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Growth in Private Mortgage Insurers Not Enough: American International Group Inc (AIG), Genworth Financial Inc (GNW), Radian Group Inc (RDN)

MGIC Investment Corporation

For the latest quarter of 2012 MGIC Investment posted operating EPS of $2.34 vs. the reported EPS of $1.91. During the quarter, the risk-to-capital levels declined further to 44.7x. Operating revenues totaled $286 million, 5% below the linked quarter’s revenues. Net premiums earned during the quarter also came down 2% from a quarter ago. Net premiums as a percentage of average insurance in force remained flat at 64 bps quarter over quarter.

American International Group

American International Group Inc (NYSE:AIG) reported a net loss of $4 billion or $2.68 per share for the fourth quarter of 2012. The reported operating earnings came in at $290 million or $0.2 per share. The results included $2 billion of pretax losses from Sandy. The bottom line included a $4.4 billion net loss on the same from discontinued operations. The underlying business trends at American International Group Inc (NYSE:AIG) remained strong. Strong operating earnings in the Life Insurance business, better than expected underwriting margins in the Property & Casualty business and higher investment income supported the operating results.

Radian Group

Higher than expected US MI segment losses drove an earnings miss at Radian Group Inc (NYSE:RDN). The group reported a fourth quarter loss per share of $1.24. The risk-to-capital ratio for the group decreased 0.4 times during the quarter to 20.8x. At the quarter’s end, Radian held $336 million in cash. The company generated operating revenues of $194 million, while the net premiums earned remained flat compared to the previous quarter.


Based on the above analysis, I believe you can expect the private mortgage industry to deliver NIW growth despite the decline in the overall mortgage market volumes.

The article Growth in Private Mortgage Insurers Not Enough originally appeared on and is written by Adnan Khan.

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