Essent Group Ltd (ESNT) 2023 Q1 法說會逐字稿

Hello, and welcome to the Essent Group Ltd. First Quarter Earnings Call. (Operator Instructions) I will now turn the conference over to Phil Stefano. Please go ahead.

您好，歡迎參加 Essent Group Ltd 第一季度財報電話會議。 （操作員指示）我現在將會議轉交給 Phil Stefano。請繼續。

Thank you, Sarah. Good morning, everyone, and welcome to our call. Joining me today are Mark Casale, Chairman and CEO; and David Weinstock, Chief Financial Officer. Also on hand for the Q&A portion of the call is Chris Curran, President of Essent Guaranty.

謝謝你，莎拉。大家早上好，歡迎致電我們。今天與我一起出席的還有董事長兼首席執行官馬克·卡薩萊 (Mark Casale)；首席財務官戴維·溫斯托克 (David Weinstock)。 Essent Guaranty 總裁 Chris Curran 也出席了電話會議的問答部分。

Our press release, which contains Essent's financial results for the first quarter of 2023 was issued earlier today and is available on our website at essentgroup.com. Prior to getting started, I would like to remind participants that today's discussions are being recorded and will include the use of forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For a discussion of these risks and uncertainties, please review the cautionary language regarding forward-looking statements in today's press release, the risk factors included in our Form 10-K filed with the SEC on February 17, 2023 and any other reports and registration statements filed with the SEC, which are also available on our website.

我們的新聞稿今天早些時候發布，其中包含 Essent 2023 年第一季度的財務業績，可在我們的網站 essentgroup.com 上獲取。在開始之前，我想提醒與會者，今天的討論正在記錄中，並將包括前瞻性陳述的使用。這些陳述基於當前的預期、估計、預測和假設，存在風險和不確定性，可能導致實際結果存在重大差異。有關這些風險和不確定性的討論，請查看今天新聞稿中有關前瞻性陳述的警示性語言、我們於 2023 年 2 月 17 日向 SEC 提交的 10-K 表格中包含的風險因素以及任何其他報告和註冊聲明向 SEC 提交的文件，也可以在我們的網站上找到。

Now let me turn the call over to Mark.

現在讓我把電話轉給馬克。

Thanks, Phil, and good morning, everyone. Earlier today, we released our first quarter 2023 financial results, which continue to demonstrate the earnings power of our business. Our financial performance for the first quarter benefited from rising interest rates and favorable credit performance. Higher rates translated to higher investment income, along with higher persistency, which supports the growth of our in-force portfolio despite lower origination volumes. As we continue through 2023, we remain confident in our buy, manage and distribute operating model. While we recognize the uncertainty surrounding the economy in the near term, we continue to manage the business considering a range of scenarios. We remain constructive on housing over the longer term as we believe that demographic-driven demand and low inventory should provide foundational support to home prices.

謝謝菲爾，大家早上好。今天早些時候，我們發布了 2023 年第一季度財務業績，繼續證明了我們業務的盈利能力。我們第一季度的財務業績得益於利率上升和良好的信貸表現。較高的利率轉化為更高的投資收入以及更高的持久性，儘管發起量較低，但仍支持我們有效投資組合的增長。到 2023 年，我們對我們的購買、管理和分銷運營模式仍然充滿信心。雖然我們認識到短期內經濟存在不確定性，但我們將繼續考慮一系列情況來管理業務。從長遠來看，我們對住房仍持建設性態度，因為我們認為人口驅動的需求和低庫存將為房價提供基礎支撐。

And now for our results. For the first quarter of 2023, we reported net income of $171 million compared to $274 million a year ago. On a diluted per share basis, we earned $1.59 for the first quarter compared to $2.52 a year ago, and our annualized return on average equity was 15%. As of March 31, our insurance in force was $232 billion, a 12% increase compared to a year ago. Our 12-month persistency on March 31 was 84%, and approximately 80% of our in-force portfolio has a note rate below 5%. Given current rates, we anticipate that persistency could remain elevated in the short term.

現在我們的結果。 2023 年第一季度，我們的淨利潤為 1.71 億美元，而去年同期為 2.74 億美元。按攤薄每股計算，我們第一季度的盈利為 1.59 美元，而去年同期為 2.52 美元，年化平均股本回報率為 15%。截至 3 月 31 日，我們的有效保險金額為 2,320 億美元，比去年同期增長 12%。截至 3 月 31 日，我們的 12 個月持續率為 84%，我們有效投資組合中約 80% 的票據利率低於 5%。鑑於目前的利率，我們預計短期內持續性可能會保持較高水平。

The credit quality of our insurance in force remains strong with a weighted average FICO of 746 and a weighted average original LTV of 92%. While certain MSAs could experience price corrections, we believe home prices nationwide will generally be flat in the coming years. We also anticipate that the embedded home equity within the existing book should continue to mitigate the risk of near-term claims.

我們現有保險的信用質量依然強勁，加權平均 FICO 為 746，加權平均原始 LTV 為 92%。雖然某些 MSA 可能會經歷價格調整，但我們認為未來幾年全國房價總體將持平。我們還預計，現有賬簿中的嵌入式房屋淨值應繼續降低近期索賠的風險。

On the business front, during the quarter, we continued raising rates through our risk-based pricing engine, EssentEDGE. We believe that the pricing environment remains constructive and is reflective of ensuring long-tail mortgage credit risk given the macroeconomic backdrop. As of March 31, Essent Re's third-party annual run rate revenues are approximately $70 million, while our third-party risk in force was approximately $2 billion. During the quarter, Essent Re continued to capitalize on the current environment to optimize returns and contribute to the profitability of our franchise.

在業務方面，本季度我們繼續通過基於風險的定價引擎 EssentEDGE 提高費率。我們認為，定價環境仍然具有建設性，並反映了在宏觀經濟背景下確保長尾抵押貸款信貸風險的情況。截至 3 月 31 日，Essent Re 的第三方年運行收入約為 7000 萬美元，而我們有效的第三方風險約為 20 億美元。本季度，Essent Re 繼續利用當前環境來優化回報並為我們特許經營的盈利能力做出貢獻。

Cash and investments as of March 31 were over $5 billion, and the annualized investment yield for the first quarter was 3.4%, up from 2.1% a year ago. Our new money yield in the first quarter approximated 5%, providing continued tailwinds for our investment portfolio. As a reminder, for every 1 point increase in the investment yield, there is roughly a 1 point increase in ROE. We continue to operate from a position of strength with $4.6 billion in GAAP equity, access to $2.1 billion in excess of loss reinsurance and over $1 billion of available holding company liquidity.

截至3月31日，現金和投資超過50億美元，第一季度年化投資收益率為3.4%，高於去年同期的2.1%。第一季度我們的新資金收益率約為 5%，為我們的投資組合提供了持續的推動力。提醒一下，投資收益率每增加1個點，ROE大約就會增加1個點。我們繼續以 46 億美元的 GAAP 股本、 21 億美元的超額損失再保險和超過 10 億美元的可用控股公司流動資金的優勢開展業務。

With a trailing 12-month underwriting margin of 87% and operating cash flow of $595 million, our franchise remains well positioned from an earnings, cash flow and balance sheet perspective. We continue to take a measured approach to capital and remain committed to managing it for the long term. Our strong financial performance affords us the ability to take a balanced approach to capital between distribution and deployment, which includes the $100 million for our planned title acquisition announced in February. While we have initiated an integration and transition process for the pending title transaction, the companies will continue to operate independently until we close the deal later in the year.

過去 12 個月的承保利潤率為 87%，運營現金流為 5.95 億美元，從盈利、現金流和資產負債表的角度來看，我們的特許經營業務仍然處於有利地位。我們繼續對資本採取審慎的態度，並繼續致力於長期管理資本。我們強勁的財務業績使我們能夠在分配和部署之間採取平衡的資本方法，其中包括我們 2 月份宣布的計劃收購所有權的 1 億美元。雖然我們已經針對待決的產權交易啟動了整合和過渡流程，但兩家公司將繼續獨立運營，直到我們在今年晚些時候完成交易。

As noted in the past, we believe allocating capital for growth is a better value creator for the shareholders over the long term. However, we also recognize that returning capital to shareholders generates meaningful returns for investors. Year-to-date through April 30, we repurchased approximately 800,000 shares for $32 million. Further, I'm pleased to announce that our Board has approved a common dividend of $0.25. We continue to see our dividend as a meaningful demonstration of the confidence we have in the stability of our cash flows and the strength in our capital position.

正如過去所指出的，我們相信，從長遠來看，為增長配置資本可以為股東創造更好的價值。然而，我們也認識到，向股東返還資本可以為投資者帶來有意義的回報。今年迄今截至 4 月 30 日，我們以 3,200 萬美元回購了約 80 萬股股票。此外，我很高興地宣布，我們的董事會已批准 0.25 美元的普通股息。我們仍然認為我們的股息有意義地表明了我們對現金流的穩定性和資本狀況的實力充滿信心。

Now let me turn the call over to Dave.

現在讓我把電話轉給戴夫。

Thanks, Mark, and good morning, everyone. Let me review our results for the quarter in a little more detail. For the first quarter, we earned $1.59 per diluted share compared to $1.37 last quarter and $2.52 in the first quarter a year ago. As a reminder, our first quarter 2022 results benefited from the release of approximately $100 million of reserves associated with COVID-related defaults from 2020.

