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Losses and LAE (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Reserve for Losses and LAE by Segment

Our reserve for losses and LAE consisted of the following as of the dates indicated.


Reserve for losses and LAE



	December 31,
(In thousands)	2024		2023


Primary case	$	336,553	$	344,235
Primary IBNR and LAE		13,399		12,177
Pool and other		4,479		8,511
Mortgage insurance		354,431		364,923
Title insurance		5,895		5,225
Total reserve for losses and LAE	$	360,326	$	370,148

Schedule of Provision for Losses

Provision for losses consisted of the following.


Provision for losses


	Years Ended December 31,

(In thousands)	2024			2023			2022


Mortgage insurance	$	(2,248	)	$	(42,136	)	$	(339,374	)
Title insurance		(266	)		(390	)		1,135
Total provision for losses	$	(2,514	)	$	(42,526	)	$	(338,239	)

Schedule of Mortgage Insurance Reserve for Losses and LAE Rollforward

For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE.


Rollforward of mortgage insurance reserve for losses


	Years Ended December 31,

(In thousands)	2024			2023			2022


Balance at beginning of year	$	364,923		$	420,955		$	823,136
Less: Reinsurance recoverables (1)		25,074			24,727			66,676
Balance at beginning of year, net of reinsurance recoverables		339,849			396,228			756,460
Add: Losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)		197,719			178,665			160,049
Prior years		(199,967	)		(220,801	)		(499,423	)
Total incurred		(2,248	)		(42,136	)		(339,374	)
Deduct: Paid claims and LAE related to:
Current year (2)		1,118			246			499
Prior years		16,196			13,997			20,359
Total paid		17,314			14,243			20,858
Balance at end of year, net of reinsurance recoverables		320,287			339,849			396,228
Add: Reinsurance recoverables (1)		34,144			25,074			24,727
Balance at end of year	$	354,431		$	364,923		$	420,955

(1)

Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information.

(2)

Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.

Schedule of Default to Claim Rates on Primary Portfolio

The following table shows our gross Default to Claim Rates on our primary portfolio based on the Time in Default and as of the dates indicated.


Default to Claim Rates

	December 31,
	2024			2023			2022

Default to Claim Rate on:
New defaults		7.5	%		8.0	%		8.0	%
Defaults not in Foreclosure Stage
Time in Default: < 2 years (1)		20.2	%		21.0	%		21.8	%
Time in Default: 2 - 5 years		45.0	%		55.0	%		65.0	%
Time in Default: > 5 years		50.0	%		60.0	%		70.0	%
Foreclosure Stage Defaults		55.0	%		65.0	%		75.0	%

(1)

Represents the weighted average Default to Claim Rate for all defaults not in foreclosure stage that have been in default for up to two years, including new defaults. The estimated Default to Claim Rates applied to defaults within this population vary by Time in Default, and range from the Default to Claim Rates on new defaults shown above, up to 42.7%, 50.0% and 55.0% for more aged defaults in this category as of December 31, 2024, 2023 and 2022, respectively.

Schedule of Net Incurred Losses and Paid Claims Development

The information about net incurred losses and paid claims development for the years ended prior to 2024 is presented as supplementary information.


Incurred losses, net of reinsurance

($ in thousands)					Years Ended December 31,																Total of IBNR Liabilities Plus Expected Development on Reported		Cumulative Number of Reported
	Unaudited																				Claims (1)		Defaults (2)
Default Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024		As of December 31, 2024
2015	$	222,555	$	198,186	$	178,042	$	183,952	$	183,546	$	184,066	$	182,647	$	180,435	$	179,344	$	178,738	$	2		42,607
2016				201,016		165,440		149,753		148,811		148,640		148,349		145,267		142,521		140,962		2		40,503
2017						180,851		151,802		133,357		130,274		126,989		122,407		118,033		115,317		3		42,888
2018								131,513		116,634		95,534		88,252		75,262		70,145		66,583		5		37,369
2019										143,475		136,860		109,416		66,466		51,053		43,818		9		40,985
2020												504,160		408,809		87,213		39,584		27,266		14		108,025
2021														156,328		72,475		23,308		11,974		11		37,470
2022																155,908		71,300		24,044		32		37,738
2023																		173,076		75,762		—		44,007
2024																				190,355		1,734		50,535
Total																			$	874,819

(1)

Represents reserves as of December 31, 2024, related to IBNR liabilities.

(2)

Represents total number of new primary default notices received in each calendar year as compiled monthly based on reports received from loan servicers. As reflected in our Default to Claim Rate assumptions, a significant portion of reported defaults generally do not result in a claim. In certain instances, a defaulted loan may cure, and then re-default in a later period. Consistent with our reserving practice, each new event of default is treated as a unique occurrence and therefore certain loans that cure and re-default may be included as a reported default in multiple periods.


Cumulative paid claims, net of reinsurance

(In thousands)					Years Ended December 31,
	Unaudited

Default Year	2015		2016		2017		2018		2019		2020		2021		2022		2023		2024

2015	$	10,479	$	84,271	$	142,421	$	163,916	$	172,645	$	174,812	$	175,874	$	176,823	$	177,237	$	177,883
2016				11,061		76,616		119,357		134,115		137,306		138,525		139,539		139,651		139,937
2017						24,653		66,585		99,678		108,484		111,458		112,445		113,027		113,497
2018								5,584		36,066		54,625		60,926		62,968		63,603		64,015
2019										4,220		18,703		28,896		35,594		37,960		39,082
2020												4,148		9,867		14,635		17,884		19,465
2021														1,112		2,561		4,409		6,043
2022																498		2,867		6,699
2023																		246		6,201
2024																				1,118
Total																				573,940
All outstanding liabilities before 2015, net of reinsurance																				7,411
Liabilities for claims, net of reinsurance (1)																			$	308,290

(1)

Calculated as follows:


(In thousands)
Incurred losses, net of reinsurance	$	874,819
All outstanding liabilities before 2015, net of reinsurance		7,411
Cumulative paid claims, net of reinsurance		(573,940	)
Liabilities for claims, net of reinsurance	$	308,290

Schedule of Reconciliation of Net Incurred Losses and Paid Claims Development to Mortgage Insurance Reserve for Losses and Loss Adjustment Expenses

The following table provides a reconciliation of the net incurred losses and paid claims development tables above to the mortgage insurance reserve for losses and LAE at December 31, 2024.


Net outstanding liabilities - mortgage insurance

(In thousands)	December 31, 2024

Reserve for losses and LAE, net of reinsurance	$	308,290
Reinsurance recoverable on unpaid claims		34,144
Unallocated LAE		11,997
Total gross reserve for losses and LAE (1)	$	354,431

(1)

Excludes title insurance reserve for losses and LAE of $6 million.

Schedule of Historical Claims Duration

The following is supplementary information about average historical claims duration as of December 31, 2024, representing the average distribution of when claims are paid relative to the year of default.


Average annual percentage payout of incurred losses by age, net of reinsurance (unaudited)

Years	1	2	3	4	5	6	7	8	9	10
Mortgage insurance	8.1%	28.2%	23.9%	11.5%	4.0%	1.3%	0.6%	0.3%	0.2%	0.4%