Radian Group Aktie

Good day, and thank you for standing by. Welcome to the Third Quarter 2026 Radian Group Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Bob Lally, VP Finance. Please go ahead.

Thank you, and welcome to Radian's Third Quarter 2026 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website at radian.com. This press release includes certain non-GAAP measures that may be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity. A complete description of all our non-GAAP measures may be found in press release Exhibit F and reconciliations of these measures to the most comparable GAAP measures may be found in press release Exhibit G. These exhibits are on the Investors section of our website.

Today, you will hear from Mike Weinbach, Radian's Chief Executive Officer; and Dan Kobell, Senior Executive Vice President and Chief Financial Officer.

Before we begin, I'd like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For more information regarding these risks and uncertainties as well as certain additional risks that Radian faces, you should refer to the risk factors included in our 2025 Form 10-K as well as to subsequent reports filed with the SEC.

Now I'd like to turn the call over to Mike.

Thanks, Bob, and thank you, everyone, for joining us today. We're speaking to you from London, where we've been spending time with our talented Inigo team. Several of the Inigo leaders are with us today, and you'll have an opportunity to hear from them during Q&A. So feel free to get your questions ready. This is my first earnings call as CEO, and I'm proud of the strong performance this quarter with solid contributions from both our Mortgage and Specialty businesses and the progress our teams are making across the company.

Before discussing our results, I'd like to congratulate Dan on his appointment as Chief Financial Officer, which we announced last week. Many of you have worked with Dan over his career at Radian and know him as a trusted leader with deep knowledge of our businesses. He's provided stability and sound judgment throughout this transition, and I'm confident he's going to be a great partner as we work closely together to build on our momentum and execute our strategy.

Turning to the results. Radian reported an excellent quarter. Specialty benefited from relatively benign cat activity, but the broader takeaway is a growing contribution to enterprise earnings and continued underwriting discipline in a more competitive market. Mortgage continued to generate attractive earnings and capital, supported by strong portfolio fundamentals. As credit normalizes, performance remains in line with our expectations.

Turning to the slides. As you can see on Slide 1, our results demonstrate the strength of the combined company we've built, 2 complementary insurance businesses that share a disciplined approach to underwriting, risk selection and capital management. Total revenue for the quarter more than doubled year-over-year with the addition of Inigo, growing to $624 million, while adjusted pretax operating income grew to $254 million. Our Specialty segment contributed 57% of net premiums earned and 34% of adjusted pretax operating income this quarter, tangible evidence of our strategy in action.

Over my first few months as CEO, I've spent considerable time with our leaders, teams and customers in both the U.S. and the U.K., looking closely at our businesses, our markets and where we have the greatest opportunity to create long-term value. I've come away with even greater confidence in our direction and several clear observations, which are summarized on Slide 3.

First, we have 2 strong insurance businesses with significant opportunity ahead. In Mortgage, that means continuing to improve efficiency and simplify the customer experience. In Specialty, it means continuing to build the business with the same approach to underwriting and risk that's driven its success since its founding.

Second, the strategic rationale for acquiring Inigo is beginning to show up in our results. We said the transaction would diversify our earnings, expand our ability to deploy capital and add a scaled specialty platform without changing the disciplined way we approach risk. Those building blocks are now in place, and we're seeing them translate into results.

Third, the 2 businesses share capabilities that differentiate Radian. Both use data and analytics to inform risk selection, pricing and portfolio management. Both emphasize underwriting and risk management discipline and benefit from strong customer insight. These are the critical capabilities that drive our performance across market cycles.

Fourth, we have a strong capital position and meaningful flexibility. That allows us to support growth and opportunity in our businesses, manage risk prudently, invest where we have expertise and a clear right to win and return excess capital when that creates the greatest long-term value. And finally, we have the leadership and focus to execute.

In addition to Dan's appointment as CFO, we've made several changes to our leadership team to better align responsibilities with our strategic priorities. Russell Merrett will lead group P&C strategy. Craig Knightley will become Inigo's Chief Underwriting Officer; and Stuart Bridges will take on a broader role as a Radian Group Advisor, strengthening relationships with P&C-focused investors and business partners. They join an already strong group of leaders on our executive team, which you can see on Slide 11. Together, the team brings deep experience across Mortgage and Specialty, the enterprise capabilities to support the businesses and continued discipline around capital allocation and financial performance. I have great confidence in this team's ability to turn our strategic priorities into results.

Before turning it over to Dan, I want to make a few points on our approach to strategic capital allocation. The capital we generate is a significant source of strength and is central to how we create long-term value for our shareholders. As you can see on Slides 8 and 9, we have a strong track record of disciplined and opportunistic capital allocation. Our approach is straightforward. We will put each dollar where we believe it can create the greatest long-term value while maintaining our financial strength. We're proud that adjusted book value per share has more than tripled since 2017, representing a compound annual growth of approximately 15%.

Our focus is to build on that track record by continuing to underwrite risk well, carefully allocate capital and invest where we see the greatest opportunity. As we look ahead, I'm confident in where we are and clear about where we're going. The building blocks are in place. Our focus now is execution, strengthening both businesses, operating more simply and turning our strengths into long-term value for our shareholders.

And with that, let me turn it over to Dan.