謝謝，馬克，大家早上好。讓我更詳細地回顧一下我們本季度的業績。第一季度，我們每股攤薄收益為 1.59 美元，而上季度為 1.37 美元，去年同期為 2.52 美元。提醒一下，我們 2022 年第一季度的業績受益於從 2020 年起釋放的約 1 億美元與新冠病毒相關違約相關的準備金。

Net premium earned in the first quarter of 2023 was $211 million and included $14.7 million of premiums earned by Essent Re on our third-party business. The average premium rate for the U.S. mortgage insurance business in the first quarter was 40 basis points and the net average premium rate was 34 basis points, both consistent with the fourth quarter of 2022.

2023 年第一季度賺取的淨保費為 2.11 億美元，其中包括 Essent Re 在我們的第三方業務上賺取的 1,470 萬美元保費。美國抵押貸款保險業務第一季度平均保費率為40個基點，淨平均保費率為34個基點，均與2022年第四季度一致。

Net investment income increased $5.4 million or 14% in the first quarter of 2023 compared to last quarter due primarily to higher yields on new investments and floating rate securities resetting to higher rates. Other income in the first quarter was $4.9 million, which includes a $368,000 loss due to a decrease in the fair value of embedded derivatives in certain of our third-party reinsurance agreement. This compares to a $6.5 million decrease in the fair value of these derivatives in the fourth quarter of 2022.

與上一季度相比，2023 年第一季度的淨投資收入增加了 540 萬美元，即 14%，這主要是由於新投資的收益率上升以及浮動利率證券重置為更高的利率。第一季度的其他收入為 490 萬美元，其中包括由於我們某些第三方再保險協議中嵌入衍生品的公允價值下降而造成的 368,000 美元損失。相比之下，2022 年第四季度這些衍生品的公允價值減少了 650 萬美元。

The provision for loss and loss adjustment expenses was a benefit of $180,000 in the first quarter of 2023 compared to a provision of $4.1 million in the fourth quarter of 2022 and a benefit of $106.9 million in the first quarter a year ago. At March 31, the default rate was 1.57%, down 9 basis points from 1.66% at December 31, largely due to favorable cure activity on prior year defaults.

2023 年第一季度的損失和損失調整費用撥備為 18 萬美元，而 2022 年第四季度的撥備為 410 萬美元，一年前第一季度的撥備為 1.069 億美元。截至 3 月 31 日，違約率為 1.57%，較 12 月 31 日的 1.66% 下降 9 個基點，這主要是由於對上一年違約的積極補救活動。

Other underwriting and operating expenses in the first quarter were $48.2 million, an increase of $1.3 million over the fourth quarter of 2022 and included approximately $3.4 million of transaction costs associated with our announced title business acquisition. The expense ratio was 23% this quarter, consistent with the fourth quarter of 2022. We continue to estimate that other underwriting and operating expenses will be approximately $175 million for the full year 2023, excluding expenses associated with the announced title business acquisition and related transaction costs.

第一季度的其他承保和運營費用為 4820 萬美元，比 2022 年第四季度增加 130 萬美元，其中包括與我們宣布的產權業務收購相關的約 340 萬美元的交易成本。本季度費用率為 23%，與 2022 年第四季度一致。我們繼續估計 2023 年全年其他承保和運營費用約為 1.75 億美元，不包括與已宣布的產權業務收購和相關交易相關的費用成本。

During the first quarter, Essent Group paid a cash dividend totaling $26.8 million to shareholders. In March, we repurchased $16.6 million of shares under the authorization approved by our Board in May 2022. We repurchased an additional $15.1 million of shares in April 2023.

第一季度，Essent Group 向股東支付了總計 2680 萬美元的現金股息。 3 月份，我們根據董事會 2022 年 5 月批准的授權回購了 1,660 萬美元的股票。2023 年 4 月，我們又回購了 1,510 萬美元的股票。

As a reminder, Essent has a credit facility with committed capacity of $825 million. Borrowings under the credit facility accrue interest at a floating rate tied to a short-term index. As of March 31, we had $425 million of term loan outstanding with a weighted average interest rate of 6.52%, up from 6.02% at December 31. Our credit facility also has $400 million of undrawn revolver capacity that provides an additional source of liquidity for the company. At March 31, our debt to capital ratio was 8%.

提醒一下，Essent 擁有承諾容量為 8.25 億美元的信貸額度。信貸安排下的借款按與短期指數掛鉤的浮動利率計息。截至 3 月 31 日，我們的未償還定期貸款為 4.25 億美元，加權平均利率為 6.52%，高於 12 月 31 日的 6.02%。我們的信貸安排還擁有 4 億美元的未提取循環貸款能力，為企業提供了額外的流動性來源。公司。截至3月31日，我們的債務資本比率為8%。

During the first quarter, Essent Guaranty paid a dividend of $90 million to its U.S. holding company. Based on unassigned surplus at March 31, the U.S. mortgage insurance companies can pay additional ordinary dividends of $292 million in 2023. As of quarter end, the combined U.S. mortgage insurance business statutory capital was $3.2 billion with a risk-to-capital ratio of 10.3:1. Note that statutory capital includes $2.2 billion of contingency reserves at March 31, 2023. Over the last 12 months, the U.S. mortgage insurance business has grown statutory capital by $148 million while at the same time paying $310 million of dividends to our U.S. holding company.

第一季度，Essent Guaranty 向其美國控股公司支付了 9000 萬美元的股息。根據截至 3 月 31 日的未分配盈餘，美國抵押貸款保險公司可以在 2023 年額外支付 2.92 億美元的普通股息。截至季度末，美國抵押貸款保險業務法定資本總額為 32 億美元，風險資本比為 10.3 ：1。請注意，法定資本包括截至 2023 年 3 月 31 日的 22 億美元應急準備金。在過去 12 個月中，美國抵押貸款保險業務的法定資本增加了 1.48 億美元，同時向我們的美國控股公司支付了 3.1 億美元的股息。

Now let me turn the call back over to Mark.

現在讓我把電話轉回給馬克。

Thanks, Dave. In closing, our balance sheet and liquidity remains strong while higher interest rates continue to benefit the persistency of our in-force book and investment income. Also, the quality of our portfolio continues to drive positive credit performance. Looking forward, our franchise is well positioned, and we remain confident in the strength of our operating model. Our strong financial results continue to generate excess capital, which we will deploy in a balanced manner between investment in growing our business and distribution to our shareholders.

謝謝，戴夫。最後，我們的資產負債表和流動性仍然強勁，而較高的利率繼續有利於我們有效賬面和投資收入的持久性。此外，我們投資組合的質量繼續推動積極的信貸表現。展望未來，我們的特許經營處於有利地位，我們對我們運營模式的實力仍然充滿信心。我們強勁的財務業績繼續產生多餘的資本，我們將以平衡的方式配置這些資本，用於發展業務的投資和向股東的分配。

Now let's get to your questions. Operator?

現在讓我們回答您的問題。操作員？

(Operator Instructions) Your first question comes from the line of Mark DeVries with Barclays.

（操作員說明）您的第一個問題來自巴克萊銀行的 Mark DeVries。

Mark, I know you don't target market share. But it looks like you clearly gained share this quarter. Just hoping to get some insight on what you think might have drove that. And let me just ask my second question because it's related. Could you also just talk about what you're seeing across the industry from a pricing dynamic perspective?

馬克，我知道你的目標不是市場份額。但看起來您本季度的份額明顯增加了。只是希望能深入了解您認為可能推動這一趨勢的因素。讓我問第二個問題，因為它是相關的。您能否從定價動態的角度談談您在整個行業中看到的情況？

Sure, Mark. I know I'm like a broken record here, but the market share always kind of ebbs and flows quarter-to-quarter. I think we looked at -- I looked at it the other day. The last 7 years, our market share average is 16%, which is -- which I would expect it to be by the end of the year, right? I mean, it's a little high in the first quarter. But also keep in mind, Mark, it's a small market so that the delta between the #1 market share and #6 is like $5 billion, relatively tight. So little movements can change things. So nothing in particular, as I noted in the script. We continue to raise rates. And my guess is we're probably going to raise them a bit more, We have the room. It's not our goal to be #1 in market share. And we look at this really just as an opportunity again to raise pricing potentially across the board, certainly in pockets. But again, we want to move back to the middle of the pack if we can.

當然，馬克。我知道我在這裡就像一個破紀錄的人，但市場份額總是按季度波動。我想我們看過——我前幾天看過。過去 7 年，我們的市場份額平均為 16%，我預計到今年年底會達到這個水平，對嗎？我的意思是，第一季度的水平有點高。但也要記住，馬克，這是一個很小的市場，因此排名第一的市場份額和排名第六的市場份額之間的差距約為 50 億美元，相對較小。小小的動作就能改變一切。正如我在劇本中指出的那樣，沒有什麼特別的。我們繼續加息。我的猜測是我們可能會提高一點，我們有空間。我們的目標不是成為市場份額第一。我們認為這確實是一個再次全面提高定價的機會，當然是在口袋裡。但同樣，如果可以的話，我們希望回到中間位置。

And just in terms of unit economics, I think they're relatively good. We said we kind of target that 12% to 15% range. Given the spike in investment yields, they're probably a little bit towards -- closer to the 15%. I would have said they were much closer to the 12% a year ago. I mean, there's been a significant kind of bump up in pricing, probably to the point where we're right around 2019 type levels in terms of new production, which, I think, given kind of a 3 to 4 flattish outlook on HPA, I think it's warranted. I'd said before, we kind of want to see that pricing with a 4 handle on it. We're getting there, which is good. Longer term, that sets the industry up well to be -- to have a strong balance sheet because, remember, we're there to pay claims in times of stress.

