Enact Holdings, Inc announced that its primary legal entity, Enact Mortgage Insurance Corporation (EMICO), has entered into two quota share reinsurance agreements with a panel of highly-rated reinsurers.
Enact says that the agreements, effective for new insurance written in 2025 and 2026, reflect the company’s focus on risk management and capital optimization.
Under the terms of the agreements, Enact will cede approximately 27% of a portion of expected new insurance written for the periods between Jan. 1, 2025, and Dec. 31, 2025, and Jan. 1, 2026, and Dec. 31, 2026. The arrangements are subject to specific conditions outlined in the agreements.
Rohit Gupta, president and CEO of Enact, stated that the new agreements reinforce the company's commitment to maintaining a prudent approach to risk management and capital efficiency.
“We appreciate the support and partnership from our broad panel of highly-rated reinsurers as we continue our mission to help people responsibly achieve the dream of homeownership,” Gupta said.
The agreements are expected to enhance Enact’s financial stability while leveraging the backing of a broad panel of reinsurers with strong credit ratings. These partnerships are part of the company's ongoing efforts to manage its risk exposure effectively and sustain its operations in a competitive mortgage insurance market.
Earlier this year, Enact Mortgage Insurance Corporation also finalized a quota share reinsurance agreement with a diverse group of highly rated reinsurers.
The terms of the agreement, subject to certain conditions, entail that Enact will cede roughly 21% of its expected new insurance written from Janu. 1, 2024, through Dec. 31, 2024.
Meanwhile, Enact Re also received ‘A-' long-term financial strength and issuer credit rating from S&P in August. The ratings for Enact Re are aligned with those of its parent company, EMICO, as Enact Re is considered a core subsidiary of EMICO.
Enact Re, an affiliated reinsurer of EMICO, provides quota share coverage for 12.5% of the net risk written, which helps to reduce EMICO's potential capital requirements under the Government-Sponsored Enterprises Private Mortgage Insurers Eligibility Requirements (PMIERs).
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