Thank you, Mike. Radian delivered a strong third quarter, and I'm pleased to provide additional details about our results. On a GAAP basis, we generated net income from continuing operations of $1.28 per diluted share with a return on equity of 15%. Adjusted net operating income was $1.44 per diluted share, an increase of 25% from the third quarter of last year. And adjusted net operating return on equity was 16% this quarter, an increase of approximately 250 basis points from the third quarter of 2025.

With 3 quarters of results now reported for 2026, we are also pleased to see the immediate financial benefits we expected from the Inigo acquisition. Year-to-date, Radian has generated operating earnings per share of $3.84, an increase of 17% compared to the prior year. Our operating return on equity year-to-date has increased to 15%. Approximately 1 year after announcing this transaction, along with the divestitures of our non-core businesses, Radian is a simpler company with a more balanced earnings profile, higher returns and access to broader insurance markets to support disciplined profitable growth.

Our book value per share grew year-over-year to $35.78. As a reminder, our book value includes the impact of the accumulated other comprehensive income or loss associated with our investment portfolio, which reduced book value by $1.33 per share this quarter due to an increase in interest rates. We view the impact of this increase in rates as a net positive for Radian as we have the ability to hold these high-quality investments to maturity and benefit from the pull to par, and we're able to now invest current cash flows into this higher interest rate environment. Excluding AOCI, our book value per share grew 9% year-over-year or 12% when including the dividends paid to our shareholders during this time.

Turning to the key drivers of our performance. As shown on Slide 4, we generated net earned premiums of $548 million this quarter, an increase of 131% from a year ago. Our net premiums earned are well balanced across our segments, with Specialty accounting for 57% of third quarter net premiums earned. Net investment income was $77 million this quarter, up 22% year-over-year due to a growing portfolio, including the impact of the Inigo acquisition as well as higher yields. Our $7.1 billion investment portfolio remains well diversified across highly rated securities, and the portfolio continues to be an important contributor to our earnings.

Turning now to our segment results. Our Mortgage Insurance business continued to generate strong consistent earnings supported by healthy portfolio fundamentals. Primary insurance in force continued to grow, reaching a record $286 billion. We wrote $15 billion of new insurance this quarter, while quarterly persistency remained favorable at 83%, supported by limited refinancing activity. As expected, the default rate increased to 2.68% this quarter following typical seasonal trends. As the portfolio matures, credit performance across all vintages continues to be in line with or favorable to our initial expectations, and the underlying portfolio fundamentals remain strong. For the quarter, the mortgage segment generated $206 million of adjusted pretax operating income with a combined ratio of 37%.

Slide 7 shows results for our Specialty Insurance business, which delivered excellent third quarter results due to continued sound underwriting along with a benign natural catastrophe quarter. Net premiums earned were $311 million, a decline of 3% year-over-year. In our Specialty business, we continue to target opportunities to write attractive business across a range of insurance and reinsurance lines. As the environment has become more competitive, particularly in property insurance and reinsurance, we remain thoughtful and disciplined in our underwriting approach, focusing on maintaining sound margins to drive profitability. This small decline in premiums year-over-year reflects this approach to prioritize profitable underwriting over top line growth.

Total loss provision within the Specialty segment was $148 million, which included $43 million of favorable net development for prior period reserves, which was seen broadly across most of our property and casualty lines of business. Our Specialty segment net combined ratio was 80%, reflecting a benign natural catastrophe quarter. Setting aside the benefit of lower cat losses, our combined ratio in the third quarter would have been in line with our prior guidance in the low 90s. For the quarter, the Specialty segment generated $86 million of adjusted pretax operating income, up significantly from the prior quarter. Additional details regarding our segments are available in press release Exhibit E.

Moving to our capital, available liquidity and related strategic actions, as shown on Slide 8. Our strong capital position remains a significant advantage and provides us the flexibility to support both insurance businesses, manage risk, maintain appropriate liquidity and return excess capital to shareholders. During the quarter, we repurchased $135 million of our shares. In October, we repurchased an additional $117 million of our shares, bringing our total 2026 repurchase activity to $379 million, or 8% of our beginning shares outstanding. Our repurchase activity this year has significantly exceeded our previously guided range of $200 million to $250 million, which did not anticipate the recent opportunity to buy shares at increasingly attractive prices.

Over the last 3 months, we leaned into this opportunity, purchasing over $200 million of our shares at an average price below our current book value, which we view as a highly accretive use of our excess capital. We are pleased that our financial strength and flexibility allowed us to opportunistically purchase these shares during the same year as a transformative $1.7 billion acquisition, and we'll continue to pursue opportunities to use our excess capital to drive attractive returns for shareholders.

During the third quarter, we also fully repaid the remaining balance on our revolving credit facility, reducing our holding company leverage below 19%. Our available liquidity at Radian Group was $376 million at quarter end. In August, we announced the sale of our real estate services and title businesses, which will complete our divestiture process announced late last year. We are pleased with the outcome of this process, which we expect to complete within our expected time line and has returned significant liquidity to our holding company.

As we move forward and continue to execute on our strategy, the earnings power of our complementary insurance businesses, along with our balance sheet strength, continue to provide us with significant financial flexibility. Our actions in the third quarter reflect our thoughtful approach to capital management as we continue to return significant capital to shareholders while reducing our debt and maintaining our liquidity position.

I will now turn the call back over to Mike.

