Losses and LAE

3 Months Ended

Mar. 31, 2025

11. Losses and LAE

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


Reserve for losses and LAE



(In thousands)	March 31, 2025		December 31, 2024


Primary case	$	347,996	$	336,553
Primary IBNR and LAE		13,827		13,399
Pool and other		7,267		4,479
Mortgage insurance		369,090		354,431
Title insurance		5,855		5,895
Total reserve for losses and LAE	$	374,945	$	360,326

Our provision for losses consists of the following for the periods indicated.


Provision for losses


	Three Months Ended March 31,

(In thousands)	2025			2024


Mortgage insurance	$	15,340		$	(6,886	)
Title insurance		(173	)		(148	)
Total provision for losses	$	15,167		$	(7,034	)

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


	Three Months Ended March 31,

(In thousands)	2025			2024


Balance at beginning of period	$	354,431		$	364,923
Less: Reinsurance recoverables (1)		34,144			25,074
Balance at beginning of period, net of reinsurance recoverables		320,287			339,849
Add: Losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)		53,740			53,688
Prior years		(38,400	)		(60,574	)
Total incurred		15,340			(6,886	)
Deduct: Paid claims and LAE related to:
Current year (2)		—			—
Prior years		4,233			3,387
Total paid		4,233			3,387
Balance at end of period, net of reinsurance recoverables		331,394			329,576
Add: Reinsurance recoverables (1)		37,696			27,097
Balance at end of period	$	369,090		$	356,673

(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.

Reserve Activity

Incurred Losses

Total incurred losses are driven by: (i) case reserves established for new default notices, which are primarily impacted by both the number of new primary default notices received in the period and our related gross Default to Claim Rate and Claim Severity assumptions applied to those new defaults and (ii) reserve developments on prior period defaults, which are primarily impacted by changes to our prior Default to Claim Rate and Claim Severity assumptions applied to these loans.

New primary default notices totaled 12,505 for the three months ended March 31, 2025, compared to 11,756 for the three months ended March 31, 2024, representing an increase of 6%. We believe this increase in new primary defaults is mainly due to the natural seasoning of our insured portfolio given the increase in our IIF in recent years and not the result of deteriorating credit performance of the insured portfolio.

Our gross Default to Claim Rate assumption applied to new defaults was 7.5% and 8.0% as of March 31, 2025, and March 31, 2024, respectively, based on our review of trends in Cures and claims paid for our default inventory and taking into consideration the risks and uncertainties associated with the current economic environment.

Our provision for losses during both of the first quarters of 2025 and 2024 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated. These Cures have been due primarily to favorable outcomes resulting from positive trends in home price appreciation, which has also contributed to a higher rate of claims that result in no ultimate loss to us and that are withdrawn by servicers as a result. These favorable observed trends for prior year default notices resulted in reductions in our Default to Claim Rate and other reserve assumptions in both of the first quarters of 2025 and 2024, including our Claim Severity assumptions in the 2024 period.

Claims Paid

Total claims paid were slightly higher for the three months ended March 31, 2025, compared to the same period in 2024.

For additional information about our Reserve for Losses and LAE, including our accounting policies, see Notes 2 and 11 of Notes to Consolidated Financial Statements in our 2024 Form 10-K.