就單位經濟效益而言，我認為它們相對較好。我們說過我們的目標是 12% 到 15%。鑑於投資收益率飆升，他們可能會稍微接近 15%。我想說他們更接近一年前的 12%。我的意思是，價格出現了大幅上漲，可能到了我們在新產量方面處於 2019 年型號水平左右的程度，我認為，考慮到 HPA 的前景 3 到 4 持平，我認為這是有道理的。我之前說過，我們希望看到帶有 4 個手柄的定價。我們正在到達那裡，這很好。從長遠來看，這將使該行業擁有強大的資產負債表，因為請記住，我們會在壓力時期支付索賠。

So again, we thought the pricing got pretty compressed 12, 18 months ago, and it's really started to rebound. And we would expect it to stay at this level again given, I think, the discipline in the industry is much stronger than people think. And I think that's been evidenced. And I would expect that to continue through this year. We don't see anything changing. I just -- you listened to some of the commentary for the other MIs. And again, it's just a much more of a financial led business these days if you look at where the backgrounds of the other leaders in the industry at the top of the house. So again, I'm pretty -- we're pretty encouraged from a pricing environment. And again, just when you think about the nominal cost of MI, Mark, for the borrower, still very efficient. It's still very efficient. It's a good value. We're putting folks, first-time homeowners and homes, and it's relatively tough an efficient process.

再說一次，我們認為 12、18 個月前價格已經被相當壓縮，而且現在確實開始反彈。我認為，鑑於該行業的紀律比人們想像的要強大得多，我們預計它會再次保持在這個水平。我認為這已經得到證明。我預計這種情況將持續到今年。我們沒有看到任何變化。我只是——你聽了其他軍事情報局的一些評論。再說一遍，如果你看看該行業其他高層領導者的背景，現在它更像是一個以金融為主導的業務。再說一次，我很高興——我們從定價環境中得到了很大的鼓舞。再說一次，當你考慮 MI 的名義成本時，馬克，對於借款人來說，仍然非常有效。效率還是很高的。這是一個很好的價值。我們正在安置人們、首次購房者和房屋，這是一個相對困難的高效過程。

Your next question comes from the line of Bose George with KBW.

您的下一個問題來自 Bose George 和 KBW 的線路。

Just on investment income, the increase this quarter was just -- was pretty strong. So just kind of thinking about the cadence of the increase in investment income going forward. Can you kind of help us out with that?

僅就投資收入而言，本季度的增長相當強勁。因此，只需思考一下未來投資收益增加的節奏。你能幫我們解決這個問題嗎？

Yes, Bose, good question. I think there's a couple of things going on here. We mentioned, I think, in the fourth quarter that we took an opportunity to do a little bit of repositioning in the portfolio where we have found that we had an accretive trade that we got out of some positions and reinvested at higher rates. And if you look at today's rates, and Mark commented on this on the script, that we're investing at 5% in the first quarter. Is there a lot more upside? I think over time, if you look at the yield curve, we're probably going to see nice pickups from year-on-year. But I don't know that sequentially, it will be as dramatic as what you might have seen.

是的，Bose，好問題。我認為這裡發生了一些事情。我認為，我們在第四季度提到，我們抓住機會在投資組合中進行了一些重新定位，我們發現我們進行了增值交易，我們退出了一些頭寸並以更高的利率進行了再投資。如果你看看今天的利率，馬克在劇本上對此發表了評論，我們第一季度的投資率為 5%。還有更多的好處嗎？我認為隨著時間的推移，如果你觀察收益率曲線，我們可能會看到同比的良好回升。但我不知道接下來的情況會像你所看到的那樣戲劇性。

Okay. Great. That's helpful. And then just actually a regulatory question, just with the changes in the GSE LLPAs and the FHA premium stuff. Any thoughts if that's going to do it much in terms of market share?

好的。偉大的。這很有幫助。實際上，這只是一個監管問題，即 GSE LLPA 和 FHA 溢價內容的變化。您有什麼想法，這是否會對市場份額產生很大影響？

No, Bose. Again, I think we've talked about this a couple of quarters ago. We kind of see it more as offsetting penalties. So we don't see a big increase in our share, and if we do see it on the FHA side. I think it's a little early to tell. But right now, that's kind of what we're seeing.

不，博斯。我想我們在幾個季度前就已經討論過這個問題了。我們更多地將其視為抵消懲罰。因此，我們認為我們的份額不會大幅增加，即使聯邦住房管理局方面確實看到了這種情況。我認為現在說還為時過早。但現在，這就是我們所看到的。

Your next question comes from the line of Mihir Bhatia with Bank of America.

您的下一個問題來自美國銀行的米希爾·巴蒂亞 (Mihir Bhatia)。

I guess on the credit side, I did want to ask, is there anything that you're being cautious on, any areas? I mean, obviously, I understand the macro is getting a little weaker. It seems like there's a little bit of DTI inflation, which is also helping price. But is there anything else on the credit side that is driving the price increases?

我想在信用方面，我確實想問，有什麼方面你要謹慎的嗎？我的意思是，顯然，我理解宏觀經濟正在變得有點疲軟。 DTI 似乎有一點通脹，這也有助於價格上漲。但信貸方面還有其他因素推動價格上漲嗎？

I think it's the normal things, right, Mihir. So think of it clearly just on the collateral side, you're going to price up in certain MSAs, where we have kind of different forward-looking views on the HPA, kind of where it's going. And like I said, it's flattish across the country over the next 3 to 4 years. But it's certainly going to be pockets, and we kind of know where the pockets are, where we're going to have to price up. In terms of just core credit, I think, again, it's around the layered risk. So it's really going to be cautious around the tails, whether that's higher DTI, lower FICO, higher LTV, very normal things that we're looking at. And again, with our pricing engine, I think we can -- we can pick things a little bit better than we could under the old model. So I think that plays into some of it, too. So not all high DTIs are created equal. Some are actually relatively good values and others you should really stay away from. So it's really kind of getting down to that loan level kind of analysis there.

我認為這是正常的事情，對吧，米希爾。因此，請清楚地考慮在抵押品方面，某些 MSA 的價格將會上漲，我們對 HPA 的未來走向有不同的前瞻性看法。正如我所說，未來 3 到 4 年全國范圍內的情況將持平。但肯定是口袋，我們知道口袋在哪裡，我們必須在哪裡提高價格。就核心信貸而言，我再次認為，它是圍繞分層風險的。因此，我們確實要對尾部保持謹慎，無論是更高的 DTI、更低的 FICO、更高的 LTV，這些都是我們正在關注的非常正常的事情。再說一遍，通過我們的定價引擎，我認為我們可以——我們可以比舊模式下更好地選擇一些東西。所以我認為這也起到了一定的作用。因此，並非所有高 DTI 都是一樣的。有些實際上是相對較好的價值觀，而另一些你應該遠離。因此，這確實是一種深入到貸款水平的分析。

Got it. And then in terms of just the market share shifts, and again, not really so concerned as you pointed out about like one quarter, your market share will be a higher, one will be lower. But more just generally, where is the growth -- where was the growth, if you will, in your portfolio on a little bit -- like we obviously just get the data at the total NIW level, but like maybe from your own internal metrics, you have a view of where your outsized growth came this quarter? Was it just across the board? Were there particular, I don't know, channels?

知道了。然後就市場份額的變化而言，再次強調，並不像您指出的那樣擔心，大約一個季度，您的市場份額會更高，也會更低。但更一般地說，增長在哪裡——如果你願意的話，你的投資組合中的增長在哪裡——就像我們顯然只是獲得總國家利益豁免水平的數據，但也許來自你自己的內部指標，您認為本季度的超額增長來自何處？難道只是一刀切嗎？我不知道有什麼特別的渠道嗎？

Our NIW was flat quarter-over-quarter. So we didn't really notice any outsized growth, per se. And some lenders go up, some lenders go down. It's also there's lender-specific. So we saw one of the larger mortgage banks in the country kind of sell their wholesale division to another player. So we've seen -- you always see turnover at the top. Another large refinance-driven shop last year really lowered origination. So there's movement around lenders. But -- and then again, it might be different lenders. Some MIs may have different pricing around certain lenders. We really don't for the most part, especially via the engine. It's all borrower-specific. So we didn't notice any patterns, per se. And again, we didn't see any spikes either given the flattish NIW between quarters.

我們的 NIW 環比持平。所以我們本身並沒有真正注意到任何巨大的增長。一些貸款人會上升，一些貸款人會下降。它也有貸款人特定的。因此，我們看到該國一家較大的抵押貸款銀行將其批發部門出售給另一家公司。所以我們看到——你總是會看到營業額最高。去年，另一家大型再融資驅動的商店確實降低了起源。因此，圍繞貸方的活動正在發生。但是——話又說回來，可能是不同的貸方。一些多邊機構可能對某些貸方有不同的定價。我們在大多數情況下確實不這樣做，尤其是通過引擎。這都是藉款人特定的。所以我們本身沒有註意到任何模式。再說一遍，鑑於各季度之間的 NIW 持平，我們也沒有看到任何峰值。

Your next question comes from the line of Geoffrey Dunn with Dowling & Partners.

