Enact Holdings Inc. Reports Strong Quarter with Positive Outlook

Enact Holdings Inc ((ACT)) has held its Q3 earnings call. Read on for the main highlights of the call.

Enact Holdings Inc. recently held its earnings call, revealing a strong quarter characterized by increased capital return expectations, a new credit facility, and positive ratings upgrades. Despite facing challenges such as increased delinquencies and a slight decline in adjusted operating income per share, the company’s overall business performance and strategic initiatives suggest a largely positive outlook.

Increased Capital Return Expectation

Enact has raised its 2025 capital return expectation to approximately $500 million, up from prior guidance of $400 million. This increase reflects the company’s strong business performance and confidence in its future prospects.

New Credit Facility

The company has entered a new $435 million revolving credit facility with favorable terms. This move provides Enact with additional financial flexibility, supporting its strategic initiatives and growth plans.

Positive Ratings Upgrade

Moody’s upgraded Enact’s rating to A2 from A3, and Enact Holdings’ ratings to Baa2 from Baa3. Additionally, A.M. Best moved the outlook to positive, highlighting the company’s strong financial position and potential for future growth.

Strong Insurance Metrics

Enact reported an adjusted operating income of $166 million, with a 13% return on equity. The insurance in-force increased by 2% year-over-year to $272 billion, indicating robust business health.

Effective Cost Management

Despite inflationary pressures, Enact managed to reduce expenses year-over-year, with improved expectations for the remainder of 2025. This reflects the company’s commitment to maintaining operational efficiency.

Delinquency Increase

The earnings call noted a 6% sequential rise in total delinquencies, with new delinquencies up 12% and cures down 1%. These changes are consistent with seasonal trends and are being closely monitored by the company.

Decline in Adjusted Operating Income Per Share

Adjusted operating income per diluted share decreased to $1.12 from $1.16 year-over-year and from $1.15 in the previous quarter. This slight decline is an area of focus for the company as it continues to optimize its financial performance.

Flat Net Premiums

Total net premiums earned remained flat sequentially and were down modestly year-over-year due to higher ceded premiums. This stability in premiums reflects the company’s efforts to manage its portfolio effectively.

Forward-Looking Guidance

Enact’s updated guidance for 2025 reflects strong performance and strategic execution. The company increased its capital return expectation to $500 million, underscoring its robust business health. With an adjusted operating income of $166 million and a 13% return on equity, Enact is well-positioned for future growth. The company also highlighted its PMIERs sufficiency ratio of 162%, ensuring significant financial flexibility. Despite macroeconomic challenges, Enact remains committed to creating long-term shareholder value and capitalizing on growth opportunities.

In summary, Enact Holdings Inc.’s earnings call paints a picture of a company with strong financial health and strategic foresight. While challenges such as increased delinquencies and a slight decline in operating income per share exist, the overall sentiment is positive, with increased capital return expectations and a new credit facility bolstering confidence in future growth.