MGIC Investment (MTG) Reports Robust November Business Data
Zacks Investment Research | Dec 10, 2017 08:49PM ET
MGIC Investment Corporation (NYSE:MTG) recently announced its November operating business statistics. Insurance in force for the month was $193.5 billion, up 6.7% year over year. Delinquency loans (loans that failed to pay back) at the company declined on a year-over-year basis. Delinquent inventory for the month under review decreased 6.5% year over year to 46,900 loans.
MGIC Investment was severely affected by the 2008 financial crisis. However, the company is steadily recovering on the back of declining delinquencies and improving cure rates on claims from its legacy business. The prospects of the company also look bright in terms of growing book of high-credit-quality business written since 2009.
Given the continued improvement in new business written, fueled by larger origination volume as well as a rise in the private mortgage insurance industry’s market share, the company anticipates to write approximately the same amount of new insurance as 2016. New business written and an expected increase in persistency are anticipated to grow MGIC Investment’s insurance in force for the remainder of 2017.
The company has been witnessing a decline in paid claims over a considerable period of time and the first nine months of 2017 were no exception. Hence, we expect paid claims to decrease further. Also, a decline in loss and claims will strengthen the company’s balance sheet and improve its financial profile.
MGIC Investment estimates the number of loans in delinquent inventory as well as claim rate applied to new delinquent notices to decline in 2017. Moreover, based on premium rate changes, the company anticipates the claim rate for new notices to be lower in the future quarters.
Zacks Rank and Share Price Movement
MGIC Investment sports a Zacks Rank #1 (Strong Buy). Shares of the company have soared 50.9% year to date, significantly outperforming the Original post
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