您的下一個問題來自 Dowling & Partners 的杰弗裡·鄧恩 (Geoffrey Dunn)。

Mark, from a rough high level, I'm wondering if you could talk about pricing in a different perspective, more from a cumulative loss assumption. On its low, was pricing getting down towards a 1% cumulative on average? Or it that aggressive? And where do you think maybe the pricing is today? Or where is a 4 plus handle potentially implying a cumulative loss assumption?

馬克，從粗略的高水平來看，我想知道您是否可以從不同的角度談論定價，更多地從累積損失假設出發。在最低點時，定價是否平均累計下降 1%？還是這麼有侵略性？您認為今天的定價可能是多少？或者 4 加句柄在哪裡可能暗示累積損失假設？

Yes, good question. Again, we don't jerk around our cumulative loss assumption. So again, we're we've always been -- and obviously, now with the engine, it's much more loan levels specific. But it's always in that kind of 2% to 3% range. It's driven clearly a little bit with our HPA view. I would say when pricing kind of troughed 12, 15 months ago, we just -- I look at it more from the returns, right? So we kind of in that 12 to 15%-ish range. It was pretty much at the lower end of the range. And you can stretch to get it to that level given CRT and leverage and all those sort of things, right? You can't hide from the raw pricing.

是的，好問題。再次強調，我們不會隨意改變我們的累積損失假設。再說一次，我們一直都是——顯然，現在有了引擎，貸款水平更加具體。但它總是在 2% 到 3% 的範圍內。我們的 HPA 觀點明顯地推動了這一點。我想說，當定價在 12、15 個月前觸底時，我們只是——我更多地從回報來看，對嗎？所以我們大概在 12% 到 15% 左右的範圍內。這幾乎處於該範圍的下限。考慮到 CRT 和槓桿以及所有這些因素，你可以將其延伸至該水平，對嗎？您無法隱藏原始定價。

So when pricing dips into the 2s, which we saw on one large lender bid that we clearly didn't win, you have to have pretty aggressive assumptions. I'm not even sure 1% gets you there. So you have to -- it's just the cost of capital alone, Jeff, and the cost to originate. So again, we felt that's why you saw our share kind of gets so low in that third. And I think it was the fourth quarter and first quarter, again, 12, 15 months ago. So -- and we said it we thought it was too low. And again, just given the current environment, so maybe just the uncertainty in the environment last year kind of sparked folks to move pricing up. One large MI clearly had backed out of the market.

因此，當定價跌至 2 秒時（我們在一家大型貸方的投標中看到我們顯然沒有獲勝），您必須有相當激進的假設。我什至不確定 1% 是否能讓你到達那裡。所以你必須——傑夫，這只是資本成本和發起成本。再說一次，我們覺得這就是為什麼你看到我們的份額在第三個中變得如此之低。我認為這是第四季度和第一季度，同樣是 12、15 個月前。所以——我們說過我們認為這個數字太低了。再說一次，考慮到當前的環境，去年環境的不確定性可能會促使人們提高價格。一家大型 MI 顯然已退出市場。

And they're -- we're a bellwether on one side, they were a bellwether on the other. And they're backing out really opened up room for others to kind of increase. So I think it's been positive, right? And again, at the end of the day, we need to have the balance sheet to pay claims and make sure we have the flexibility, whether it's PMIERs or at the state level and just to chase it down like that, it's just not in the best interest longer term in the industry, to be quite honest. So that's -- I'm very -- I think we're encouraged to see where the pricing is. And again, like I said earlier on, 10 basis points, the pricing -- the absolute pricing that we're giving to the borrower today, we think it's pretty cost effective. Especially when you think about a 6% mortgage rate. So we'll see if it can continue. But I would say we're definitely encouraged to where the pricing levels are in the industry today.

他們——我們是一方面的領頭羊，他們是另一方面的領頭羊。他們的退出確實為其他人提供了增加的空間。所以我認為這是積極的，對吧？再說一次，歸根結底，我們需要有資產負債表來支付索賠，並確保我們有靈活性，無論是 PMIER 還是州一級，只是為了像這樣追查它，它只是不在老實說，這個行業的長期利益是最大的。所以——我非常——我認為我們被鼓勵去看看定價在哪裡。再說一次，就像我之前所說的，10 個基點的定價——我們今天給借款人的絕對定價，我們認為這是相當具有成本效益的。尤其是當你想到 6% 的抵押貸款利率時。所以我們會看看它是否可以繼續。但我想說的是，我們對當今行業的定價水平絕對感到鼓舞。

Okay. And then with respect to Essent Guaranty on the statutory side, you've taken dividends up a very low level with at least the last 5 quarters. With where you are in your maturity, earnings power and understanding things like -- change with the economy, but on average, do you expect to maximize ordinary course dividend on an annual basis just as a rule of thumb? Or any kind of parameters around that to give us a better idea of cash inflows on the Holdco?

好的。然後，就法定方面的基本擔保而言，至少在過去 5 個季度中，您已將股息提高到非常低的水平。考慮到你的成熟度、盈利能力和對諸如經濟變化之類的事情的理解，但平均而言，你是否期望根據經驗，每年最大化普通課程股息？或者有什麼參數可以讓我們更好地了解控股公司的現金流入？

Yes Great question. I would say, given the environment, and we'll take it -- I don't know if we'll take it a quarter at a time, I guess it's a year at a time in terms of guarantee outflow. We would fully expect to max it out. So we have, I think, another 292 capacity this year. And the reason is it's easy to put it back down to. We kind of like to see the cash, and we like it for investors to see the cash at the Holdco. And then whether that gets upstream to group and goes outside the company via repurchases or dividends, it's used to reinvest along -- within at the holdings level, keep it in the U.S. I think it's a good picture for investors to see. So yes, I think given the environment this year, we would fully expect to upstream it.

是的，好問題。我想說，考慮到環境，我們會接受它——我不知道我們是否會一次接受一個季度，我想就保證流出而言，一次接受一年。我們完全希望能夠最大限度地發揮它。因此，我認為今年我們還有 292 個產能。原因是很容易將其歸結為。我們有點希望看到現金，我們也希望投資者看到控股公司的現金。然後，無論是上游到集團，還是通過回購或股息進入公司外部，它都會被用來進行再投資——在控股層面上，將其保留在美國。我認為這對投資者來說是一個很好的前景。所以，是的，我認為考慮到今年的環境，我們完全期望上游。

Your next question comes from the line of Rick Shane with JPMorgan.

您的下一個問題來自摩根大通的 Rick Shane。

It's Melissa on for Rick today. One of our questions have already been asked, but I wanted to come back to the issue of dividends and share repurchase. Certainly, keeping in mind your point about having the balance sheet to meet claim [needs] going forward. I'm curious what it would take for you to get more comfortable with taking up the dividend or increasing repurchase activity. Is it really just a function of sort of getting through a cycle?

今天由梅麗莎替瑞克主持。我們的問題之一已經被問到，但我想回到股息和股票回購問題。當然，請記住您關於資產負債表可以滿足未來索賠[需求]的觀點。我很好奇您需要怎樣才能更輕鬆地接受股息或增加回購活動。這真的只是一種經歷循環的功能嗎？

That's -- it's a good question and one that we've been thinking about. So I would say just on the dividend, we like the dividend. We think it's a good indication to shareholders of how the business has changed, right? Just given the reinsurance, the sustainability that affords us with reinsurance is pretty important. And we think it's a tangible demonstration to investors. I mean, the industry has changed significantly over the past 15 years. It doesn't get a lot of credit for it. But when you think about 95% of our book is GSE-backed, which is in the GSE's, 745 FICO. And the GSEs have made significant improvements over the past 15 years with DU and LP, their quality control and the level of guardrails they have, in addition to the qualified mortgage, right? So the qualified mortgage has kept a lot of that long tail risk business or layered risk business out of the business. And then you have just even the introduction of forbearance and how that means to the borrower. So that goes into that.

這是一個很好的問題，也是我們一直在思考的一個問題。所以我想說，就股息而言，我們喜歡股息。我們認為這可以很好地向股東表明業務發生了怎樣的變化，對嗎？就再保險而言，再保險為我們提供的可持續性非常重要。我們認為這對投資者來說是一個切實的展示。我的意思是，這個行業在過去 15 年裡發生了巨大的變化。它並沒有因此得到太多的讚譽。但是當你想到我們的書的 95% 都是由 GSE 支持的，即 GSE 的 745 FICO 中的內容。過去 15 年裡，GSE 在 DU 和 LP 方面取得了重大改進，除了合格的抵押貸款之外，他們的質量控制和護欄水平也取得了顯著的進步，對嗎？因此，合格的抵押貸款將許多長尾風險業務或分層風險業務排除在外。然後你甚至會介紹寬容以及這對借款人意味著什麼。所以這就涉及到了。

So I think we're -- in terms of the kind of the cash flows of the business, we like the dividend. We kept it at $0.25 and we announced it last quarter. We're going to kind of look at that every year, right? So every year, we'll take a step back and say, do we want to take it from -- do we want to keep it at $0.25? Where do we want to take it? And then in terms of repurchases, it's really a matter of what other opportunities are out there for the business. We generally have, I would say, a retained cash and invest mentality. So whether that's in the core business, we clearly entered into the title business. We like that longer term. We think it's better for shareholders in terms of diversified revenue stream less of a monoline, per se, that's accretive to book value per share, right? It's really about maintaining returns and growing book value per share.