Thank you, Dan. Before we open it up for questions, I'll leave you with 3 things. First, we had a strong quarter with solid contributions from both mortgage and specialty. The strategy we put in place is working, and we're seeing the benefits of a more diversified Radian. Second, we see meaningful opportunity in both businesses, and our focus is on serving our customers well and growing with discipline. And finally, we have the financial strength and flexibility to invest in our businesses, allocate capital and create long-term value for our shareholders.

Now we look forward to your questions. Operator?

[Operator Instructions]

And our first question comes from Rowland Mayor of RBC Capital Markets.

Would love to just start on the Specialty business. I was hoping you could maybe discuss how Inigo establishes combined ratio targets and whether you consider investment income potential, particularly in long-tail lines.

Yes. Thanks, Rowland, for the question. This is Dan. So in terms of combined ratio targets, I think certainly, the investment income is part of the overall picture. When you look at the longer tail lines, it's a meaningful component of the total return. When we look at the combined ratio guidance that we provided as an example, the low 90s, I think that's inclusive of a full portfolio with varying targets around that in terms of different lines of business, knowing that the investment income will be a different contributor for different lines just based on kind of short tail versus long tail in those -- kind of how that varies across the portfolio.

Yes. Thank you, Dan. Russell Merrett speaking. I think significant points I would echo there are that our expectations for net combined ratio do vary quite considerably class to class and are subject to variation year-on-year, we are pretty comfortable with where we're operating at the moment in terms of being able to meet our target net combined ratios, in that we continue to enjoy adequately rated business throughout the lines that we underwrite today.

Rowland, I would say, it's Richard Watson here. I mean it's clearly an important part of the consideration when we look at those risks. But I always fear that when underwriters think they can price risks to a near 100 combined and then survive off the investment income, they're probably fooling themselves. So I don't know that we lean on that aspect as much as others do. I think I'm sort of still looking for something that is an attractive proposition net of that investment income, and it's an added benefit when we get it.

And I'd sort of add, Stuart Bridges here. But we would class by class aim to make an underwriting profit in each class rather than just an underwriting profit from a portfolio. I think that's -- I think that also differentiates our attitude towards underwriting.

That's helpful. And then maybe as I look at the reserve releases in Specialty, is it being driven by any particular accident year line of business? And then is there any FX impact in there as I assume most of the reserves are in pounds?

Russell Merrett, coming back to you on that, Rowland. No, I think as Dan observed, the reserve releases actually came from a whole variety of classes, both short tail and long tail. Cat prior year -- prior period development releases were a little bit less than half of the total. And the non-cat releases related to both shorter tail and the liability classes. Fortunately, we're small enough and our number of large losses is actually small enough that each large claim gets reviewed each quarter. And it just so happened that this quarter, there were a couple of large items, and I'm thinking in the $2 million to $4 million range of specific reserves that developed favorably and went away as well as a sort of broad-based observation that our incurred claims were actually trending favorably and had been for a couple of quarters. So I feel there was a bit of a catch-up in this quarter, recognizing some good news that have been coming.

Stuart Bridges here. On the FX, we trade in dollars. The vast majority of our business is in dollars. So there will be some foreign exchange effect, but I think it's easier just to regard us as people who think and trade in dollars.

And I believe this one is probably more for the Radian team. When the Inigo deal was announced about a year ago, I think there was some belief that there will be capital synergies from the diversification. Now that you're a year in, is there any updated view on potential synergies or anything tangible there?

Yes. Thanks, Rowland, for the question. So as you recall, when we announced the transaction, there was some financial guidance as far as the earnings accretion and the return expansion that we would expect to see. When you look at our results through the first 3 quarters of this year, definitely, you can see the earnings growth coming through, 17% year-over-year increase in terms of operating earnings. The return on equity, when you look at our operating ROE kind of before the Inigo transaction, before the divestitures were announced the first 3 quarters of last year in the 13% range, and we're now at about 15% year-to-date. So you're seeing significant financial accretion there.

And that's really before some of those capital synergies that you kind of referred to really have been able to take effect. And so the first of those that I'd point to would be the letter of credit facility. So that's one that we talked about also at our Investor Day in June. And it's one of the flexible options for funding the Specialty business, the capital requirement under Lloyd's that is available and Inigo has been utilizing that, but it's available now given Radian's financial strength as a parent company in larger size and generally at favorable pricing.

And so the announcement that we had this week related to the letter of credit, we've increased that. We've secured favorable pricing on that, and that's really set up for the 2027 underwriting year. So Stuart did an excellent job putting that in place. And so that's one piece of the puzzle. We'd expect as we go forward and we put the Specialty business capital stack together for next year, we'll have more to share as far as what that means. But we're starting to see those capital benefits develop. And it's one of those cases where, again, the financial strength of Radian as a parent company and the flexibility that Inigo has 1 plus 1 equals something more than 2.

And our next question comes from Bose George of KBW.

On the buybacks, you noted that they were opportunistic based on where the stock was trading. Just going forward, what's a good way to think about the cadence of total capital return, including buybacks?

Yes. Bose, it's Mike. As Dan shared with you, we ended up significantly exceeding the top end of the share buyback range we shared with you last quarter. And as we discussed, we aim to allocate capital strategically to the benefit of shareholders. Now the top of our capital allocation waterfall is always going to be to invest in our businesses in a way that will create long-term value for the enterprise. But when we last provided guidance, we had purchased a little bit over $175 million of shares year-to-date, and our shares were trading a little bit north of $39 per share. And quite frankly, we didn't anticipate the opportunity to buy back shares at near book value and then even more below book value.

