Earnings call transcript: Enact Holdings Q2 2025 shows strong income

Enact Holdings Inc. reported its financial results for the second quarter of 2025, highlighting a robust performance with an adjusted operating income of $174 million and adjusted earnings per diluted share of $1.15. The $5.36 billion market cap company maintains an impressive 74.75% gross profit margin and a healthy 13% return on equity. The stock saw a modest increase of 1.74% in regular trading, closing at $35.72, but experienced a slight dip of 0.5% in aftermarket trading. Enact’s investment income grew significantly, while its disciplined expense management contributed to maintaining a strong financial position. According to InvestingPro analysis, the company currently appears slightly overvalued, though it maintains a "GOOD" overall financial health score.

Key Takeaways

• Adjusted earnings per share reached $1.15.
• Investment income increased by 10% year-over-year.
• Capital returns for 2025 rose to approximately $400 million.
• The PMIERs sufficiency ratio stood at 165%.

Company Performance

Enact Holdings demonstrated strong performance in Q2 2025, with notable growth in investment income and a stable level of net premiums earned. The company’s focus on disciplined expense management and strategic capital allocation has positioned it well in a challenging macroeconomic environment. Despite high mortgage rates and limited housing supply, Enact has maintained its competitive edge through technological investments and credit risk management.

Financial Highlights

• Adjusted operating income: $174 million
• Earnings per share: $1.15
• Total net premiums earned: $245 million (flat sequentially)
• Investment income: $66 million (up 10% year-over-year)
• Capital returns: approximately $400 million for 2025

Market Reaction

Following the earnings announcement, Enact Holdings’ stock price increased by 1.74% during regular trading hours, closing at $35.72. However, in aftermarket trading, the stock slightly declined by 0.5% to $35.54. Trading at a P/E ratio of 8.23 with a dividend yield of 2.31%, the stock’s movement reflects investor confidence in the company’s strong financial performance, tempered by broader market conditions affecting the mortgage insurance sector. InvestingPro subscribers can access additional insights through comprehensive Pro Research Reports, which provide deep-dive analysis of 1,400+ US stocks, including Enact Holdings.

Outlook & Guidance

Looking ahead, Enact Holdings expects operating expenses for 2025 to range between $220 million and $225 million. The company remains focused on capital allocation priorities and is confident in its ability to navigate the complex macroeconomic landscape. Enact’s forward guidance includes EPS forecasts for the upcoming quarters, with expectations of continued strong performance.

Executive Commentary

CEO Rohit Gupta emphasized the company’s mission to support homeownership responsibly, stating, "We remain grounded in our mission to help people responsibly achieve the dream of homeownership." CFO Dean Mitchell highlighted the company’s robust credit performance, noting, "Credit performance remains very strong through the second quarter."

Risks and Challenges

• High mortgage rates near 7% could impact consumer affordability.
• Housing supply remains below the equilibrium level, affecting market dynamics.
• Regional market variations, such as inventory oversupply in areas like Cape Coral, may pose challenges.
• The broader economic environment and potential changes in regulatory policies could impact future performance.

Q&A

During the earnings call, analysts inquired about regional home price variations and the resilience of borrower portfolios. Enact’s management confirmed strong consumer credit fundamentals and maintained a 9% claim rate, underscoring the company’s robust risk management practices. InvestingPro has identified several key trends for Enact, including management’s aggressive share buyback program and consistent profitability over the last twelve months. Subscribers can access 5+ additional ProTips and extensive financial metrics to make more informed investment decisions.

Full transcript - Enact Holdings Inc (ACT) Q2 2025:

Conference Operator: Hello, and welcome to Enact’s Second Quarter Earnings Conference Call. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker, Daniel Cole, Vice President of Investor Relations. You may begin.

Daniel Cole, Vice President of Investor Relations, Enact: Thank you, and good morning. Welcome to our second quarter earnings call. Joining me today are Rohit Gupta, President and Chief Executive Officer and Dean Mitchell, Chief Financial Officer and Treasurer. Rohit will provide an overview of our business performance and progress against our strategy. Dean will then discuss the details of our quarterly results before turning the call back to Rohit for closing remarks.

