MGIC Investment (NYSE:MTG) reported fourth-quarter 2025 results that executives described as another period of “solid financial results,” driven by disciplined risk management, stable credit performance, and continued capital returns to shareholders.
Quarterly and full-year performance
Chief Executive Officer Tim Mattke said the company closed 2025 “strong” and entered 2026 from “a position of strength.” MGIC posted fourth-quarter net income of $169 million, which management said equated to an annualized 13% return on equity. For the full year, net income totaled $738 million and return on equity was 14.3%.
MGIC wrote $17 billion of new insurance written (NIW) in the fourth quarter and $60 billion for the full year, an 8% increase from the prior year. Persistency remained elevated throughout 2025, ending the quarter at 85%, which management said was in line with expectations.
2026 outlook: stable MI market, insurance in force expected to be flat
Management said consensus mortgage origination forecasts point to a mortgage insurance market in 2026 that is “relatively similar” to 2025, with mortgage rates remaining elevated. Against that backdrop, MGIC said it expects insurance in force to remain “relatively flat” in 2026.
Mattke added that if rates fall more than currently predicted, the MI market could benefit from increased refinance activity, but any insurance-in-force growth could be offset by lower persistency. In response to an analyst question, Mattke emphasized that when refinance activity increases, it can create downward pressure on persistency because refinance transactions often move from MI into MI rather than adding incremental insurance in force.
Credit trends, delinquencies, and reserves
MGIC characterized portfolio credit quality as “solid,” citing an average credit score at origination of 748. Mattke said the company has not seen a material change in credit performance and that early payment defaults remain low.
Chief Financial Officer and Chief Risk Officer Nathan Colson reported fourth-quarter net income of $0.75 per diluted share, up from $0.72 in the year-ago quarter. Full-year net income was $3.14 per diluted share, compared with $2.89 in 2024.
Colson said MGIC recorded $31 million of favorable loss reserve development in the quarter from re-estimating ultimate losses on prior delinquencies. He attributed the favorable development primarily to delinquency notices received in 2024 and the first half of 2025, as cure rates for recent notices “continue to exceed” expectations. For new delinquency notices received in the quarter, MGIC maintained an initial claim rate assumption of 7.5%.
The company’s count-based delinquency rate increased 11 basis points sequentially and 3 basis points year-over-year. Colson said the sequential increase reflected normal seasonality and the continued aging of the 2021 and 2022 book years, while the year-over-year increase represented the slowest rate of increase since the first quarter of 2024 and suggested a continued normalization of credit conditions.
On geographic trends, Colson said the company has not seen meaningful shifts in the mix of new delinquencies by state or market, noting that some jurisdictions can appear noisy due to relatively low notice volumes.
Premium yield, investment income, and expenses
MGIC’s in-force premium yield was 38 basis points in the quarter and was “relatively flat” during the year, consistent with management’s expectations. Looking ahead, MGIC expects the in-force premium yield to remain near 38 basis points in 2026 given expectations for a similarly sized MI market.
In response to an analyst question about a slight quarterly dip, Colson attributed the movement to timing and mix effects, including stronger-than-expected NIW volume late in the quarter that increased ending insurance in force without immediately adding premium in the first month.
Investment income totaled $62 million in the fourth quarter. The book yield on the investment portfolio was 4% at quarter-end, with investment income described as relatively flat sequentially and year-over-year because both the book yield and the size of the portfolio were also relatively flat. MGIC also said its unrealized loss position narrowed by $16 million, primarily due to lower interest rates.
Underwriting and other expenses were $46 million in the quarter, down from $49 million a year ago. Full-year expenses totaled $201 million, down $17 million from 2024 and within the company’s previously communicated range. For 2026, MGIC guided to operating expenses of $190 million to $200 million, which Colson said was driven primarily by higher expected ceding commissions tied to renegotiated quota share reinsurance treaties.
Reinsurance and capital return
Management emphasized reinsurance as a key element of its capital strategy. Mattke said the company continued to bolster its reinsurance program with forward commitment quota share agreements and excess-of-loss arrangements in both traditional reinsurance and capital markets, aimed at reducing loss volatility and providing capital flexibility.
MGIC cited several recent transactions:
- $250 million excess-of-loss coverage tied to its 2021 NIW (announced previously).
- A 40% quota share transaction expected to cover most of its 2027 NIW.
- Amended quota share treaties covering 2022 NIW, reducing ongoing cost by approximately 40% beginning in 2026.
- An eighth insurance-linked note transaction completed in January providing $324 million of loss protection covering certain policies written between January 2022 and March 2025.
At the end of the fourth quarter, management said the reinsurance program reduced PMIERs required assets by $2.8 billion, or approximately 47%.
On capital return, Colson said MGIC prioritizes prudent insurance-in-force growth over returning capital, but noted that constrained market growth in recent years, strong credit performance, and what management viewed as attractive share price levels supported significant distributions. In the fourth quarter, MGIC paid $33 million in common dividends and repurchased 6.8 million shares for $189 million. For the full year, MGIC returned $915 million through dividends and share repurchases, reducing shares outstanding by 12% and representing a 124% payout ratio of the year’s net income.
MGIC also repurchased 2.7 million shares for $73 million in January. The board approved a quarterly dividend of $0.15 per share, payable on March 6, and management noted the quarterly dividend was increased by 15% in the third quarter, marking five consecutive years of dividend growth.
MGIC said it paid $800 million in dividends from the operating company to the holding company during 2025, ending the year with $1 billion of holding company liquidity and $2.5 billion of excess to PMIERs at the operating company.
In closing remarks, management discussed housing affordability and said it continues to participate in industry discussions with stakeholders including the FHFA and the GSEs. Mattke pointed to the passage of the Working Families Tax Cut, which restored the tax deductibility of MI premiums, as a policy change that provides tax relief to homeowners. MGIC said it will participate in upcoming UBS and Bank of America financial services conferences.
About MGIC Investment (NYSE:MTG)
MGIC Investment Corporation (NYSE: MTG) is a leading provider of private mortgage insurance in the United States. Established in 1957 as the nation’s first private mortgage insurer, MGIC helps lenders manage credit risk and facilitates homeownership by protecting mortgage loans against default. Headquartered in Milwaukee, Wisconsin, the company operates through its principal subsidiary, Mortgage Guaranty Insurance Corporation, and maintains relationships with a broad network of originators and servicers nationwide.
The company’s primary business activity involves issuing mortgage insurance policies that enable borrowers to purchase homes with down payments below traditional lending thresholds.