And as we look ahead to softening markets, we leaned into the opportunity and maybe a little bit ahead of our anticipated pace. So depending on where we trade through year-end, we may or may not be done for the year, but our message remains the same that we aim to be good stewards of capital on behalf of our shareholders. And we have 2 very strong businesses that generate capital back to the group, and we will be thoughtful in allocating it in a way to create long-term value for the company.

Okay. Great. That's helpful. And then one on the FICO, VantageScore stuff that's going on. Now that they're both on the same grid, how does that impact your pricing? Because clearly, the credit didn't improve because the grid got sort of combined. So just how does that kind of play into how you think about it?

Yes, Bose. That's a great question, Mike, again. We're supportive of all the different credit models, and we're supportive of competition in the credit scoring market. We've studied them all. We've done the modeling, and we're operationally ready to handle all scores. That said, we are watching to ensure that we can price accurately if we continue to be in the best execution environment for lenders. The same score under one model might mean a different level of credit risk than it does under another model.

So pricing them the same could potentially be concerning because obviously, other things being equal, if lenders are best exiting the execution and we price the same, we could find ourselves inadvertently taking more risk for the same pricing or the same risk for lesser pricing. So we're watching it carefully. We're early. We're going to be thoughtful and careful in terms of the way we proceed. But at the same time, we're going to be there for our customers and prepared to support the market in whatever way it develops.

And our next question comes from Mihir Bhatia of Bank of America.

So I wanted to maybe just start on the -- maybe start with Inigo since you're in London. Maybe just talk a little bit more about Inigo's edge, if you will, right? As competition increases in the Specialty market, what differentiates your underwriting model? Which of these -- how is that -- and why is that sustainable in such a competitive market?

Well, thanks. That's a great question, and thank you for that. It's Richard Watson here. When we first set the business up, we took a very conscious choice to go narrow, go deep to really focus on being experts in the lines of business we did and to try and avoid being the kind of general player on multiple classes of business. And I'm delighted 6 years later that, that strategy still seems like a very worthwhile one to pursue, and we hold a high bar against ourselves to prove that we do that. The idea that you can bring expertise, you can bring capacity and you can back that up with the -- one of the other advantages we recognized early on, particularly as a new player, was the ability to record and analyze data in a way that had not been possible before. And for a lot of incumbents was very difficult because of the complexity and legacy systems they had.

So if you combine expertise with an ability to record and analyze data in a really market-leading way, that's a pretty attractive combination. And then on top of that, the thing that we've really focused on is the connection with the customer and really bringing the customer figuratively and literally into our office so that we can get to understand them, their risks, and partner with them in the way that we trade. This week, we had 33 risk managers and partners in the office. We took them through a 3-day program led by Craig Knightley and his team. It was what I can even describe as an extraordinary event and the feedback from customers has been, I mean, really humbling and just extraordinary.

So I do think those are levels of focus and a way of operating that is differentiated in the marketplace. The amount of time and effort and the capability that we bring to all of those 3 things, the expertise, the data, the customer connectivity, I really do feel it's market-leading. And from our point of view, we've only just begun that journey. I mean we're looking at this improving every year that we do it. This year's event was way better, more detailed than last year's. The work we're doing on AI and analyzing risk is just growing every day.

So from my point of view, it seems -- I'm excited by where we can take those core ingredients. I'm not sitting here thinking we've reached a limit or we're just becoming part of the mass market. It still feels like the strategy we had is a sustainable and competitive advantage.

It's Mike. I'll just add, Mihir, for you and any of the other investors or analysts on the call. Part of the reason that Dan and I are here is because we like to see it in action. Richard mentioned the Horizon event where our clients were here. When we're here, we spend time with the broker community, we spend time with the team. And Richard, I think you used the word extraordinary twice. That's the word I was going to use as well. It really is beyond the ordinary, and we think it's something different, but also recognize that sometimes you have to see it to really appreciate it. So I just want to extend that offer to anyone on the call who wants to see it, reach out to our IR team, and we'll help you get out and experience the magic.

Great. Okay. Maybe switching gears a little bit to the housing deal for a second on the MI business. Obviously, the pilot talks about it being for new business and using AVMs and things like that to the extent it's even, I guess, implemented. But can you help us with just thinking through some of the implications of that? Like how much would that shorten expected life if you were to use that on new policies written last year or something? I'm sure you started doing some testing and thinking through that.

And what are the implications of that? Do you start needing to reprice new business for a shorter duration? Have you had any discussions with the FHFA on what AVM standards would be and things like that? Just any color you can provide us and how to think about the implications of such a policy going in place?

Yes. It's Mike. I'll start with some general comments and then see if Dan wants to add anything more specific. And maybe the most meaningful general comment is we're very, very early days here. But we're supportive of the executive order aimed at reducing the cost of homeownership. And that includes piloting simpler ways to provide for cancellation of mortgage insurance in the future where home price appreciation reasonably supports it. For the record, we're also supportive of aligning the GSE servicing guides. I can't remember if that happened before the last quarter or not, and we support the actions FHFA and Fannie Mae have taken to do so.