We will then take your questions. The earnings materials we issued after market close yesterday contain our financial results for the quarter along with a comprehensive set of financial and operational metrics. These are available on the Investor Relations section of our website. Today’s call is being recorded and will include the use of forward looking statements. These statements are based on current assumptions, estimates, expectations, and projections as of today’s date.

Additionally, they are subject to risks and uncertainties, which may cause actual results to be materially different and we undertake no obligation to update or revise such statements as a result of new information. For a discussion of these risks and uncertainties, please review the cautionary language regarding forward looking statements in today’s press release as well as in our filings with the SEC, which will be available on our website. Please keep in mind that earnings materials and management’s prepared remarks today include certain non GAAP measures. Reconciliations of these measures to the most relevant GAAP metrics can be found in the press release, our earnings presentation, and our upcoming SEC filing on our website. With that, I’ll turn the call over to Rohit.

Rohit Gupta, President and Chief Executive Officer, Enact: Thank you, Daniel. Good morning, everyone. EnACT closed out the first half of the year with another strong quarter. Our results continue to reflect the disciplined execution of our strategy, robust credit performance, and our ongoing commitment to creating long term value for our shareholders. To that end, we are pleased to announce a meaningful increase in our expected capital returns for 2025 to approximately $400,000,000, which we will discuss in more detail later.

For the second quarter, we reported adjusted operating income of $174,000,000 while adjusted earnings per diluted share was $1.0.1 Additionally, adjusted return on equity was over 13%. Insurance in force increased 1% year over year to $270,000,000,000, and we generated robust new insurance written of over $13,000,000,000. We continue to successfully navigate a complex macroeconomic environment. While certain indicators, such as labor market resilience, moderating wage growth, and the overall health of our borrowers remain strong, uncertainties persist. In particular, the lack of near term clarity around trade policy and the potential implementation of reciprocal tariffs has introduced additional volatility to the outlook.

Affordability continues to be challenged. And while home inventories have started to build up in certain geographies, there are more buyers than sellers at the national level. Having said that, our business is supported by strong demographic trends, especially within the historical first time homebuyer segment. Overall, we continue to remain optimistic about the long term health of The US housing market. Against this backdrop, our capital position and credit performance remain key strengths.

At quarter end, we reported PMIERs sufficiency ratio of 165%, providing significant financial flexibility, and our credit portfolio remains in excellent shape. At

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: the

Rohit Gupta, President and Chief Executive Officer, Enact: end of the second quarter, approximately 7% of our insurance in force had mortgage rates at least 50 basis points above June’s average mortgage rate of 6.8%, and the credit quality of our insured portfolio remains strong. The risk weighted average FICO score of the portfolio was 746. The risk weighted average loan to value ratio was 93%, and layered risk was 1.2% of risk in force. Pricing was again constructive in the quarter, and we maintained our commitment to prudent underwriting standards. Our pricing engine, Rate three sixty, allows us to deliver competitive pricing on a risk adjusted basis, and we continue to prudently underwrite and select risk.

We saw favorable delinquency and cure performance during the quarter that followed typical seasonal sequential trends. Total delinquencies were down 1% sequentially, with new delinquencies also decreasing by 5%. Strong embedded equity, combined with our effective loss mitigation efforts, helped drive robust cure performance with a cure rate of 52%. This drove a reserve release of $48,000,000 and our resulting loss ratio for the quarter was 10%. Credit performance remains strong, and we are well reserved for a range of scenarios.

On the expense front, we maintained our disciplined approach to expense management, while investing in technologies and processes that improve customer experience and our business operations. Despite the ongoing inflationary environment, our expenses, excluding restructuring charges, were flat year over year. We continue to advance on all capital allocation priorities to support existing policyholders by maintaining a strong balance sheet, invest in our business to drive organic growth and efficiencies, fund attractive new business opportunities to diversify our platform, and return excess capital to shareholders. As it relates to diversification, Anacri continues to build momentum as we participate in single and multifamily GSE CRT transactions. Anatomy remains capital and expense efficient and is contributing to our long term earnings profile.

