Financial Data and Key Metrics Changes - The company reported net income of $20 million or $0.18 per diluted common share, with operating net income of $14 million or $0.12 per diluted common share, resulting in an annualized operating return on average equity (ROAE) of 2.3% [20][21] - Gross written premiums increased by 9% year-to-date to $2.9 billion, with a quarterly growth of 2% to $1.2 billion [20][21] - The combined ratio for the quarter was 103.7%, impacted by the English High Court judgment related to Russia-Ukraine litigation [7][21] Business Line Data and Key Metrics Changes - In the Insurance segment, gross premiums written increased by 7% in the quarter, driven by asset-backed finance and portfolio credit, as well as political risk lines [21][10] - The Reinsurance segment saw gross premiums written of $317 million for the quarter, down from $346 million in the prior year [21] - The attritional loss ratio improved to 24.7% for the quarter, compared to 25.9% in 2024, indicating strong underlying portfolio performance [22] Market Data and Key Metrics Changes - The company maintained high retention levels, around 90% for the year, despite competitive pressures in certain markets [66] - The property market is experiencing significant pricing differentials compared to subscription market players, allowing the company to achieve favorable terms [11][10] - The aviation sector remains challenging, with the company not willing to write business that does not meet underwriting standards [12][104] Company Strategy and Development Direction - The company aims to balance profitable underwriting with capital returns to shareholders, having delivered a gross written premium growth of 54% since 2022 [5] - A focus on deploying capital to attractive risk-reward opportunities is emphasized, with ongoing expansion of strategic partnerships [6][38] - The company plans to continue share repurchases and has renewed its common share repurchase authorization to $200 million [18][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's strength and the ability to capitalize on profitable opportunities, particularly as the uncertainty from Russia-Ukraine litigation is resolved [38] - The company expects underwriting growth for the full year to be approximately 6% to 10%, with a strong pipeline in asset-backed finance and portfolio credit [34][35] - Management remains cautious about the aviation market but is hopeful for improvements in pricing [104] Other Important Information - The company announced an increase in its quarterly dividend to $0.15 per share, reflecting a dividend yield of 3.6% [29] - The effective tax rate for the first half of the year was 18.9%, expected to remain around 19% for the full year [27][28] Q&A Session Summary Question: Impact of wind season on property pricing - Management indicated that a significant capital event would be necessary to impact overall profit cap pricing, noting that recent losses have not affected the broader market [44][46] Question: Demand for political risk coverage - Management reported an uptick in deal activity in political risk, with new and repeat customers indicating a strong pipeline [48][50] Question: Explanation for discount valuation - Management acknowledged the stock is undervalued and emphasized strong performance excluding Russia-Ukraine impacts, indicating confidence in the portfolio's profitability [54][56] Question: Future expectations for return on equity - Management expressed confidence in achieving through-the-cycle targets, with a reasonable expectation of 15% return on equity in the current environment [59][60] Question: Pricing levels in property D and F - Management noted that while pricing is under pressure, they are maintaining high retention rates and are not willing to write inadequately priced business [66][68] Question: Reserve releases in property - Management indicated that positive prior year development is driven by actual claims experience, with consistent results expected in the reinsurance segment [80][82] Question: Tax rate guidance - Management clarified that the increase in the effective tax rate is due to the geographic distribution of income, with expectations for a similar rate in 2026 [110][112]

Financial Data and Key Metrics Changes - The company reported a net income of $185 million for Q4 2024, with an annualized return on equity of 14% [7] - For the full year, net income increased to $763 million from $713 million in the prior year [8] - The insurance in force at the end of the quarter was over $295 billion, showing a slight increase from the previous quarter [8] - The annual persistency rate remained stable at 85% throughout the year [9] - The book value per share grew to $20.82, reflecting a 12% increase year-over-year [17] Business Line Data and Key Metrics Changes - The company wrote $16 billion of new insurance in Q4 and $56 billion for the full year, marking a 21% increase from the prior year [9] - The in-force premium yield was 38.6 basis points, remaining relatively flat during the year [16] Market Data and Key Metrics Changes - The housing market remains resilient, supported by favorable supply-demand dynamics and a generally positive economic outlook [11] - Consensus forecasts suggest that the mortgage insurance market in 2025 will be similar in size to 2024, with elevated mortgage rates expected to lead to high persistency [12] Company Strategy and Development Direction - The company emphasizes a dynamic approach to capital management, focusing on financial strength and flexibility [10] - The reinsurance program is a key component of risk and capital management, providing capital diversification and reducing required assets [11] - The company aims to continue returning capital to shareholders through share repurchases and dividends while maintaining a strong insurance portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's leadership and market position, highlighting the successful execution of business strategies [22] - The company anticipates continued favorable credit trends and a stable risk profile, which may lead to elevated payout ratios [10] - Management noted that while the economic environment has been favorable, future conditions remain uncertain [33] Other Important Information - The company returned approximately $700 million to shareholders through dividends and share repurchases, representing a 92% payout ratio of net income [10] - Operating expenses for Q4 were $49 million, down from $55 million in the previous year, with expectations for further reductions in 2025 [17][18] Q&A Session Summary Question: Can you discuss the new notice claim rate and its drivers? - Management explained that the increase in new delinquencies is due to higher exposures from recent vintages, but they are targeting the same severity to exposure ratio as before [24] Question: What are the drivers behind the lower operating expenses? - Management attributed the lower operating expenses to cumulative changes made over the past couple of years, aligning resources to add value [25][26] Question: How does GSE reform impact the company? - Management acknowledged the uncertainty surrounding GSE reform but emphasized the importance of having the right guardrails in place to protect taxpayers and ensure a stable market [29][30] Question: What is the normalized delinquency rate? - Management indicated that while the current environment is favorable, they expect more normalized delinquency rates to be in the range of 20% to 40% over time [36] Question: Can you elaborate on the pricing environment for new insurance written? - Management noted that the risk-return profile remains favorable, allowing for effective capital deployment [50]