Enact Holdings secures $225-$260 million in reinsurance for 2025-2026, enhancing credit risk management and financial stability.
Quiver AI Summary
Enact Holdings, Inc., a prominent provider of private mortgage insurance, announced that its main entity, Enact Mortgage Insurance Corporation, has obtained approximately $225 million and $260 million in additional excess of loss reinsurance coverage for the 2025 and 2026 book years, respectively. Effective January 1, 2025, and January 1, 2026, these transactions aim to manage credit risk as the company continues its commitment to support homeownership through its credit risk transfer strategy. The reinsurance is provided by reputable companies rated "A-" or higher by major rating agencies. CEO Rohit Gupta emphasized the company's focus on effectively managing credit risk and enhancing financial stability while also highlighting the unpredictability of future results due to various economic factors. Enact, based in Raleigh, North Carolina, has a longstanding commitment to helping individuals achieve homeownership through robust partnerships with lenders.
Potential Positives
- Enact Holdings, Inc. has successfully secured approximately $225 million and $260 million in additional excess of loss reinsurance coverage, strengthening its financial position for the 2025 and 2026 book years.
- The reinsurance coverage is provided by a panel of highly rated reinsurers, which enhances the company's credit risk management strategy.
- This transaction demonstrates Enact's commitment to proactively managing credit risk and supports its ongoing credit risk transfer strategy.
- The focus on helping people achieve homeownership aligns with Enact's mission and could bolster its reputation in the mortgage insurance market.
Potential Negatives
- The announcement of securing additional reinsurance coverage may indicate heightened concerns about credit risk, suggesting that the company is facing challenges in its primary business operations.
- The reliance on a panel of reinsurers, while rated favorably, may reflect potential vulnerabilities in the company's risk management strategy, raising questions about its direct financial stability.
- The extensive cautionary language about forward-looking statements implies significant uncertainties ahead, potentially undermining investor confidence in the company's future performance.
FAQ
What is the recent announcement by Enact Holdings, Inc.?
Enact announced it secured approximately $225 million and $260 million of excess of loss reinsurance coverage for its 2025 and 2026 insurance books.
How does Enact Holdings manage credit risk?
Enact proactively manages credit risk through its credit risk transfer strategy, which includes obtaining reinsurance coverage.
What is excess of loss (XOL) reinsurance coverage?
XOL reinsurance coverage protects insurers by covering losses that exceed a certain amount, helping to manage financial risk.
What ratings do the reinsurers hold for Enact's new coverage?
The reinsurers for Enact's transactions are rated “A-” or better by S&P and A.M. Best, or “A3” or better by Moody’s.
What is Enact's mission regarding homeownership?
Enact is committed to helping more people achieve homeownership by providing private mortgage insurance and partnering with lenders.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$ACT Insider Trading Activity
$ACT insiders have traded $ACT stock on the open market 6 times in the past 6 months. Of those trades, 0 have been purchases and 6 have been sales.
Here’s a breakdown of recent trading of $ACT stock by insiders over the last 6 months:
- HOLDINGS, INC. GENWORTH has made 0 purchases and 6 sales selling 3,442,527 shares for an estimated $118,396,802.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$ACT Hedge Fund Activity
We have seen 108 institutional investors add shares of $ACT stock to their portfolio, and 77 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- MILLENNIUM MANAGEMENT LLC removed 296,231 shares (-46.4%) from their portfolio in Q3 2024, for an estimated $10,762,072
- SG AMERICAS SECURITIES, LLC added 267,912 shares (+4959.5%) to their portfolio in Q4 2024, for an estimated $8,674,990
- SHEAFF BROCK INVESTMENT ADVISORS, LLC added 218,498 shares (+inf%) to their portfolio in Q3 2024, for an estimated $7,938,032
- NUVEEN ASSET MANAGEMENT, LLC added 215,761 shares (+42.8%) to their portfolio in Q3 2024, for an estimated $7,838,597
- EDGESTREAM PARTNERS, L.P. removed 204,007 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $7,411,574
- DIMENSIONAL FUND ADVISORS LP added 198,735 shares (+12.4%) to their portfolio in Q3 2024, for an estimated $7,220,042
- BANK OF AMERICA CORP /DE/ added 170,887 shares (+245.7%) to their portfolio in Q3 2024, for an estimated $6,208,324
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
RALEIGH, N.C., Jan. 27, 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 secured approximately $225 million and $260 million of additional excess of loss (XOL) reinsurance coverage. These credit risk transfer (CRT) transactions cover a portion of expected new insurance written for the 2025 book year (policies written from January 1, 2025 through December 31, 2025) and 2026 book year (policies written from January 1, 2026 through December 31, 2026) respectively, and are effective January 1, 2025 and January 1, 2026. Reinsurance coverage for both transactions are provided by a 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.
“Today’s announcement reflects our on-going commitment to proactively manage credit risk and strengthen our financial position,” said Rohit Gupta, President and CEO of Enact. “Looking ahead, we remain committed to continuing to successfully execute on our CRT strategy while helping people responsibly achieve the dream of homeownership.”
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.