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Radian Group (RDN) Q2 Earnings Top Estimates, Premiums Rise Y/Y
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Radian Group Inc. (RDN - Free Report) reported second-quarter 2024 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 13.8%. Moreover, the bottom line increased 8.8% year over year.
Operating revenues increased 12.3% year over year to $325.6 million due to higher net premiums earned, services revenues and net investment income.
The results reflected solid performance across both Mortgage and All Other segments, higher primary mortgage insurance in force, improved investment income and premiums earned, partially offset by higher expenses.
Radian Group Inc. Price, Consensus and EPS Surprise
Net premiums earned were $237.7 million, up 11.4% year over year. Net investment income increased 16.4% year over year to $73.7 million.
MI New Insurance Written decreased 18% year over year to $13.9 billion. Primary mortgage insurance in force increased 2.2% year over year to $272.8 billion.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 84% as of Jun 30, 2024, up 100 basis points (bps) year over year.
Primary delinquent loans were 20,276 as of Jun 30, 2024, up 2% year over year.
Total expenses increased 10.1% year over year to $133 million. The expense ratio was 28.5, which improved 110 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year increase of 9.8% in total revenues to $285.9 million. Net premiums earned by the segment were $235 million, up 11.4% year over year. Claims paid were $6 million, which increased 100% year over year. The loss ratio was negative 0.8 compared with negative 10.3 in the year-ago quarter.
The All Other segment reported a year-over-year increase of 33.8% in total revenues to $39.7 million. Net premiums earned by the segment were $2.9 million, up 8% year over year. Net investment income grew 54.8% year over year to $23.6 million. Adjusted pretax operating loss was $6 million, narrower than the year-ago loss of $13.7 million.
Financial Update
As of Jun 30, 2024, Radian Group had a solid cash balance of $13.8 billion.
The debt-to-capital ratio deteriorated 80 bps to 25.2 from the 2023-end level.
Book value per share, a measure of net worth, climbed 11.9% year over year to $29.66 as of Jun 30, 2024.
In the second quarter, adjusted net operating return on equity was 13.6%, which contracted 50 bps year over year.
The risk-to-capital ratio of Radian Guaranty as of the second-quarter end was 10.3:1 compared with 10.4:1 reported at the end of 2023. As of Jun 30, 2024, Radian Guaranty’s Available Assets under PMIERs totaled around $6 billion, which resulted in PMIERs excess Available Assets of $2.2 billion.
Share Repurchase and Dividend Update
In May 2024, the board authorized an increase to its existing share repurchase program from $300 million to $900 million and extended the term to Jun 30, 2026.
In the second quarter, Radian repurchased 1.6 million shares worth $50 million, including commissions. As of Jun 30, 2024, purchase authority of up to $667 million remained available under the existing program.
Radian Group paid a dividend totaling $37 million on Jun 20, 2024.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. The metric was driven by an 8.9% and 2.2% year-over-year rise in P&C and Group Benefits’ earned premiums, respectively. Pre-tax net investment income of $602 million grew 11.5% year over year but missed the consensus mark by 1%. Total benefits, losses and expenses increased 3.7% year over year to $5.6 billion in the quarter under review. Pretax income of $912 million increased 35.7% year over year in the second quarter.
CNO Financial Group, Inc. (CNO - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of $1.05, which beat the Zacks Consensus Estimate by 45.8%. Moreover, the bottom line rose 94.4% year over year. Total revenues increased 4.2% year over year to $1.07 billion in the second quarter. The top line beat the consensus mark by 16.4%. Total insurance policy income of $641.5 million improved 2.1% year over year and beat the Zacks Consensus Estimate by 1.2%.
CNO’s net investment income increased 2.4% year over year to $409.1 million in the second quarter. General account assets grew 8.3% year over year to $351.7 million and beat the consensus mark by 14.1%. However, the policyholder and other special-purpose portfolios declined 37.3% year over year to $57.4 million. New annualized premiums for health and life products improved 4.3% year over year to $102.9 million. Annuity, Health and Life products accounted for 27.7%, 49.4% and 22.9%, respectively, of CNO’s insurance margin. Total benefits and expenses were $915.6 million, which declined 1.2% year over year.
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year. MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year. The top line beat the consensus mark by 0.6%.
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion. The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans. Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million. Net investment income increased 17.5% year over year to $61.5 million. Our estimate was $58 million.