As it relates to capital returns, during the second quarter, we returned $116,000,000 to shareholders through share repurchases and dividends. And as I mentioned earlier, we are increasing our expected capital return to approximately $400,000,000 for the year. Before handing the call over to Dean, I wanted to take a moment to recognize our culture and our people. For the third year, EnACT was recognized as one of the best places to work by Triangle Business Journal. We take pride in fostering an environment where our teams can thrive and do their best work in the service of our customers and stakeholders and are very pleased to have received this recognition.

Overall, we are pleased with our performance through the 2025. We are navigating a complex environment from a position of strength supported by robust new insurance written with excellent credit quality, a strong balance sheet, and prudent expense management. Additionally, we are working closely with our lending partners, the GSEs, and the administration to ensure we are well positioned to adapt to any regulatory changes. We were excited to see that MI premiums have become tax deductible again. With the support of a highly engaged team, we are focused on executing our strategy and maximizing value for our shareholders.

With that, I will now hand it over to Dean to walk through our financial results in more detail.

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: Thanks, Rohit. Good morning, everyone. Adjusted operating income was $174,000,000 or $1.15 per diluted share compared to $1.27 per diluted share in the same period last year and $1.1 per diluted share in the 2025. Adjusted operating return on equity was 13.4%. A detailed reconciliation of GAAP net income to adjusted operating income can be found in our earnings release.

Turning to revenue drivers, new insurance written was 13,000,000,000, up 35% sequentially and down 3% year over year. The sequential increase was primarily driven by mortgage origination seasonality from the spring selling season. Persistency was 82 in the second quarter, down two points sequentially and down one point year over year. Our portfolio remains resilient with 7% of our mortgages having rates at least 50 basis points above June’s average of 6.8%. We expect elevated persistency will continue to help offset the potential impact of higher mortgage rates on the origination market.

Given the combination of solid new insurance written and elevated persistency, primary insurance in force was $270,000,000,000 in the second quarter, up $2,000,000,000 or 1% from the 2025 and $4,000,000,000 or approximately 1% year over year. Total net premiums earned were $245,000,000 flat sequentially and up modestly year over year. The year over year increase was primarily driven by premium growth from attractive adjacencies and the growth of our mortgage insurance portfolio, mostly offset by higher ceded premiums. Our base premium rate of 39.8 basis points was down 0.3 basis points sequentially, aligned with our expectation for base premium rate in 2025 to stabilize around 2024 levels. As a reminder, our base premium rate is impacted by several factors and tends to modestly fluctuate from quarter to quarter.

Our net earned premium rate was 35.2 basis points, relatively flat sequentially. Investment income in the second quarter was $66,000,000 up $3,000,000 or 5% sequentially, and up $6,000,000 or 10% year over year. Our new money investment yield continued to exceed 5%, lifting our overall portfolio book yield. As previously stated, while we typically hold investments to maturity, we may selectively pursue income enhancement opportunities. During the quarter, we sold certain assets that will allow us to recoup realized losses through future higher net investment income.

Turning to credit performance, new delinquencies decreased sequentially to 11,600 in the quarter from 12,200 in the 2025, in line with expected seasonal trends. Our new delinquency rate remained consistent with pre pandemic levels and for the quarter at 1.2%, a decrease of 10 basis points compared to the 1.3% in the 2025 and one point one percent in the 2024. The year over year increase was primarily driven by higher new delinquencies from the normal loss development pattern of newer books. We maintained our claim rate on new delinquencies at nine percent. Total delinquencies and the delinquency rate of two point three percent in the second quarter were flat sequentially as cures kept pace with news.

Losses in the 2025 were 25,000,000 and the loss ratio was 10% compared to 31,000,000 and twelve percent respectively in the 2025 and negative 17,000,000 and negative 7% respectively in the 2024. The current quarter’s reserve release was $48,000,000 driven by ongoing favorable cure performance and loss mitigation activities. Turning to operating expenses. Operating expenses for the 2025 were 53,000,000 and the expense ratio was 22% compared to fifty three million and twenty one percent respectively in the 2025 and fifty six million and twenty three percent respectively in the 2024. For 2025 operating expenses, we continue to anticipate a range of $2.20 to $225,000,000, excluding reorganization costs.

