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MGIC Investment (MTG) Q1 Earnings Top on Higher Persistency
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MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2023 operating net income per share of 54 cents, which beat the Zacks Consensus Estimate by 5.9% and our estimate of operating net income per share of 50 cents. However, the bottom line declined 10% year over year.
MGIC Investment recorded total operating revenues of $291.7 million, which decreased 1.5% year over year on lower premiums earned and other revenues. The top line missed the consensus mark by 2.2% and our estimate of $298.7 million.
The better-than-expected results of the insurer witnessed higher insurance in force and net investment income, partially offset by higher expenses and lower premiums.
MGIC Investment Corporation Price, Consensus and EPS Surprise
Insurance in force increased 5.4% from the prior-year quarter to $292.4 billion. The figure missed the Zacks Consensus Estimate by 3.4% and our estimate of $302.6 billion.
The insurer witnessed an 18.7% decrease in primary delinquency to 24,757 loans.
Net premiums written decreased 5.1% year over year to $230.2 million. The figure was lower than our estimate of $244.1 million.
Net investment income increased 28.6% year over year to $49.2 million. The figure beat the consensus mark by 26.8% and our estimate of $38.8 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 82% as of Mar 31, 2023, up from 66.9% in the year-ago quarter.
New insurance written was $8.2 billion, down 58.2% year over year due to a decline in origination markets. The figure was lower than our estimate of $27 billion.
Net underwriting and other expenses totaled $72.5 million, up 26.1% year over year. The increase was primarily due to higher pension and performance-based employee compensation expenses.
For the quarter under review, the loss ratio was 2.7% compared with (7.6%) for the first quarter of 2022.
Financial Update
Book value per share, a measure of net worth, increased 4.7% from 2022-end to $16.57 as of Mar 31, 2023.
Shareholder equity was $4.8 billion as of Mar 31, 2023, up from $4.6 billion at 2022-end.
MGIC's PMIERs Available Assets totaled $5.9 billion, or $2.4 billion above its Minimum Required Assets as of Mar 31, 2023.
Assets were $6.4 billion as of Mar 31, 2023, up from $6.2 billion at 2022-end. Debt was $663 million as of Mar 31, 2023, unchanged from the 2022-end level.
Capital Deployment
MGIC Investment paid 10 cents in dividends per common share to shareholders during first-quarter 2023.
The company bought back shares worth $77.9 million in the first quarter and another $23.8 million worth in April 2023.
Zacks Rank
MGIC Investment currently carries a Zacks Rank #4 (Sell).
Assurant, Inc. (AIZ - Free Report) reported first-quarter 2023 net operating income of $3.49 per share, which beat the Zacks Consensus Estimate by 55% and our estimate of $2.62. The bottom line decreased 12.3% from the year-ago quarter.
The decrease was primarily due to lower segment earnings, a higher effective tax rate and an increase in depreciation expense. It was partially offset by share repurchases from previous quarters.
CNO Financial Group, Inc. (CNO - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 51 cents, which missed the Zacks Consensus Estimate of 65 cents and our estimate of 54 cents. Also, the bottom line dropped 6% year over year.
Total revenues jumped 19.3% year over year to $1,006 million in the quarter under review. The top line beat the consensus mark by 9.5% and our estimate of $911.8 million.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.68 per share, which met the Zacks Consensus Estimate. The bottom line inched up 1% year over year.
Operating revenues of HIG amounted to $3,915 million, which advanced 8.6% year over year in the quarter under review. However, the top line missed the consensus mark by 1.1% but surpassed our estimate of $3,908.7 million.
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MGIC Investment (MTG) Q1 Earnings Top on Higher Persistency
MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2023 operating net income per share of 54 cents, which beat the Zacks Consensus Estimate by 5.9% and our estimate of operating net income per share of 50 cents. However, the bottom line declined 10% year over year.
MGIC Investment recorded total operating revenues of $291.7 million, which decreased 1.5% year over year on lower premiums earned and other revenues. The top line missed the consensus mark by 2.2% and our estimate of $298.7 million.
The better-than-expected results of the insurer witnessed higher insurance in force and net investment income, partially offset by higher expenses and lower premiums.
MGIC Investment Corporation Price, Consensus and EPS Surprise
MGIC Investment Corporation price-consensus-eps-surprise-chart | MGIC Investment Corporation Quote
Operational Update
Insurance in force increased 5.4% from the prior-year quarter to $292.4 billion. The figure missed the Zacks Consensus Estimate by 3.4% and our estimate of $302.6 billion.
The insurer witnessed an 18.7% decrease in primary delinquency to 24,757 loans.
Net premiums written decreased 5.1% year over year to $230.2 million. The figure was lower than our estimate of $244.1 million.
Net investment income increased 28.6% year over year to $49.2 million. The figure beat the consensus mark by 26.8% and our estimate of $38.8 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 82% as of Mar 31, 2023, up from 66.9% in the year-ago quarter.
New insurance written was $8.2 billion, down 58.2% year over year due to a decline in origination markets. The figure was lower than our estimate of $27 billion.
Net underwriting and other expenses totaled $72.5 million, up 26.1% year over year. The increase was primarily due to higher pension and performance-based employee compensation expenses.
For the quarter under review, the loss ratio was 2.7% compared with (7.6%) for the first quarter of 2022.
Financial Update
Book value per share, a measure of net worth, increased 4.7% from 2022-end to $16.57 as of Mar 31, 2023.
Shareholder equity was $4.8 billion as of Mar 31, 2023, up from $4.6 billion at 2022-end.
MGIC's PMIERs Available Assets totaled $5.9 billion, or $2.4 billion above its Minimum Required Assets as of Mar 31, 2023.
Assets were $6.4 billion as of Mar 31, 2023, up from $6.2 billion at 2022-end. Debt was $663 million as of Mar 31, 2023, unchanged from the 2022-end level.
Capital Deployment
MGIC Investment paid 10 cents in dividends per common share to shareholders during first-quarter 2023.
The company bought back shares worth $77.9 million in the first quarter and another $23.8 million worth in April 2023.
Zacks Rank
MGIC Investment currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multi-line Insurers
Assurant, Inc. (AIZ - Free Report) reported first-quarter 2023 net operating income of $3.49 per share, which beat the Zacks Consensus Estimate by 55% and our estimate of $2.62. The bottom line decreased 12.3% from the year-ago quarter.
The decrease was primarily due to lower segment earnings, a higher effective tax rate and an increase in depreciation expense. It was partially offset by share repurchases from previous quarters.
CNO Financial Group, Inc. (CNO - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 51 cents, which missed the Zacks Consensus Estimate of 65 cents and our estimate of 54 cents. Also, the bottom line dropped 6% year over year.
Total revenues jumped 19.3% year over year to $1,006 million in the quarter under review. The top line beat the consensus mark by 9.5% and our estimate of $911.8 million.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.68 per share, which met the Zacks Consensus Estimate. The bottom line inched up 1% year over year.
Operating revenues of HIG amounted to $3,915 million, which advanced 8.6% year over year in the quarter under review. However, the top line missed the consensus mark by 1.1% but surpassed our estimate of $3,908.7 million.