I'll maybe even take a step back and share prior to Radian, I had responsibility for leading 3 mortgage originators. And I'll confess that despite that, I didn't fully appreciate the important impact that private mortgage insurance plays in supporting affordable homeownership. So a few stats I just want to share with you and everybody. PMI helps homebuyers, on average, save nearly $50,000 on their down payments. Over 60% of buyers with PMI are first-time homebuyers. And maybe most significantly, while there's been large increases in pricing and the cost of just about every aspect of homeownership, the rates for private mortgage insurance are down by over 25% over the last 10 years.

So as an industry, we're more than doing our part. And of course, we bring private capital to the market, absorbing the first loss, protecting lenders, the GSEs, taxpayers. So back to your question, we look forward to working with Fannie and Freddie to help simplify mortgage insurance going forward in a way that produces the best outcome for homeowners, lenders, the GSEs and the private capital that supports affordability. It's way too early to have any specifics on what that looks like. But I'll turn it over to Dan to see if there's anything you want to share in terms of numbers.

Yes. As far as our persistency, Mihir, I think you saw an increase this quarter a bit to 83% in terms of the annualized persistency metric. That really was a function of the increase in interest rates. So seeing lower refi activity even off of a fairly low base of what we saw in the second quarter. And when you look at persistency trends over time for our business, there's cancellations related to kind of interest rate movement. So as rates go down, you'll tend to see more refi activity and cancellation for those reasons. You'll see automatic cancellations. And then you'll also see cancellations that are driven by home equity growth and kind of those borrower requested cancellations.

We typically see the volatility and persistency is going to be much more connected to the interest rate-driven piece. The other ones are tend to be fairly stable quarter-to-quarter, and that's what we've seen over time. So I think as we look forward for our business, I'd still continue to expect persistency to be relatively correlated with kind of what we see from a refi activity perspective and generally where we see interest rates going.

And our next question comes from Geoffrey Dunn of Dowling & Partners.

Just had a question on capital. Should we consider Inigo as a potential excess capital generator for the holding company? Or will that capital be retained for cycle management?

Yes. Thanks, Geoff, for the question. So I think over time, what you'll see, certainly, Inigo has been a growing business in the first 6 years or so. And so typically, the capital requirements under the Lloyd's framework will grow along with that as kind of they're connected to the expected premiums that you write in any given year. As we've entered into a little bit of a softening market, those capital requirements are probably going to be a little bit more stable from year-to-year. And as the business continues to generate profits, to your point, you might see that Inigo, like our MI business, might find itself in a position where it's generating more capital than it needs to put back to work. So I think that's something that we'll see develop over time. I can't really speak to timing and amounts at this point, but certainly a good observation that, that's where we could be headed overall.

Okay. And forgive my ignorance on this. So is there anything similar to stat filing that we could look at to see any given quarter if there's outflows?

If there's outflows from Inigo to Radian Group?

Yes.

Well, we would certainly announce those if they happen. I don't believe there'd be anywhere else that you see it from a reporting perspective.

Stuart Bridges here. And what I'd say is to date, we've retained the capital, as Dan said, to allow the business to grow. And it's, a, the premium growth, but obviously, as we are a fairly young company and our reserves grow, so that creates additional capital. But I do think Dan is right that if you had excess capital, you would not keep it in the Specialty subsidiary.

And our next question comes from Terry Ma of Barclays.

I think most of my questions have been asked and answered. Maybe just a follow-up on policy, just given the midterm results a few days ago. Any early thoughts on any potential shift in housing policy over the next 2 years? Or anything you're watching out for to come out of Washington?

Yes. Terry, it's Mike. Thanks for the question. I don't think there's more to say other than we're committed to responsibly supporting housing affordability, which we believe is a bipartisan concern. So we're not anticipating any significant impacts.

Got it. And then maybe just last one for me. Like on MI credit, default rate was up about mid-20 basis points this quarter year-over-year. Like as you kind of look out as your vintages season, anything that would make that default rate on a year-over-year basis accelerate or decelerate over the next few quarters? Like is that a good jumping-off point to think about 2027?

Yes. Thanks, Terry, for the question. This is Dan. So the default rate did increase, as you noted, to 2.68% as expected this quarter. We would typically expect to see that in the second half of the year. So I would also expect in the fourth quarter to see an increase as well. It's important to note that the portfolio default rate is really a weighted average of the underlying vintages. And so as the book has seasoned and extended as we've seen fairly low level of cancellation activity, some of the older vintages, which typically tend to carry higher default rates just naturally are now making up a larger and larger percentage of the book.

So I think that's really what's driving a lot of what you're seeing at the total portfolio level, where it's really just a skew upwards in terms of those older vintages driving a higher overall default rate, more so that dynamic than any deterioration that we see in terms of credit performance. And so I think that extends also when you look at it at a credit cohort level or any specific geographies, not seeing any signs of concern or any kind of deterioration in the portfolio.

I'd also note that the defaults that we have seen emerge over time continue to cure at very high levels. So typically, we've seen cumulative cures trending towards 96% or 97% of the defaults that have emerged. Our reserving assumption effectively embeds a 92.5% cumulative cure assumption. So we continue to see that outperform expectations as well. But overall, I'd say no areas where we're seeing concerns from a credit perspective. It continues to season very well.

And our next question comes from Doug Harter of BTIG.

Can you talk about what your kind of expectations are for holding company liquidity, the ability to kind of dividend up from the MI just as we think about your ability to continue to return capital to shareholders, especially if the stock continues to trade at a discount?