We continue to operate from a strong capital and liquidity position reinforced by our robust PMIER sufficiency and the successful execution of our diversified CRT program. PMIERs sufficiency was 165 or 2,000,000,000 above PMIERs requirements at the end of the second quarter. As of 06/30/2025, our third party CRT program provides 1,900,000,000.0 of PMIERs capital credit. Let me now turn to capital allocation. During the quarter, we paid out 31,000,000 or $0.21 per share through our quarterly dividend.

Today, we announced the third quarter dividend of $0.21 per common share payable September 8. In addition, we bought 2,400,000.0 shares for $85,000,000 in the 2025. Through July 25, we’ve repurchased an additional 800,000.0 shares for $30,000,000 As Rohit mentioned earlier, we are increasing our 2025 total capital return guidance to approximately $400,000,000 As in the past, the final amount and form of capital return to shareholders will depend on business performance, market conditions, and regulatory approvals. Overall, we are pleased with our performance in the 2025, and we believe we are well positioned for the second half. We remain focused on prudently managing risk, maintaining a strong balance sheet, and delivering solid returns for our shareholders.

With that, let me turn the call back over to Rohit.

Rohit Gupta, President and Chief Executive Officer, Enact: Thanks, Dean. Looking ahead, we are confident in our ability to navigate complex and evolving macroeconomic environment. Our strong balance sheet, disciplined risk management, and thoughtful approach to capital deployment provide meaningful flexibility as we execute our strategy. We remain grounded in our mission to help people responsibly achieve the dream of homeownership, which continues to guide how we serve our customers, support our communities, and create long term value for all our stakeholders. Operator, we are now ready for q and a.

Conference Operator: Thank you. At this time, we’ll conduct the question and answer session. The first question comes from the line of Doug Harter with UBS. Your line is now open.

Doug Harter, Analyst, UBS: Thanks and good morning. I was hoping you could talk about the seasoning of the recent origination vintages and how you might how you think some of the regional home price weakness might affect the seasoning of those newer vintages.

Rohit Gupta, President and Chief Executive Officer, Enact: Good morning, Doug. This is Rohit. I will have Dean start on the performance of the recent vintages, and then I’ll add color on the regional home price decline.

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: Yeah. So, Doug, good morning. Just lifting up real quick, I’d say overall credit performance remains very strong through the second quarter. Lots of reasons for that. Meaningful embedded HPA across our insured portfolio, certainly one of the reasons, but also we’re operating in a pretty resilient economy.

And, The US consumer remains pretty strong, whether it’s employment, wage growth, balance sheet, and the like. So credit, you know, that backdrop of credit performance, being strong, I think, should color any evaluation of loss performance for the quarter. I think in terms of, geographies, certainly at a national level, very similar to what I said in terms of credit performance. Home, very good performance. Home inventories remain healthy with housing supply.

I think at about four and a half months, that’s below the the six month level that we consider as an equilibrium. I would say there are some markets where inventories have risen and created some softness in a particular market. I think the most notable example given the Wall Street Journal article from a couple weeks ago is Cape Coral, where inventories have risen sharply and supply is outpacing demand. I think in this particular instance, Cape Coral makes up a very small part of our overall portfolio. But maybe thinking about that more broadly, you know, in geographies where supply has grown or is trending higher, we adjust our pricing to reflect the impact of, not just current home prices, but future home prices into our pricing equation.

Our risk based pricing approach applies what we believe is the right price for the right risk for both credit attributes and macroeconomic assumptions, future home prices, again, embedded into our pricing levels, given our assessment of any particular market.

