shareholder value. The company's disciplined strategy serves the best interest of its stakeholders, and its return of capital to shareholders is a strategic decision.