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Radian Group (RDN) Q2 Earnings Top Estimates, Premiums Rise Y/Y
Radian Group Inc. (RDN - Free Report) reported second-quarter 2024 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 13.8%. Moreover, the bottom line increased 8.8% year over year.
Operating revenues increased 12.3% year over year to $325.6 million due to higher net premiums earned, services revenues and net investment income.
The results reflected solid performance across both Mortgage and All Other segments, higher primary mortgage insurance in force, improved investment income and premiums earned, partially offset by higher expenses.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. price-consensus-eps-surprise-chart | Radian Group Inc. Quote
Quarter in Details
Net premiums earned were $237.7 million, up 11.4% year over year. Net investment income increased 16.4% year over year to $73.7 million.
MI New Insurance Written decreased 18% year over year to $13.9 billion.
Primary mortgage insurance in force increased 2.2% year over year to $272.8 billion.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 84% as of Jun 30, 2024, up 100 basis points (bps) year over year.
Primary delinquent loans were 20,276 as of Jun 30, 2024, up 2% year over year.
Total expenses increased 10.1% year over year to $133 million. The expense ratio was 28.5, which improved 110 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year increase of 9.8% in total revenues to $285.9 million. Net premiums earned by the segment were $235 million, up 11.4% year over year. Claims paid were $6 million, which increased 100% year over year. The loss ratio was negative 0.8 compared with negative 10.3 in the year-ago quarter.
The All Other segment reported a year-over-year increase of 33.8% in total revenues to $39.7 million. Net premiums earned by the segment were $2.9 million, up 8% year over year. Net investment income grew 54.8% year over year to $23.6 million. Adjusted pretax operating loss was $6 million, narrower than the year-ago loss of $13.7 million.
Financial Update
As of Jun 30, 2024, Radian Group had a solid cash balance of $13.8 billion.
The debt-to-capital ratio deteriorated 80 bps to 25.2 from the 2023-end level.
Book value per share, a measure of net worth, climbed 11.9% year over year to $29.66 as of Jun 30, 2024.
In the second quarter, adjusted net operating return on equity was 13.6%, which contracted 50 bps year over year.
The risk-to-capital ratio of Radian Guaranty as of the second-quarter end was 10.3:1 compared with 10.4:1 reported at the end of 2023. As of Jun 30, 2024, Radian Guaranty’s Available Assets under PMIERs totaled around $6 billion, which resulted in PMIERs excess Available Assets of $2.2 billion.
Share Repurchase and Dividend Update
In May 2024, the board authorized an increase to its existing share repurchase program from $300 million to $900 million and extended the term to Jun 30, 2026.
In the second quarter, Radian repurchased 1.6 million shares worth $50 million, including commissions. As of Jun 30, 2024, purchase authority of up to $667 million remained available under the existing program.
Radian Group paid a dividend totaling $37 million on Jun 20, 2024.
Zacks Rank
Radian currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Multi-Line Insurers
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. The metric was driven by an 8.9% and 2.2% year-over-year rise in P&C and Group Benefits’ earned premiums, respectively. Pre-tax net investment income of $602 million grew 11.5% year over year but missed the consensus mark by 1%. Total benefits, losses and expenses increased 3.7% year over year to $5.6 billion in the quarter under review. Pretax income of $912 million increased 35.7% year over year in the second quarter.
CNO Financial Group, Inc. (CNO - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of $1.05, which beat the Zacks Consensus Estimate by 45.8%. Moreover, the bottom line rose 94.4% year over year. Total revenues increased 4.2% year over year to $1.07 billion in the second quarter. The top line beat the consensus mark by 16.4%. Total insurance policy income of $641.5 million improved 2.1% year over year and beat the Zacks Consensus Estimate by 1.2%.
CNO’s net investment income increased 2.4% year over year to $409.1 million in the second quarter. General account assets grew 8.3% year over year to $351.7 million and beat the consensus mark by 14.1%. However, the policyholder and other special-purpose portfolios declined 37.3% year over year to $57.4 million. New annualized premiums for health and life products improved 4.3% year over year to $102.9 million. Annuity, Health and Life products accounted for 27.7%, 49.4% and 22.9%, respectively, of CNO’s insurance margin. Total benefits and expenses were $915.6 million, which declined 1.2% year over year.
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year. MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year. The top line beat the consensus mark by 0.6%.
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion. The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans. Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million. Net investment income increased 17.5% year over year to $61.5 million. Our estimate was $58 million.