Rohit Gupta, President and Chief Executive Officer, Enact: And Doug, I would just add to Dean’s comment, agree with everything that Dean said, that as you think about consumers and the way they value shelter or homeownership, that continues to be very high. So, we don’t see a high correlation on a slight home price decline in a certain geography suddenly leading to consumers actually defaulting on their home. While there could be some performance differential between a market that has significant home price appreciation versus the market that’s slightly declining, we still continue to see in our borrowers that borrowers are prioritizing mortgage payments over every other payment. So, we still think that given the labor market is strong, given that consumer balance sheets for other borrowers continue to be resilient, that that is going to be indicated in our performance.

Doug Harter, Analyst, UBS: Great. I appreciate that. Thank you.

Daniel Cole, Vice President of Investor Relations, Enact: Thanks, Doug. Thank you.

Conference Operator: Our next question comes from the line of Rick Shane with JPMorgan. Your line is now open.

Rick Shane, Analyst, JPMorgan: Good morning, guys. Thanks for taking my question. Look, Doug, I think covered probably the most important and salient issue for the space at the moment. But would like to talk about the addressable market. We’re now halfway through 2025 and at least versus our expectations, new insurance written for the industry is coming in a little bit lower.

We won’t know until everybody reports if it’s market share shift or it’s TAM just being a little bit smaller. When you look at your numbers, what do you think is going on there? Is market share shifting? Or is there a little bit less demand? And that’s what we’re seeing in terms of NIW.

Rohit Gupta, President and Chief Executive Officer, Enact: Yeah, good morning, Rick, and thank you for your question. So, at the beginning of the year in February, when I provided our view on MI market size for 2025, I gave guidance that we expect MI market size to be generally similar to 2024. MI market size in 2024, just for context, was around $300,000,000,000 Our view, even right now, is that that statement is true, although we might have gotten there in a slightly different way than we expected. I think mortgage rates continuing to remain high have probably suppressed purchase origination market compared to our original estimate, So, that could be some headwinds in one direction. But then on the flip side, we have seen consumers continue to use private mortgage insurance in a meaningful way.

So, we still see that 2025 will be similar to 2024. And I would say the two things that we are keeping an eye on, definitely mortgage rates, because that drives consumer affordability. So when mortgage rates are hovering close to 7% for a thirty year fixed mortgage, Consumers are trying to figure out if they can afford that home in a prudent and safe way. The second thing that we continue to hear from our lending partners is the uncertainty in the environment related to tariffs and any cascading impact on corporations or consumers. We saw a similar behavior back in 2022.

It actually reflected both in originations volume and even home prices flattening for a short period of time, and when that uncertainty abated, then consumers came back to the market. So I would say, short answer, relatively similar levels to 2024. And then the things that we are keeping an eye on are consumers basically coming back to the market as the uncertainty around tariffs abate.

Rick Shane, Analyst, JPMorgan: Got it. And when you think about your capital planning and obviously the offset to that is that when NIW is a little bit softer, it tends to be correlated with higher persistency. Does that sort of what you’ve seen so far and potentially how it impacts your outlook impact your capital return plans? Does that contribute to the increase or is it really just driven by the higher ROEs?

Rohit Gupta, President and Chief Executive Officer, Enact: Yeah, thank you, Rick. So, our capital return guidance is indicative of our actual performance, but we do take into account the macro environment both today and prospectively. And as we always do, we will continue to evaluate the amount based on business prospective market conditions, and also on an opportunistic basis our share price. So, as you saw in our results, we continue to see strong credit performance, as Dean articulated strong performance in our bottom line results, and that led us to increasing our full year return of capital guidance to approximately $400,000,000 The final amount and the form of capital return to shareholders will depend on how business performs from here on out. But I would say as a reminder, since our IPO, we have returned over $1,300,000,000 to shareholders, and we continue to think in a very balanced way on our capital priorities, first allocating capital to our insurance in force, thinking about allocating capital to investing in the business and looking at adjacencies, and lastly, making sure that we are always focused on returning capital to shareholders.

Rick Shane, Analyst, JPMorgan: Great. Thank you so much for taking my questions this morning.

Rohit Gupta, President and Chief Executive Officer, Enact: Thank you, Rick.

Conference Operator: Thank you. Your next question comes from the line of Mihir Bhatia with Bank of America. Your line is now open.

