Essent raises dividend after fourth-quarter earnings and strong cash return
Business Overview
Essent Group Ltd. (NYSE: ESNT) is a provider of private mortgage insurance, reinsurance, and title services focused on the US mortgage finance market. The company underwrites original, low-paying loans and supplements its mortgage insurance franchise with insurance business and title operations. Essent uses programmatic insurance and a proprietary pricing engine to manage risk and save money while supporting lenders and borrowers.
Financial Performance
For the quarter ended December 31, 2025, Essent reported net income of $155.0 million, or $1.60 per diluted share. Net income for the quarter was $312.4 million. For the full year 2025, net income was $690.0 million, or $6.90 per diluted share, on revenue of $1,260.9 million. Net investment income made a significant contribution to the results, increasing year-on-year and supporting all income in a high-quality environment.
The company reported premiums earned of $983.7 million for the year. Loss provisioning and loss adjustment costs increased compared to the prior year, reflecting portfolio seasoning and some weather-related losses noted during that period. Other underwriting and operating expenses remained well controlled compared to premiums earned.
Performance Metrics
New mortgage insurance (NIW) written in Q4 2025 was $11.8 billion, with insurance in effect approximately $248.4 billion at the end of the year. Annual persistence remained high, supporting premiums earned and income longevity. The company’s investment portfolio totaled more than $6.1 billion in marketable securities at year-end, as well as the holding company’s liquidity.
The average quarterly dividend return was in the new range every year. Book value per share continued to grow, as the company reported its biggest multi-year increase in book value to more than $60 per share in Dec. 31, 2025.
Important Developments
Essent announced a quarterly dividend increase to $0.35 per share and said it will repurchase 9.9 million common shares for $576 million in 2025. The company also entered into a share recapitalization plan in the fourth quarter that expands third-party reinsurance participation to acquire new qualifying insurance written through 2027 for third-party reinsurance.
Management highlighted the ongoing rollout of its EssentEDGE® pricing and analytics platform and noted continued investment in the title and settlement business. The company has identified sustainable capital return and balance-sheet strength as key factors in its capital allocation approach.
Risks and Issues
Essent’s results are exposed to mortgage defaults, housing prices, and macroeconomic variables, including unemployment and interest rates. The supply was higher in 2025, partly reflecting the taste of the portfolio and different choices related to natural disasters. Reinsurance availability and pricing remain key risk considerations, as do potential regulatory changes affecting the role of private mortgage insurance in the mortgage market.
The Company also faces operational risks related to title operations and the integration of new lines of business. Investment performance is sensitive to interest rate movements and credit spreads given the size of the investment portfolio.
Outlook / Direction
Management emphasized capital flexibility and sustainability while demonstrating a continued focus on shareholder returns. The board approved a dividend increase due in March 2026 and extended a $500 million share repurchase authorization. Areas to watch include new trends in insurance coverage, persistence and old-fashioned automation, insurance planning for 2027, and high-quality real estate investment income.
Performance summary
Essent reported quarterly revenue of $155.0 million and annual revenue of $690.0 million in 2025. The company increased shareholder returns through separate dividends and repurchases while strengthening reinsurance protection and maintaining a high capital ratio. Key metrics to monitor are new insurance written, effective insurance rates, persistence, defaults in the past, and investment income as the company navigates the vagaries of the mortgage market.
