Radian Group (NYSE:RDN) delivered its Q2 2026 earnings on August 6, and the numbers marked a turning point. Total revenue jumped 93% year-over-year to $575 million, while net earned premiums more than doubled to $504 million, as the company's first full quarter with newly acquired specialty insurer Inigo showed up in the results. Book value per share climbed 8.5% to $36. With a forward P/E of just 7.19, the market doesn't seem convinced the growth will stick.
Radian's legacy mortgage insurance operation kept humming along on its own. New insurance written rose 14% year-over-year to $16.3 billion, and persistency held at 82%, pushing primary insurance in force to a record $284 billion. About half of that portfolio carries a mortgage rate of 5.5% or lower, so those borrowers have little reason to refinance away, which supports future premium income. Credit quality kept improving too. New defaults fell 9% from the prior quarter to roughly 12,400, and cures kept outpacing new defaults, dropping the portfolio default rate to 2.47%. That trend produced $20 million of favorable reserve development in the quarter, while the mortgage segment's expense ratio improved to 23% from 25% a year earlier.
The Inigo deal changed Radian's shape almost overnight. Specialty insurance now makes up roughly 50% of total revenue and 53% of net premiums earned, giving Radian a second, meaningfully sized engine. Capital returns kept flowing at the same time. Radian repurchased $76 million of stock in the quarter and about $50 million more so far in the third quarter, pushing year-to-date buybacks to $176 million, while Radian Guaranty sent a $200 million dividend up to the parent company.
The newly acquired specialty business is running into a tougher market. Management said competition is intensifying in property insurance and reinsurance and that rates continue to soften, a cyclical dynamic it says it expected when it underwrote the Inigo deal. The segment's net combined ratio came in at 98% for the quarter and 93% for the first half of 2026, elevated in part because Radian set aside reserves tied to the ongoing conflict in the Middle East, covering both expected and potential claims plus updated inflation **** umptions across the insured portfolio. Management now expects a combined ratio in the low 90s going forward as softer pricing works its way into results, versus the high 80s it had been tracking toward before the reserve charge. Radian is also mid-transition at the top, with CEO-elect Mike Weinbach set to take over from longtime CEO Rick Thornberry, and it still had $75 million outstanding on its revolving credit facility at quarter-end.
#million #quarter #specialty #Portfolio
Radian's legacy mortgage insurance operation kept humming along on its own. New insurance written rose 14% year-over-year to $16.3 billion, and persistency held at 82%, pushing primary insurance in force to a record $284 billion. About half of that portfolio carries a mortgage rate of 5.5% or lower, so those borrowers have little reason to refinance away, which supports future premium income. Credit quality kept improving too. New defaults fell 9% from the prior quarter to roughly 12,400, and cures kept outpacing new defaults, dropping the portfolio default rate to 2.47%. That trend produced $20 million of favorable reserve development in the quarter, while the mortgage segment's expense ratio improved to 23% from 25% a year earlier.
The Inigo deal changed Radian's shape almost overnight. Specialty insurance now makes up roughly 50% of total revenue and 53% of net premiums earned, giving Radian a second, meaningfully sized engine. Capital returns kept flowing at the same time. Radian repurchased $76 million of stock in the quarter and about $50 million more so far in the third quarter, pushing year-to-date buybacks to $176 million, while Radian Guaranty sent a $200 million dividend up to the parent company.
The newly acquired specialty business is running into a tougher market. Management said competition is intensifying in property insurance and reinsurance and that rates continue to soften, a cyclical dynamic it says it expected when it underwrote the Inigo deal. The segment's net combined ratio came in at 98% for the quarter and 93% for the first half of 2026, elevated in part because Radian set aside reserves tied to the ongoing conflict in the Middle East, covering both expected and potential claims plus updated inflation **** umptions across the insured portfolio. Management now expects a combined ratio in the low 90s going forward as softer pricing works its way into results, versus the high 80s it had been tracking toward before the reserve charge. Radian is also mid-transition at the top, with CEO-elect Mike Weinbach set to take over from longtime CEO Rick Thornberry, and it still had $75 million outstanding on its revolving credit facility at quarter-end.
#million #quarter #specialty #Portfolio
3 months ago