Mihir Bhatia, Analyst, Bank of America: Hi. Good morning, and thank you for taking my question. I wanted to just start with the delinquency outlook. I appreciate what you said about the credit fundamentals for housing credit still appear to be quite supportive. But maybe a two part question there.

The first is, are you seeing the headlines obviously talk a little bit more about home price is not being so great, and you talked a little bit about supply. But I guess, compared to six months ago or a year ago, are you seeing the housing are you seeing any kind of change in the has your view on housing credit changed? Are you is the headlines that we are seeing actually showing up in your data in any way in terms of stress for homeowners? So as we think about the outlook for delinquencies, is that something we should keep in mind? Because it looks like things have just been moving with typical seasonality.

And on that point, just given the different vintage sizes, typically, you see an increase of about 20 basis points in delinquencies, I think, in new notices, in the third quarter. Should is that should we expect something similar here? Or is there something going on with the large vintage sizes entering peak loss years that we should keep in mind? Thank you.

Rohit Gupta, President and Chief Executive Officer, Enact: Good morning, Mihir, and thank you for your question. Some of the last part of your question might be too precise for me, so I’ll hand it off to Dean, but let me start on kind of how we think about the two main points you talked about. First thing I would start off with just is consumers. And I would say, as I said in my prepared remarks, we still see the labor market being strong and balance sheets for our borrowers continue to be resilient in this environment. While there’s uncertainty in the economy about impacts of tariffs on corporations and consumers, we have not seen any meaningful impact of that on our borrowers yet.

Mir, just in terms of how we think about resiliency of our borrower and our portfolio, we actually run reports on a quarterly basis, taking a sample of our insurance in force to see what we think of consumer credit grid. And at the end of second quarter, we continue to see that metric actually perform well. So, that tells us that right now, our borrower on our insurance in force is in good shape. So, that’s why when you listen to our comments on consumers being strong, that’s what’s driving it, in addition to the data we shared on our new delinquencies and our new delinquency trends being in line with our seasonal trends. I would say, I’m very focused on talking about our borrowers, because we do acknowledge that in non prime space, we have seen stress in different asset classes, all the way from credit cards to autos and even mortgages.

But in the prime space, in the conventional space and our borrowers, we continue to see good performance. The second thing you talked about was regional home price declines. So, to Dean’s previous comments, I would say we have seen some regional home price depreciation in April and May. So, if you think about a rolling kind of home price trend on a three month basis, you see flat home prices. But again, if you think about this slowdown from an HPA perspective, it’s very comparable to what we saw in 2022, which was also a time where we saw economic uncertainty being heightened and consumers being actually more mindful of making big purchases.

We still believe that demographic trend from a housing perspective is robust, and there are definitely certain unique factors today, trade policy uncertainty and any implications of that on labor market, but we continue to be optimistic about household balance sheets and demographic trends that are supportive of our sector. Now, let me turn it over to Dean on the seasonal trends on performance.

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: Yeah, so Mihir, thanks for the question. And some of this is going to echo points that Rohit made, but let me see if I can add some color. First of all, just in terms of new delinquency development, our new DELC rates are very consistent with pre pandemic levels. I think that’s driven by that strong labor market, wage growth, the like that Rohit made reference to. And then from a CURE performance, we continue to see elevated CUREs relative to expectations.

I think that’s driven largely by the meaningful amount of embedded HPA across our insured portfolio. You know, just in terms of what we’re seeing maybe more recently in terms of new delinquency accident quarters and speaking about this particular quarter itself, we continue to see meaningful embedded home price appreciation on due delinquencies that are developing this quarter. You know, our performance experience shows that HPA is a significant mitigant to to loss. It increases the probability to cure. It reduces the probability of rolling the claim.

And in HPA, again, based on our experience, the impact of that is really linear. So every point of embedded HPA helps to reduce the probability of of ultimately rolling the claim. Obviously, more is better. Higher is better. We do put some stats in our earnings presentation about how much of our portfolio and how much of our delinquencies have at least 10% embedded equity in in their respective portfolios.

And I think that’s just a nice amount of cushion, to protect against some of the softness that’s developing in, local markets that Rohit made reference to earlier.