所以我認為，就業務現金流量而言，我們喜歡股息。我們將其價格保持在 0.25 美元，並於上季度宣布。我們每年都會關注這個問題，對嗎？因此，每年，我們都會後退一步問，我們是否想要將其保持在 0.25 美元？我們想把它帶到哪裡？然後就回購而言，這實際上是企業還有哪些其他機會的問題。我想說，我們通常有保留現金和投資的心態。因此，無論是在核心業務中，我們顯然都進入了產權業務。我們喜歡這個長期目標。我們認為，就多元化收入來源而言，這對股東來說更好，而不是單一業務，這本身會增加每股賬面價值，對吧？這實際上是為了維持回報和增加每股賬面價值。

And we look at it really as the numerator and the denominator investments, whether the core business or strategically outside the core business increase the numerator, dividends decrease the denominator as do repurchases. And I think with repurchases, we've changed -- we have altered kind of our view a little bit. I mean, last 2 years ago, we did a $250 million -- I think it ended last year, but $250 million repurchase 10b5 plan, kind of almost like a road plan. And we chew through it relatively quickly, I think, in less than a year. So that caused us to kind of take a step back. And I think now we're going to be a little bit more opportunistic about it, which will have much more of an overlay.

我們實際上將其視為分子和分母投資，無論是核心業務還是核心業務之外的戰略投資都會增加分子，股息會減少分母，回購也是如此。我認為通過回購，我們已經改變了——我們稍微改變了我們的觀點。我的意思是，去年 2 年前，我們做了一個 2.5 億美元的計劃——我想它去年就結束了，但是 2.5 億美元的回購 10b5 計劃，有點像一個道路計劃。我認為，我們在不到一年的時間里相對較快地消化了它。所以這讓我們後退了一步。我認為現在我們對此會更加機會主義，這將有更多的疊加。

So as we look -- and it's really going to be quarter-by-quarter what opportunities do we see kind of capital needs within the business what opportunities do we see kind of strategically outside of the business, whether that's title, ventures, other opportunities should they come up. And then quite frankly, where is the stock trading, right? So again, our view is buying the stock below book value is accretive to book value per share growth, which is very important to us. And we just thought -- we saw the opportunity in the quarter we trade within the KBE index, which is very bank-heavy, obviously.

因此，當我們觀察時，我們確實會逐季度地看到業務內部有哪些資本需求的機會，我們在業務之外的戰略上看到了哪些機會，無論是頭銜、風險投資還是其他機會他們應該出現嗎？坦率地說，股票交易在哪裡，對嗎？因此，我們的觀點是，購買低於賬面價值的股票會增加每股賬面價值的增長，這對我們來說非常重要。我們只是想——我們在 KBE 指數交易的季度看到了機會，顯然，該指數以銀行為主。

And we felt we got caught up in that and we thought it was a good opportunity to really to get the stock at attractive prices. Normally, that hasn't been our course of business. But again, just given -- again, just that's the strength of the operating cash flow. We have -- we're afforded that kind of luxury, so to speak, to kind of to invest across that, right? So whether it's dividend repurchases in the new business, I think the -- with the repurchases, that's another kind of really, I would say, another kind of tool in the toolbox that we'll look more strategically and really within kind of the normal course of business.

我們覺得我們陷入了困境，我們認為這是一個真正以有吸引力的價格購買股票的好機會。通常，這不是我們的業務方針。但再次強調，這就是運營現金流的實力。可以說，我們擁有那種奢侈的投資方式，對吧？因此，無論是新業務中的股息回購，我認為，通過回購，這實際上是工具箱中的另一種工具，我們將更具戰略性、真正處於正常狀態。業務過程。

So just like we analyze pricing and how much business we -- and how much we want to invest in the core business, this is going to be another thing that we'll look at. Special dividends is always as another tool. We haven't used that yet. But again, we're always going to look ways to grow book value per share. And obviously, we want to maximize shareholder returns.

因此，就像我們分析定價和我們的業務量以及我們希望在核心業務上投資多少一樣，這將是我們要考慮的另一件事。特別股息始終是另一種工具。我們還沒有使用過它。但同樣，我們總是會尋找增加每股賬面價值的方法。顯然，我們希望股東回報最大化。

That's really helpful. You mentioned Essent Ventures, and that's something that you talked about in the past as being a source of sort of incremental data and getting some useful information from those companies where you've provided some capital. Obviously, you've got a big -- a bigger transaction coming up. But just in terms of the current ventures portfolio, what sort of interesting data points are you guys paying attention to right now? Anything worth noting that you're seeing trending in those companies?

這真的很有幫助。您提到了 Essent Ventures，您過去曾將其視為增量數據的來源，並從您提供了一些資本的公司中獲取一些有用的信息。顯然，您即將進行一項更大的交易。但就目前的風險投資組合而言，你們現在關注哪些有趣的數據點？您在這些公司中看到了哪些值得注意的趨勢？

Yes. No, in terms of the companies, the direct investments, remember, that's relatively small. We get a lot more of our information from the funds. And there, both on the venture side and some of the couple of private equity. We're seeing clearly valuations. I think kind of that bubble has finally started to burst around ventures. So you're starting to see a much more realistic approach to valuations and really more focus we're seeing within the funds and the operating companies on getting to profitability, which shocking, is actually the goal all along. But it got to be just kind of chasing revenue and chasing exits as we like to see -- say, kind of do that '19 to '22 bubble. And it's coming down back to reality, which is good for us.

是的。不，就公司而言，直接投資，記住，相對較小。我們從基金中獲得了更多信息。在那裡，無論是在風險投資方面還是在一些私募股權方面。我們清楚地看到估值。我認為風險投資的泡沫終於開始破裂了。因此，你開始看到一種更加現實的估值方法，我們在基金和運營公司中看到更加註重實現盈利，這實際上是我們一直以來的目標，這令人震驚。但正如我們所希望看到的那樣，它必須只是追逐收入和追逐退出——比如說，有點像“19 至 22 年的泡沫”。它正在回歸現實，這對我們有好處。

So we're seeing much more discipline around kind of what's -- where the funds are going to invest in. In terms of opportunities, we're -- I think there, it's a matter of we're starting to look a little bit about, investing a little bit outside, looking at a few new funds to kind of look for some emerging kind of technologies and to see potentially how they can be used within kind of the core business and other uses within financial services.

因此，我們看到圍繞基金投資的領域有更多的紀律。就機會而言，我認為，問題是我們開始考慮一點進行一些外部投資，關註一些新基金，尋找一些新興技術，並了解如何將它們用於核心業務和金融服務中的其他用途。

Your next question comes from the line of Doug Harter with Credit Suisse.

您的下一個問題來自瑞士信貸銀行的道格·哈特 (Doug Harter)。

Mark, hoping you could talk a little bit about the reinsurance market, kind of how XOL pricing is faring and kind of -- and how that is relative to where you think ILNs would execute right now?

馬克，希望您能談談再保險市場，XOL 定價的運作方式以及它與您認為 ILN 目前執行的情況有何關係？

Yes. I mean, I think we -- in terms of kind of looking at the market, the XOL still probably trade a little bit more efficiently, and ILN, no one's in the market so it's hard to tell what the ILN pricing is. I mean, it's been May now and I don't believe in MI has issued an ILN. I think from our standpoint, Doug, just big picture, we're going to continue to diversify capital sources. We're -- for reinsurance, our house view is it's much more important to have the sustainability and availability of reinsurance and so much the price of an individual deal. And I know that it's not necessarily how others view it, which is fine. But it's very important to us if you think longer term, that availability of reinsurance is a really important part of our capital structure and it's really our leverage, right? That's why we don't have a lot of leverage at the Holdco.

是的。我的意思是，我認為我們——從市場角度來看，XOL 的交易效率可能仍然更高一些，而 ILN，市場上沒有人，所以很難判斷 ILN 的定價是多少。我的意思是，現在已經是五月了，我不相信 MI 已經發布了 ILN。我認為，從我們的角度來看，道格，從大局來看，我們將繼續實現資本來源多元化。對於再保險，我們的觀點是，再保險的可持續性和可用性以及單個交易的價格更為重要。我知道這不一定是其他人如何看待它，這很好。但如果你從長遠來看，再保險的可用性是我們資本結構的一個非常重要的組成部分，而且它確實是我們的槓桿，這對我們來說非常重要，對吧？這就是為什麼我們在控股公司沒有太多的槓桿作用。

We really kind of -- we think of reinsurance more as kind of leverage, and having dry powder at the Holdco really helps us. It really will aid us if there is some type of dislocation in the reinsurance market. There really hasn't been to date -- which I think is encouraging, it's our sixth year now of being in the reinsurance market. And it's really been tested twice, right? It got tested during COVID, where it shut down on the ILN side but then picked up. And I know they were XOL and quota share deals done that year. I thought last year was actually a bigger test. You're talking about rates going -- mortgage rates going from 3 to 6, incredible volatility amongst rates, which caused spreads to blow out. Just the whole media attraction to high HPA, and that's going to cause the housing market to crash and it's going to hurt the MIs, all that kind of old, I call it, dated kind of views on the industry going back to kind of the GSE.

