Radian Group Expands Into Multi-Line Specialty Insurance With Inigo

Core Insights - Radian Group Inc. has signed a definitive agreement to acquire Inigo Limited for $1.7 billion, aiming to diversify into a multi-line specialty insurance business beyond mortgage insurance, with the deal expected to close in Q1 2026 pending regulatory approvals [1][3][9] Company Overview - Inigo, established in 2021, is a profitable Lloyd's specialty insurer, reporting a pre-tax profit of $116 million and a net combined ratio of 86% in the first half of 2025, focusing on data-driven specialty insurance products for commercial and industrial clients [2][6] Financial Considerations - The acquisition will be an all-cash transaction funded by Radian Group's excess capital and liquidity, without the need for new equity issuance [3][5] - The deal values Inigo at 1.5 times its projected tangible equity by the end of 2025, with Radian Group expecting mid-teens percentage growth in earnings per share and a 200-basis point increase in return on equity in the first full year post-acquisition [6] Strategic Rationale - This acquisition represents a strategic shift for Radian Group, transitioning from a U.S. mortgage insurer to a global multi-line specialty insurer, enhancing product expertise and optimizing capital deployment [4][6] - The deal is anticipated to double Radian Group's total annual revenues, providing resilience to deploy capital across various insurance lines [6] Business Restructuring - Radian Group plans to divest its "All Other" category businesses, including Mortgage Conduit, Title, and Real Estate Services, to simplify operations and focus on the new specialty insurance venture, with the divestiture expected to complete by Q3 2026 [7][8][9] Recent Strategic Moves - In January 2024, Radian Group made a strategic investment in FinLocker to enhance the homeownership experience, aligning with its growth strategy [9][10] Market Performance - Radian Group's shares have increased by 6.1% over the past year, slightly outperforming the industry average growth of 6% [11]