Mihir Bhatia, Analyst, Bank of America: Got it. No. That both both both your comments were quite helpful there, so thank you for that. Maybe just, I’ll I’ll get in queue after this again, but maybe just, any update on the Washington front? Obviously, we hear a lot of, I guess, lot of news, lot of tweets, but anything on the ground changing from a regulatory standpoint that’s impacting your business in a meaningful way?

Thank you.

Rohit Gupta, President and Chief Executive Officer, Enact: Yeah, Maher. So we are very engaged on the Washington front. As I’ve said in previous calls, we have very strong relationships with the GSEs, FHFA, and then across the housing ecosystem and with key legislators. So, we continue to engage in the dialogue on all the topics being discussed. So, whether it’s guideline changes or any changes to the programs that exist with the GSEs, as those announcements happen or as those initiatives start, we are actively engaged in making sure that we are continuing to create a housing finance system where we are supporting well qualified consumers achieve the dream of homeownership.

So, we think about specific initiatives, we can talk about any of these offline, but we are definitely in the actual working groups, either directly or through trade associations. So, that continues to be a productive dialogue.

Mihir Bhatia, Analyst, Bank of America: Thank you. Thanks for taking my questions.

Bose George, Analyst, KBW: Thank you.

Conference Operator: Thank you. The next question comes from Bose George with KBW. Your line is now open.

Bose George, Analyst, KBW: Hey, guys. Good morning. Actually, Dean, just a quick follow-up on the comments you made about the embedded HBA this quarter. Just when you look at the trend on that, the HPA on new notices, has there been a change in that over the last, say, or so?

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: I think it’s both. Thanks for the question. I mean, it’s definitely HPA overall has slowed and in some markets as we’ve been talking about, it’s declined. So you have seen some slowing, let’s say over the last twelve to maybe even eighteen months. At the same time, when you look at it in the aggregate over the course or over the total of the new delinquencies that were reported in the current quarter, it’s still substantial and still we believe serves as a meaningful mitigant to the probability of ultimately going to claim.

Bose George, Analyst, KBW: Okay, great. And then actually, in terms of the default to claim, can you talk about the sort of the actual default to claim levels that you’re seeing relative to that 9% that you kind of book it on new notices?

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: Yeah, so you correctly referenced, we do have a 9% claim rate on new delinquencies. I think we’ve stated this in the past, Bose, that that 9% claim rate really isn’t aligned with current performance trends. It’s more a nod to the fact that we’re operating in an environment of heightened economic uncertainty, and that uncertainty could, ultimately impact the performance trajectory of delinquencies rolling the claim on a go forward basis. That uncertainty has ebbed and flowed through time, but I still think today, you know, we’re operating with a high degree of uncertainty in the current environment. You know, I think from a performance perspective, obviously, we’ve seen performance meaningfully better than that 9% claim rate.

It’s really been the underpinning of the reserve releases that we did in the current quarter, obviously, 8,000,000 in the second quarter. But also, if you look back over the course of the last three years, there’s about roughly $250,000,000 of annual reserve release over those three years. So we continue to see performance better than 9%, but we still believe the 9% is prudent, in line with our prudent and measured approach to reserving and appropriate for for the here and now. You know, what would change that go forward, both is us looking at the future macroeconomic environment and saying that uncertainty has abated. That would cause us to come back and take a look at that appropriateness of that 9% and potentially make a change.

Bose George, Analyst, KBW: Okay, great. Thanks a lot.

Dean Mitchell, Chief Financial Officer and Treasurer, Enact: Thanks, Bert.

Conference Operator: Thank you. This concludes the question and answer session. I’d now like to turn the call back to Rohat Gupta for closing remarks.

Rohit Gupta, President and Chief Executive Officer, Enact: Thank you, Kathy, and thank you, everyone. We appreciate your interest in EnACT, and I look forward to seeing many of you at the virtual JPM Future of Financials Forum on August 13. Thank you.

Conference Operator: Thank you for your participation in today’s conference. This does conclude the program, and you may now disconnect.

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