Yes. Sure. Thanks, Doug, for the questions. This is Dan. So I'll start with the dividend piece and then get to liquidity. So we did announce that we're expecting a dividend in the fourth quarter of $145 million. So that will take the total 2026 amount from Radian Guaranty up to $660 million. So if you remember back to the start of the year, initial guidance was $600 million. So we're about 10% better than that. And that's really just driven by favorable earnings in the Mortgage Insurance business. Effectively, the dividend capacity from Radian Guaranty is really the primary driver of that is going to be the ongoing statutory earnings of the business. So as that has outperformed expectations, that's become available to dividend up to the holding company.

As far as liquidity at the group level, I think the range that you see us in over the last couple of quarters is probably a good estimate for us kind of in the $300 million to $400 million range. That's a comfortable level. Keep in mind, we do have a $500 million revolving credit facility that's now undrawn. We just paid off the draw that we took earlier this year at the end of the third quarter. So I feel very comfortable where we are from a liquidity perspective. I'd also note we have a senior debt maturity coming up in the first quarter of next year. Our expectation is we're going to refinance that and certainly comfortable with where we stand in terms of total holding company leverage at this point.

So I'd say, overall, no guidance at this point in terms of the Radian Guaranty dividends for next year. It will be -- continue to be driven by the ongoing earnings. We can provide probably an update there as we go forward. But hopefully, that's helpful in terms of the overall picture from a group perspective.

And it's Mike. The only thing I'd add is we're blessed to have 2 profitable cash-generative businesses that generate mid-teen returns through the cycle. So -- and as I talked about earlier, our best use of capital is always going to be to invest back in the businesses we have in ways where we can find good returns. And even in a softening Specialty Insurance market, we're finding places where we can deploy capital for adequate returns. The mortgage market in a high rate environment is growing slowly. So we'll see what happens with rates. But should something change, we're ready and able to deploy more capital to that business when the opportunities present themselves.

And then beyond that, we'll look at buybacks, dividends, what we do in terms of leverage levels and/or evaluate the opportunity to hang on to capital to wait for a fat pitch in the future. So -- but going back to where I started, what underpins it all is having 2 really strong profitable cash-generative businesses. So we should have a lot of opportunities in the future.

We have a follow-up from Rowland Mayor of RBC Capital Markets. He may have stepped away. I show no further questions at this time. I'd like to turn it back to Mike Weinbach for closing remarks.

All right. Thank you, DD, and thank you, everyone, for joining us today. It's been great to be here in London with the Inigo team, and we're excited about what we're building together. And we appreciate your interest in Radian and look forward to speaking with you next quarter. Thank you.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Second Quarter 2026 Radian Group Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bob Lally, VP of Finance. Please go ahead.

Thank you, and welcome to Radian's Second Quarter 2026 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website at radian.com. This press release includes certain non-GAAP measures that may be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity.

A complete description of all our non-GAAP measures may be found in press release Exhibit F and reconciliations to these measures to the most comparable GAAP measures may be found in press release Exhibit G. These exhibits are on the Investors section of our website. Today, you will hear from Rick Thornberry, Radian's Chief Executive Officer; Mike Weinbach, Radian's CEO-elect; and Dan Kobell, Senior Executive Vice President and Interim Chief Financial Officer.

Before we begin, I'd like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections, and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For more information regarding these risks and uncertainties as well as certain additional risks that Radian faces, you should refer to the risk factors included in our 2025 Form 10-K as well as subsequent reports filed with the SEC. These are also available on our website.

Now I would like to turn the call over to Rick.

Thank you all for joining us today. Before discussing our second quarter results, I'd like to highlight another important milestone at Radian's strategic transformation. When we announced our agreement to acquire Inigo in September last year, we also outlined a clear strategic path forward, transforming Radian from a leading U.S. mortgage insurer into a global multiline specialty insurer, while divesting non-core businesses and becoming a more focused insurance organization.

Since then, we have successfully closed the Inigo acquisition and integrated the business into our organization and we have taken definitive action to complete the divestitures, including completing the sale of our real estate services business this week, entering into an agreement to sell our title business, and earlier this year, exiting the mortgage conduit business. Together, these actions have sharpened our focus on insurance, expanded our product set, simplified our portfolio, reduced organizational complexity, and delivered on the key strategic actions we outlined less than a year ago.

The Radian we are today is meaningfully different from the company that announced that strategy last year. Our mortgage insurance business, which has been the foundation of our company and a significant driver of value creation for stockholders for nearly 50 years, continues to generate strong earnings and capital. Combined with Inigo, we are now a stronger, more diversified and more focused organization with 2 complementary and uncorrelated insurance businesses, greater capital allocation flexibility, and access to broader growth opportunities across global insurance markets.

Most importantly, our team has executed on the commitments we made and positioned Radian for its next chapter of growth. The second quarter marked our first full quarter with Inigo and another important step for Radian as a global multiline specialty insurer. The financial benefits of this combination are already evident in our results. Total revenues increased 93% year-over-year to $575 million, while net earned premiums increased 116% to $504 million.

Our Mortgage Insurance business once again produced strong underlying performance and remains a powerful source of earnings, capital generation, and embedded economic value for our company. New insurance written increased year-over-year, reflecting continued strength in purchase activity, combined with the value of our proprietary data, and analytics capabilities and our deep customer relationships. Primary insurance in force reached a record $284 billion with persistency remaining strong, supporting the embedded value of our portfolio and future earnings generation.