我們確實認為再保險更像是一種槓桿，而持有公司的干粉確實對我們有幫助。如果再保險市場出現某種類型的混亂，這確實會對我們有所幫助。迄今為止確實還沒有——我認為這令人鼓舞，這是我們進入再保險市場的第六個年頭。而且確實已經測試過兩次了，對吧？它在新冠疫情期間接受了測試，在 ILN 一側關閉，但隨後又恢復。我知道那一年完成的是 XOL 和配額份額交易。我認為去年實際上是一個更大的考驗。你談論的是利率——抵押貸款利率從 3 升至 6，利率之間令人難以置信的波動，導致利差急劇擴大。只是整個媒體對高 HPA 的吸引力，這將導致房地產市場崩潰，並會傷害 MI，所有那些我稱之為過時的對該行業的看法可以追溯到地質安全工程師。

And yet, ILNs got issued, XOLs were -- we did an ILN, we did an XOL and we did a quota share, albeit it's a little bit higher pricing. But in the grand scheme of things, Doug, really not that -- if you average out all the pricing we've done over the last 5 or 6 years, it wasn't really that meaningful. So again, I think it's more around the permanence of it and the availability. And I think as we get to 8, 9, 10 years of reinsurance, that's also going to impact how we view cash at the Holdco, right, when we talked about, I think, last quarter doing -- running different scenarios. I think we talked about it a little bit in the script today. We run kind of mild, moderate GSC type scenario across our portfolio every quarter. And some of that as you get out to, whether it's modern or GSC, you really have to kind of test and see what your capital structure looks like without reinsurance. It's just you have to because you're not sure the availability of it.

然而，ILN 被發行了，XOL 被發行了——我們做了 ILN，我們做了 XOL，我們做了配額份額，儘管它的定價有點高。但道格，從長遠來看，事實並非如此——如果你將我們過去 5 或 6 年來所做的所有定價平均下來，那就沒有那麼有意義了。再說一次，我認為這更多的是圍繞它的持久性和可用性。我認為，當我們的再保險期限達到 8 年、9 年、10 年時，這也會影響我們對控股公司現金的看法，對吧，當我們談到上個季度的做法時——運行不同的場景。我想我們今天在劇本中對此進行了一些討論。我們每個季度都會在我們的投資組合中運行一種溫和、中等的 GSC 類型情景。當你接觸到其中的一些內容時，無論是現代的還是 GSC，你確實必須進行某種測試，看看在沒有再保險的情況下你的資本結構會是什麼樣子。只是您必須這樣做，因為您不確定它的可用性。

Again, it's our funding, right? It's our -- PMIERs is our liquidity type test. And if reinsurance is still kind of going strong the way it has 5 years from now, I think we'll have a little bit more reliability around that in our capital and stress models, which I think is really positive. So again, I don't get too caught up. Again, XOL is a little bit more efficient than ILN. We're not really going to jump between each one of them. We're going to try to utilize all 3. And we have really good partners on the reinsurance side both in XOL and on the quota share. And we have good partners on the ILN side. We have 4, 5 top investors that are pretty much in every one of their deals. And we want to make sure that they have kind of product that they can purchase from us.

再說一遍，這是我們的資金，對嗎？這是我們的——PMIER 是我們的流動性類型測試。如果再保險在 5 年後仍然像現在這樣強勁，我認為我們的資本和壓力模型將更加可靠，我認為這是非常積極的。再說一遍，我不會太著迷。同樣，XOL 比 ILN 更高效。我們不會真的在它們之間跳轉。我們將嘗試利用這三個方面。我們在 XOL 和配額份額方面的再保險方面都有非常好的合作夥伴。我們在ILN方面有很好的合作夥伴。我們有 4、5 位頂級投資者，他們幾乎參與了他們的每一筆交易。我們希望確保他們有可以從我們這裡購買的產品。

I guess on the ILN, I mean, you're the only 1 that's kind of committed to kind of keeping that capital source open. Can it or does it dry up? Do you need kind of others to kind of support it as well? Just how do you think about that from a viewpoint?

我想在 ILN 上，我的意思是，你是唯一一個致力於保持資金來源開放的人。它會幹嗎？或者它會幹嗎？您還需要其他人來支持嗎？您從一個角度如何看待這個問題？

Yes, I think it's always better to have more issuers. But remember, we have the GSEs, right? The GSEs, they're really the ones who pave the way for the MIs. And I think there's given in terms of the technical aspects of the islands, probably a little bit better value from an investor standpoint. So again, some of the sharper guys realize that. So we don't anticipate that being an issue. And I don't know -- just because we're committed to it. I'm not sure how the other MIs think about it. But everyone's been pretty active in it over time. We'll see what happens this year. But again, I think we very much would anticipate being in the market for an ILN in the latter half of the year.

是的，我認為有更多的發行人總是更好。但請記住，我們有 GSE，對吧？ GSE 確實是為 MI 鋪平道路的人。我認為從投資者的角度來看，這些島嶼的技術方面可能具有更好的價值。一些更敏銳的人再次意識到了這一點。所以我們預計這不會成為問題。我不知道——只是因為我們致力於此。我不確定其他 MI 對此有何看法。但隨著時間的推移，每個人都非常活躍。我們將看看今年會發生什麼。但同樣，我認為我們非常希望在今年下半年進入 ILN 市場。

Your next question comes from the line of Roland Mayer with RBC Capital Markets.

您的下一個問題來自加拿大皇家銀行資本市場部的羅蘭·梅耶爾 (Roland Mayer)。

I think on the Essent Re, you commented a run rate of about $70 million of revenues for the year. Is that just a premium number? Or is there seasonality in that we should consider? Anything else on that would be great.

我想在 Essent Re 上，您評論了今年收入約為 7000 萬美元的運行率。這只是一個高級號碼嗎？或者我們應該考慮季節性因素嗎？任何其他的都很棒。

Yes. I mean, if you really kind of -- Essent Re, it's in the investor deck. It's really 3 lines of business. It's the affiliate quota share, right, which is kind of the gift that keeps giving for Essent Re. But they also have a third-party business, both in terms of mainly taking on risk share from the GSEs and their MGA business. So the premium is really coming from the GSE-type business, the third-party premium. But they also get investment income. We have to hold cash in the trust so that the absolute -- if we were going to kind of show you a P&L just for Essent Re, would be a bit higher than the 70 for sure.

是的。我的意思是，如果你真的喜歡——Essent Re，它就在投資者的平台上。這實際上是 3 條業務線。這就是聯營公司配額份額，對吧，這是 Essent Re 不斷贈送的禮物。但他們也有第三方業務，主要是承擔 GSE 的風險分擔和 MGA 業務。因此，溢價實際上來自 GSE 類型的業務，即第三方溢價。但他們也獲得投資收益。我們必須在信託中持有現金，這樣，如果我們只向您展示 Essent Re 的損益表，那麼絕對值肯定會比 70 稍高一些。

That's helpful. Anything on the market dynamics...

這很有幫助。市場動態有什麼...

I'm sorry, and just taking a step back with it. I mean, it's relatively -- the math is actually relatively simple. It's $2 billion of risk in force as a third party, assume we earn 3 points on it, And the rest of that is coming from a lot of the fee income from MGA. So it really is how can we grow that $2 billion. It's not really that easy. It's dependent on kind of the GSEs. I would -- one comment that's interesting is if you combine our market share between the principal that we take -- principal risk that we take with the GSEs and the MGAs were shockingly like 15%, 16% share. So we're a nice part of that market and we're really contingent on that market growing longer term. So can that 2 go to 5? Not likely at all, right? 2 going to 3, more likely.

抱歉，我只是退後一步。我的意思是，它是相對的——數學實際上相對簡單。作為第三方，它的風險為 20 億美元，假設我們從中賺取 3 個積分，其餘部分來自 MGA 的大量費用收入。所以真正的問題是我們如何才能增加這 20 億美元。這真的沒那麼容易。這取決於 GSE 的類型。我想——一個有趣的評論是，如果你把我們承擔的本金之間的市場份額結合起來——我們在 GSE 和 MGA 上承擔的主要風險令人震驚地達到 15%、16% 的份額。因此，我們是該市場的重要組成部分，並且我們確實取決於該市場的長期增長。那麼2可以變成5嗎？根本不可能，對吧？ 2到3的可能性更大。

And then we'd have to go outside of kind of just the GSE business. We do some business in Australia with some of the MIs there. It's relatively small. So I would say it's a relatively contained kind of growth story, so to speak, very profitable and not really looking to grow. It's really -- when you think about Essent Re, it's been a nice addition to the franchise. We're fortunate. We started it. We have a great team there. And it gives us really just the tax efficiency of the quota share also just with the premiums, it's another way to get capital to the Holdco very efficiently. So it's been -- all in, when you can combine all of kind of the strengths, it's a real -- it's a key part of the franchise.

然後我們就必須超越 GSE 業務。我們在澳大利亞與那裡的一些管理機構開展一些業務。它相對較小。所以我想說，這是一個相對封閉的增長故事，可以說，非常有利可圖，而且並不真正尋求增長。當你想到 Essent Re 時，它確實是該系列的一個很好的補充。我們很幸運。我們開始了。我們那裡有一支很棒的團隊。它確實為我們提供了配額份額的稅收效率以及溢價，這是非常有效地向控股公司提供資本的另一種方式。所以，總而言之，當你能夠結合所有的優勢時，它就是真正的——它是該系列的關鍵部分。

No, that's very helpful. Covered most of the second half of my question. Where are the sort of returns on that business right now? And where do you expect them to be sort of long term?

