MGIC Investment Corp. had third-quarter net earnings of $823 million, largely driven by a $698 million reversal of its deferred tax asset valuation allowance.
If the company had not recognized this balance-sheet item, its net earnings would have been $124.7 million for the quarter, an improvement over the $72 million earned in the third quarter of 2014.
New insurance written was $12.4 billion, a 19.5% increase over the third quarter of 2014's $10.4 billion. Year-over-year insurance-in-force increased 6.3% to $172.7 billion,
The company also reported a 22% decrease from the third quarter of 2014 in its inventory of delinquent loans to 64,642.
In a note in its press release, MGIC commented, "The level of competition within the private mortgage insurance industry is intense and is not expected to diminish."
In particular, there has been price competition over lender-paid single-premium products. This product represented 15% of MGIC's third-quarter new insurance written; in the second quarter, it was 17%, and in the first quarter it was 20%. For all of 2014, this was just 11% of its business. This increase in business was because of MGIC deciding to selectively match the lower rates being offered by other private MIs.
But this is not the only product MGIC is feeling the competitive heat. "In the third quarter of 2015, we also saw price competition in certain higher FICO segments of borrower-paid monthly premium plans through at least one competitor offering selected lenders customized rates lower than those on the standard rate card," its press release said.