Credit performance continued to reflect the quality of our insured portfolio and our team's unwavering commitment to disciplined underwriting. We are proud of the important role private mortgage insurance plays in the home finance marketplace by helping borrowers responsibly and sustainably achieve homeownership. Turning to our Specialty Insurance business. As I mentioned, this quarter marks our first full reporting period reflecting Inigo's contribution.

The specialty insurance business is already contributing meaningfully to the diversification of our revenue and earnings profile. During the quarter, our Specialty segment represented approximately 50% of total revenues and 53% of total net premiums earned during the quarter highlighting the scale and earnings contribution of our new business mix. The strategic value that the combination with Inigo brings to Radian is clear, reinforcing both the benefits and the opportunity ahead.

While the underlying specialty insurance portfolio continues to perform well, it is important to acknowledge that market conditions have become more competitive and rates continue to soften. The current rate environment is consistent with the cyclical dynamics we anticipate when underwriting the acquisition. The Inigo team is maintaining their focus on underwriting discipline and rate adequacy while also allocating capital to the most attractive opportunities. Our priority is profitability, not any particular revenue growth target.

We believe Inigo's diversified portfolio, strong analytics capabilities, unwavering commitment to strong underwriting and experienced leadership team, position the business well to navigate market cycles and selectively deploy capital to the highest value opportunities. At the enterprise level, our capital position remains a significant and core strength. The earnings power and capital generation capabilities of our businesses provides us with meaningful financial flexibility.

During the quarter, we continued to return capital to stockholders through both dividends and share repurchases, while maintaining the financial strength needed to support growth opportunities across the enterprise. As always, we remain focused on prudent capital management and creating long-term value for stockholders.

Before I turn the call over to Dan to review our financial results, I would like to invite Mike Weinbach to share a few thoughts. As many of you know, Mike recently joined Radian as CEO-elect and has already spent considerable time engaging with our employees, customers, investors, and business leaders across both the Mortgage and Specialty segments.

And I work closely together to execute a seamless transition of leadership. Mike brings significant industry experience, a strong leadership track record and a deep appreciation for the strengths that make Radian and Inigo unique, including the value of our talented and experienced teams. I'm excited about the future of this company under his leadership. Mike?

Thanks, Rick. First off, I want to share how excited I am to be a part of Radian, and I want to offer 2 things to Rick. One is my congratulations on all you and the team have accomplished under your leadership. Radian is a transformed company due to your vision, leadership, and execution. The second is my thanks. Having the opportunity to come in as CEO elect on June 1, where I could observe and learn before having to make decisions was a true gift. So thank you. Thank you. Thank you to you and your family who has had to wait a little bit longer for Papa to be your primary job.

And for my fellow investors, I'll expand a little more on why I'm so excited to be here. Radian Group, and I fully include Inigo when I say this, has great people, a great culture and great platforms. We have a leading mortgage insurance business led by a team with decades of experience combined with an excitement about asking how we can make the business even better. We have a leading specialty insurance business, which is stocked with experienced insurance experts who came together to build something new and better than what they had experienced at their prior organizations.

We're still early in that journey and the progress the team has made gives me great confidence in what lies ahead. I'm still learning and plan to take advantage of every minute I have with Rick while in this role, and when he continues as a strategic adviser to me and the Board into the future. But I'll go back to where I started. I'm excited, and you should be, too, about all the possibilities ahead for Radian and the talent we have to realize them. Rick, back to you.

Thank you, Mike. The team and I are thrilled to have you on board and as my tenure comes to an end, I look forward to what is ahead, and I'm confident in the future of Radian in your hands.

With that, I will turn the call over to Dan to review our financial results in more detail.

Thank you, Rick. I'm pleased to provide additional details about our second quarter results. On a GAAP basis, which includes the impact of certain one-time costs related to the Inigo transaction as well as non-cash amortization and purchase accounting adjustments, we generated net income from continuing operations of $0.87 per share with a return on equity of 10%. Adjusted net operating earnings per share grew year-over-year to $1.14 and adjusted net operating return on equity was 13% this quarter.

Our operating results reflect continued strong underwriting performance across both our Mortgage and Specialty segments, continued growth in investment income and disciplined capital management. The results also include the expected seasonal expense associated with our annual share-based incentive compensation plans as well as the establishment of reserves in our Specialty segment to reflect ongoing developments in the Middle East.

On a year-to-date basis, our adjusted net operating earnings per share has increased 12% compared to the prior year as we continue to see immediate financial benefits from the Inigo acquisition. We grew book value per share 8.5% year-over-year to $36. We also returned dividends to our stockholders over the past year that were equivalent to an additional 3% of book value. On a consolidated basis, our total revenues grew 93% year-over-year to $575 million, primarily driven by the revenue contribution from our specialty segment.

Our net premiums earned are now well balanced across our segments, with our Specialty segment accounting for 53% of second quarter net premiums earned. Our total investment portfolio of $7.1 billion consists of well diversified and highly rated securities. At an enterprise level, we generated $75 million of net investment income this quarter, an increase of 21% from a year ago, primarily driven by growth in balances.