不，這非常有幫助。涵蓋了我問題後半部分的大部分內容。目前該業務的回報情況如何？從長遠來看，您預計它們會怎樣？

Yes. I would say on a collateral basis, and we're held to a little bit higher level than maybe the typical reinsurer. They're in that 12% to 15% range, probably 12% to 15%, ebbs and flows there. I would say on an economic capital basis, though, they're probably in the 15% to 20% range. So we look at it more because we hold the capital and the trust. That's the real capital. And if we were able to kind of do economic, it would be higher. So it's pretty good. And that's -- we talked about it earlier. We talked about ventures. It's really the same thing. We kind of have that 12% to 15% target across all the businesses that we're investing in.

是的。我想說的是，在抵押品的基礎上，我們的水平可能比典型的再保險公司高一點。它們在 12% 到 15% 的範圍內，可能是 12% 到 15%，在那裡起伏。不過，我想說的是，以經濟資本為基礎，它們可能在 15% 到 20% 的範圍內。所以我們更多地關注它，因為我們擁有資本和信任。這才是真正的資本。如果我們能夠做一些經濟方面的事情，那就會更高。所以這還不錯。那就是——我們之前討論過。我們談論了風險投資。這確實是同一件事。我們對我們投資的所有業務都有 12% 到 15% 的目標。

Your next question comes from the line of Eric Hagen with BTIG. .

您的下一個問題來自 BTIG 的 Eric Hagen。 。

Maybe pulling on the pricing thread a little bit more. You mentioned we're back at 2019 levels, But when we compare interest rate volatility to that period and its impact on pricing, how do you feel like we shake out there? And to that point, we typically see higher rate volatility and wider spreads driving higher mortgage rates in the primary market. But can you really say the same connectivity exists for pricing for MI?

或許可以在定價方面多加一些關注。您提到我們回到了 2019 年的水平，但是當我們將利率波動性與該時期及其對定價的影響進行比較時，您覺得我們的表現如何？到那時，我們通常會看到更高的利率波動性和更大的利差會推動一級市場抵押貸款利率上升。但你真的能說 MI 的定價存在相同的連接嗎？

No, not really. I mean, I think it's a little bit apples and oranges, right? I mean, I know you're coming at -- given your background, you're coming at a much more from an MBS-type perspective, much more interest rate driven. Again, we're really credit-driven. So there's an interest rate component to our pricing, right? That's how we think about duration. But it's relatively stable. It doesn't really kind of jerk around based on interest rates. So again, I think it's more of our credit views. And if you compare just again throughout 2019 pricing, the returns today are probably higher, though -- even though the pricing is relatively flat.

不，不是真的。我的意思是，我認為這有點像蘋果和橘子，對吧？我的意思是，我知道你的觀點——考慮到你的背景，你的觀點更多地是從MBS類型的角度來看，更多地是由利率驅動的。再說一遍，我們確實是信用驅動的。那麼我們的定價包含利率成分，對吧？這就是我們對持續時間的看法。但相對穩定。它實際上並沒有根據利率而波動。再說一遍，我認為這更多的是我們的信用觀點。如果你再次比較 2019 年的定價，你會發現今天的回報可能更高——儘管定價相對持平。

And remember, '19 -- just to remind everyone, that the '19 is really kind of coming after the industry lower pricing kind of following up to the reduction in taxes. So if you look at pricing '19 to today, to the lower tax rate today, right? The corporate tax rate went down. We have higher investment yields today. And clearly, the addition of kind of the credit risk transfer. So most of the book wasn't even reinsured. So when you think about we're putting $1 to work today at similar pricing in '19, the unit economics -- in terms of the predictability of the unit economics, right? And that's where the reinsurance has played such a key part, as I would think, stronger today than it was 4 or 5 years ago.

請記住，“19”——只是為了提醒大家，“19”實際上是在行業降低價格、跟隨減稅之後到來的。因此，如果你看看 19 年至今的定價，今天的稅率較低，對嗎？企業稅率下降。今天我們的投資收益率更高。並明確，增加了信用風險轉移的種類。所以這本書的大部分內容甚至沒有再保險。因此，當你想到我們今天以 19 年類似的價格投入 1 美元時，單位經濟學——就單位經濟學的可預測性而言，對嗎？正如我所認為的，再保險在這方面發揮瞭如此關鍵的作用，今天比四五年前更強大。

Yes. That's helpful. Maybe I could sneak in one more here. I mean, how are you thinking about the time line to foreclosure or liquidation in this environment? Do you feel like that's changed meaningfully? And to the extent that it has changed, does that show up as a driver for pricing in the reinsurance market?

是的。這很有幫助。或許我可以再偷偷溜進去一趟。我的意思是，在這種環境下，您如何考慮取消抵押品贖回權或清算的時間表？你覺得這樣的改變有意義嗎？就其變化而言，這是否會成為再保險市場定價的驅動因素？

I'm not sure, in the reinsurance market it may, right? You'd have to ask the reinsurers for that. I think for us, it's not so much a driver yet, right? I mean, clearly, forbearance is another one, and I mentioned it earlier in the call around some of the kind of key macro changes to the business, right, in terms of the GSEs, QM, their QC work, the strengthening of DU and LP. Forbearance is really another tool that protects the borrower. And it's historic. And if you go back and again look at history, post crisis, you had HAMP and HARP. And a lot of those programs were kind of cleaning up the milk after it already spilled on the floor. And I think with forbearance, which has always been a tool around -- with hurricanes and some of those other type of events, was really a COVID -- the GSEs very quickly, and I commend them for this, they came out very quickly with forbearance during the COVID time period.

我不確定，在再保險市場可能是這樣，對吧？你必須向再保險公司詢問這一點。我認為對我們來說，它還不是一個司機，對吧？我的意思是，顯然，寬容是另一回事，我之前在電話會議中提到了這一點，圍繞著業務的一些關鍵宏觀變化，對吧，就 GSE、質量管理、質量控制工作、加強 DU 和LP。寬容實際上是保護借款人的另一種工具。這是歷史性的。如果你回顧一下歷史，危機過後，你會發現 HAMP 和 HARP。很多這樣的程序都是在牛奶灑在地板上後清理它。我認為，寬容一直是一種工具，在颶風和其他一些類型的事件中，確實是一種新冠病毒，GSE 很快就出來了，我對此表示讚揚，他們很快就出來了新冠疫情期間的寬容。

And it makes sense, right? "Eric, you're not allowed to go to work for 3 months." The last thing you need to do is get a foreclosure notice. It doesn't do anyone good, and this is higher level, doesn't do anyone any good to kick a family out of the house. It just doesn't. It's not good economically. for mortgage insurers or servicers or the government or clearly from a social perspective with family. So coming up with new and innovative tools to keep borrowers in their homes is just good for everyone. And I think we saw that with COVID and I think with the new forbearance rule that my guess will come down with us, which is you have to have right party contact and you get a 6-month forbearance and then potentially another 6 months. That really gives borrowers a chance to get on their feet. And so yes, to answer your question, that will delay the foreclosure time line.

這是有道理的，對吧？ “Eric，你三個月內不能上班。”您需要做的最後一件事就是獲得止贖通知。這對任何人都沒有好處，而且這是更高層次的，將一個家庭趕出家門對任何人都沒有任何好處。事實並非如此。經濟上不太好。對於抵押貸款保險公司或服務商或政府，或者顯然從家庭的社會角度來看。因此，提出新的創新工具來讓借款人留在家中對每個人都有好處。我認為我們在新冠肺炎疫情中看到了這一點，我認為根據新的寬容規則，我的猜測將會是我們，那就是你必須有正確的政黨聯繫，你會得到 6 個月的寬容，然後可能還有 6 個月。這確實給借款人一個重新站起來的機會。所以，是的，回答你的問題，這將延遲取消抵押品贖回權的時間。

So I think that changes some other businesses that rely on things like foreclosures. I'm not sure it's ever going to go back to the way it was. It's kind of like very similar to postcrisis, everyone thought the ABS market around subprime mortgage and all would come back. And I mean, there's no way we thought it would come back. That ship had kind of sailed and the GSEs are really the only game in town, which is good because you need that type of standardization around mortgage origination.

所以我認為這會改變一些其他依賴止贖等措施的企業。我不確定它是否會回到原來的樣子。這有點像後危機時期，每個人都認為圍繞次級抵押貸款的 ABS 市場將會回歸。我的意思是，我們不可能認為它會回來。那艘船已經航行了，GSE 實際上是城裡唯一的遊戲，這很好，因為你需要圍繞抵押貸款發放進行這種類型的標準化。

And I think with forbearance, I think it's going to change -- I think you're going to see more -- again, more folks stay in their homes. And Eric, if you think about it from the Essent standpoint, right, we take first loss risk, we hedge out most of the mezz piece. Our biggest risk in the company is reattaching above that, right? That's our ultimate (inaudible) that we have to hold capital for. And if you think of a borrower staying in their home longer, that lowers our expected loss, maybe not a lot, certainly helps our reinsurers, right? I think if you're in the mezz protection, if you're providing that mezz protection and there's the ability for the first loss to not penetrate that, that helps -- clearly helps the (inaudible), right?

我認為只要保持忍耐，我認為情況將會改變——我想你會看到更多——再次，更多的人呆在家裡。埃里克，如果你從本質的角度考慮，對吧，我們首先承擔損失風險，我們對沖大部分中間部分。我們公司最大的風險就是重新連接，對嗎？這是我們必須持有資本的終極目標（聽不清）。如果你認為藉款人在家裡停留的時間更長，這會降低我們的預期損失，也許不會很多，肯定會幫助我們的再保險公司，對嗎？我認為，如果你處於夾層保護中，如果你提供了夾層保護，並且第一次損失有能力不穿透它，這會有所幫助 - 顯然有幫助（聽不清），對嗎？

So I think if you -- when people -- we had a comment, and I think I brought it at once but just if you mind repeating, we were at an investor conference in May of last year. And some larger investor asked us how -- why we didn't think we were going to go out of business, which again just shows you how little some folks know. Because again, we're -- folks on the phone, the companies in the industry, we know this business cold. But the typical portfolio manager reverts back to kind of a recency bias. And if you're looking at the MIs of 2023 and comparing them to the MIs of 2007. Well, that's probably not the proper analysis. And again, big picture, and you would understand this, because the way you cover industry, we're a company now -- and there's issues in the economy, right? There's issues clearly around the banking system. There's issues around commercial finance. You're starting to hear that come up. Residential is probably one of the best places to be, right? And we're sitting here with a portfolio that's 95% GSE-backed, embedded home equity mark-to-market of $75 million. 80% of our book is below 5%. So it's -- 60% is below 4. I mean it's a good place to be from an investor standpoint. That's why we're encouraged. Clearly, again, there's uncertainty, but I think from a -- relatively, just from our position in the market today, we're feeling pretty good about it.

所以我想如果你們——當人們——我們有一個評論，我想我立即提出了它，但如果你介意重複一遍，我們去年五月參加了一次投資者會議。一些較大的投資者問我們如何——為什麼我們不認為我們會倒閉，這再次表明有些人知之甚少。因為我們——電話裡的人、業內的公司，我們對這個行業瞭如指掌。但典型的投資組合經理又會回歸到某種新近度偏見。如果您查看 2023 年的 MI 並將其與 2007 年的 MI 進行比較。那麼，這可能不是正確的分析。再說一次，從大局來看，你會理解這一點，因為按照你報導行業的方式，我們現在是一家公司——經濟中存在問題，對嗎？銀行系統顯然存在問題。商業金融存在問題。你開始聽到這個問題出現了。住宅可能是最好的地方之一，對吧？我們坐在這裡的投資組合有 95% 由 GSE 支持，嵌入式房屋淨值按市值計算為 7500 萬美元。我們書中 80% 的內容低於 5%。所以，60% 低於 4。我的意思是，從投資者的角度來看，這是一個好地方。這就是為什麼我們受到鼓勵。顯然，再次存在不確定性，但我認為，相對而言，僅從我們今天在市場上的地位來看，我們對此感覺非常好。

Your next question is a follow-up from Geoffrey Dunn of Dowling & Partners.

您的下一個問題是 Dowling & Partners 的杰弗裡·鄧恩 (Geoffrey Dunn) 提出的後續問題。

I just wanted to ask given the reinsurance conversations. The last year, the ILN market grew out and then we kind of gradually saw the traditional reinsurance market adopt changes and basically increased pricing. As things may improve, the pricing is up on the primary side, returns are up, how long does it take for that information to trickle through on your reinsurance negotiations and the reinsurance pricing? I assume it's better than it used to be given greater education. Just curious if you could update us on that.

我只是想問一下再保險方面的對話。去年，ILN市場開始發展，然後我們逐漸看到傳統再保險市場發生變化，定價基本提高。隨著情況可能有所改善，主要方面的定價上升，回報上升，這些信息需要多長時間才能滲透到您的再保險談判和再保險定價中？我認為這比以前接受更好的教育要好。只是好奇您能否向我們通報最新情況。

And you're thinking about the quota share?

您正在考慮配額份額嗎？

I'm thinking about quota share but I'm also just thinking in terms of XOL, everything. If the underwriting is tighter, maybe their loss assumptions aren't as bad and XOL terms come in a little bit. Just in general, if the primary side is in a better place today, how long does that take to necessarily be reflected in the reinsurance mindset?

我正在考慮配額份額，但我也只是考慮 XOL，一切。如果承保更嚴格，也許他們的損失假設不會那麼糟糕，並且 XOL 條款會出現一點。總的來說，如果現在主要方的情況更好，那麼需要多長時間才能反映在再保險的心態中？

Yes. Let me start, and I'll turn it over to Chris because he may have some of the thoughts. I think it's very helpful on the quota share side, right, because we're -- you're literally taking a slice of our book. And there was pressure from the reinsurers over the past, again, 12-plus months ago, they saw the same thing. I mean, they see better pricing than any of the markets, right? So they were pushing on a lot of the MIs. And maybe that's another reason that pricing has come up. So it should be -- we should be able to negotiate better quota share treaties going forward given the pricing.

是的。讓我開始吧，我會把它交給克里斯，因為他可能有一些想法。我認為這在配額份額方面非常有幫助，對吧，因為我們——你實際上是在分享我們的書。過去，再保險公司也面臨著壓力，12 個多月前，他們也看到了同樣的情況。我的意思是，他們看到的定價比任何市場都更好，對吧？所以他們正在推動很多MI。也許這是定價上漲的另一個原因。因此，考慮到定價，我們應該能夠在未來談判出更好的配額份額條約。

I'm not sure they care so much on the XOL or ION side given that they're kind of really taking credit risk and don't really get compensated for how we charge. And even -- before I turn it over to Chris, Geoff, the spreads blew out on the ILN side, but you're talking like a 1 basis point increase, I mean, in terms of just kind of -- we always boiled down to premium rates. And whether it's 4% to 5%, it kind of probably got to 6% last year on one of our ILN deals. But kind of big picture, I think that's -- we think that's a small price to pay to keep the sustainability of that open to (inaudible).

我不確定他們是否如此關心 XOL 或 ION 方面，因為他們確實承擔了信用風險，並且並沒有真正因我們的收費方式而得到補償。甚至 - 在我把它交給克里斯、傑夫之前，ILN方面的利差已經大幅擴大，但你說的是增加了1個基點，我的意思是，就某種程度而言 - 我們總是歸結為至溢價。無論是 4% 到 5%，去年我們的一項 ILN 交易可能達到了 6%。但我認為，從大局來看，我們認為，為了保持開放的可持續性（聽不清），這是一個很小的代價。

Jeff, it's Chris. Just to add to that. Certainly, from a reinsurer perspective, our relationships are extremely strong. And as far as the interest in the quota share, it continues to be high. Certainly now with some of the primary business kind of repricing to the upside, I think from a reinsurance perspective, certainly, they'll see that. And I think the interest will continue. Even when you just kind of take a step back and you look at the overall credit environment and certainly where the portfolio is with regards to defaults and claims, still very, very low, still relatively benign. But from a reinsurer perspective, there's a demand there. And certainly, we value those relationships. And certainly, they should benefit certainly with some of the tailwinds that are going on in the MI business.

傑夫，是克里斯。只是補充一下。當然，從再保險公司的角度來看，我們的關係非常牢固。就配額份額而言，人們的興趣仍然很高。當然，現在隨著一些主要業務的重新定價上漲，我認為從再保險的角度來看，他們肯定會看到這一點。我認為這種興趣將會持續下去。即使你退後一步，看看整體信貸環境，當然還有投資組合在違約和索賠方面的情況，仍然非常非常低，仍然相對良性。但從再保險公司的角度來看，存在需求。當然，我們重視這些關係。當然，他們肯定會受益於 MI 業務中正在發生的一些順風車。

Yes. And just to add to that, Jeff, just from a valuation standpoint, if you look at some of the large reinsurers there, I mean, their investment performance has been outstanding over the last 6 to 12 months. A lot of that, the credit is clearly around the hardening of their core business. If you peer between the lines, mortgage insurance is a big part of their premiums. And so they were awarded a much higher kind of multiple for their insurance premiums than kind of -- than the originators of the product, so to speak. So I'm not quite sure. To me, it's a little bit upside down, but it just gives you a sense that there's clearly a dichotomy in how investors are viewing the valuation of insurance premium cash flows. And they're being valued much higher for the reinsurers than they are for the primaries, which I think is, again, over time, those things tend to settle, tend to even out.

是的。 Jeff，補充一點，從估值的角度來看，如果你看看那裡的一些大型再保險公司，我的意思是，他們的投資業績在過去 6 到 12 個月中一直表現出色。其中很多功勞顯然是圍繞其核心業務的強化而實現的。如果你仔細觀察的話，就會發現抵押貸款保險是他們保費的很大一部分。因此，可以這麼說，他們獲得的保險費比產品的創始人高得多。所以我不太確定。對我來說，這有點顛倒，但它只是讓你感覺到投資者對保險費現金流估值的看法顯然存在二分法。再保險公司的估值比初選的估值要高得多，我認為，隨著時間的推移，這些事情往往會解決，趨於平衡。

There are no further questions at this time. I will turn the call back to the management team.

目前沒有其他問題。我會將電話轉回給管理團隊。

Okay. Well, thanks, everyone. Good questions today. Good discussion and have a great weekend.

好的。嗯，謝謝大家。今天的問題問得好。很好的討論，祝週末愉快。

This concludes today's conference.

今天的會議到此結束。