Our investment portfolio has continued to be an important contributor to our earnings and the addition of Inigo's investment portfolio further enhances this strength. Turning now to the key drivers of our segment results, beginning with our mortgage segment. New insurance written was $16.3 billion in the quarter, an increase of 14% year-over-year. Persistency also remained strong in the quarter, increasing to 82%. Our large, high-quality mortgage insurance in-force portfolio grew 3% year-over-year to an all-time high of $284 billion.

As of the end of the second quarter, approximately half of our insurance in-force portfolio at a mortgage rate of 5.5% or lower. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term. Our in-force premium yield was stable this quarter as we continue to generate consistent premiums from our valuable mortgage insurance portfolio. Our mortgage provision for losses and related credit trends continue to be positive with strong cure activity and low claim levels.

We reported approximately 12,400 new defaults in the quarter, a decline of 9% from the prior quarter. Cure's once again exceeded new defaults this quarter, reducing our portfolio default rate to 2.47%. Our cure trends have also been consistently positive, meaningfully exceeding our initial default to claim expectations. This quarter, these favorable cure trends drove $20 million of favorable development from prior period defaults.

Consistent with prior years, our second quarter operating expenses in both our mortgage segment and corporate area reflect the timing impact of our share-based compensation plans. This expected seasonal item is the primary driver of the increase in expense in these areas compared to the first quarter of 2026. Importantly, underlying expense performance remained strong, with mortgage segment operating expenses declining 7% year-over-year and the mortgage segment expense ratio improving to 23% from 25% a year ago.

Now turning to our Specialty segment. Net premiums earned were $267 million, an increase of 9% year-over-year. In our specialty business, we continue to target opportunities to write attractive business across a range of insurance and reinsurance lines. As the environment has become more competitive, particularly in property insurance and reinsurance, the team remains thoughtful and disciplined in its underwriting approach, focusing on maintaining sound underwriting margins to drive profitability.

It is important to note that Specialty segment tends to exhibit meaningful seasonality and how premium revenue is recognized during the year. Earned premiums in the second half of the year are typically higher than in the first half. As shown in the Inigo quarterly results for 2025 included in press release Exhibit J. As a result, we anticipate second half earned premiums in 2026 to be approximately 20% higher than in the first half of the year.

Operating expenses in our Specialty segment were $39 million this quarter, in-line with the full-prior quarter. As noted at our recent Investor Day, Inigo's business was intentionally built with a simple and scalable operating model, supporting our ability to maintain an appropriate expense ratio through a softening market cycle. Total loss provision within the Specialty segment was $169 million, which included $24 million of favorable net development for prior period reserves primarily seen in property lines of business.

We are pleased that the acquired reserve portfolio has developed more favorably than expected since the acquisition. Consistent with our thoughtful approach to establishing reserves, particularly in cases with significant uncertainty, we've set reserves this quarter to reflect the ongoing developments in the Middle East. These reserves reflect both the expected and potential claims related to the ongoing conflict as well as updated inflation assumptions across our full insured portfolio given the related macroeconomic uncertainty and potential inflationary pressures associated with the conflict.

Our Specialty segment net combined ratio, which includes the impact of these reserves, was 98% for the second quarter. As we noted previously, we expect variability in our Specialty segment combined ratio over time and the impact on second quarter ratios from the Middle East reserving is elevated given the seasonally lower premiums in the first half of the year, as I noted earlier.

Over the first half of 2026, the specialty combined ratio was 93%, which is elevated due to the reserving for the Middle East developments as noted. Absent this item, the combined ratio in the first half of the year would be in the high 80s, which is consistent with our expectations heading into the year. As the market continues to soften, we expect to see generally lower underwriting margins in our Specialty business, which will gradually earn through to our reported results over time.

As a result, a combined ratio in the low 90s is more reflective of the current operating environment. As noted, the reported combined ratio in any specific period will be subject to some volatility due to market events. Additional details regarding our segments are available in press release Exhibit E. Moving to our capital, available liquidity, and related strategic actions. Radian Guaranty Inc. financial position remains strong.

In the second quarter, Radian Guaranty Inc. paid a $200 million dividend to Radian Group, our PMIERs cushion was $1.5 billion, significantly above the required PMIERs capital level. This capital buffer, combined with our current reinsurance programs, positions Radian Guaranty well to withstand and remain well capitalized through a potential severe macroeconomic stress. Our Specialty segment also remains well capitalized and continues to maintain a strong position relative to its regulatory capital requirements.

During the second quarter, our holding company received $19 million in distributions from our entities that were held for sale. Since we announced our divestiture plan last year, we have returned $127 million of capital from our entities held for sale to our holding company providing immediate liquidity and reducing the carrying value of those entities to $35 million as of the end of the second quarter. As we announced this week, we have completed the sale of our real estate services business in the third quarter and entered into a definitive agreement to sell our title services business.

While we have not disclosed terms of the transactions, we do not expect the total net asset value returned to our holding company as we complete the divestiture process to be materially different than the carrying value of these businesses as of the second quarter. As we approach the end of our divestiture plan, we are pleased with both the total value realized and the time to complete the process, both of which are in line with our initial expectations. As we move forward and continue to execute on our multiline insurance strategy, our robust capital generation profile and balance sheet strength continue to provide us with significant financial flexibility.

Our actions in the second quarter reflect our disciplined approach to capital management as we continue to return significant capital to stockholders while reducing our debt and growing our liquidity position. In the second quarter, we repurchased $76 million of our common stock or 2.2 million shares. In the third quarter to date, we have purchased an additional $50 million shares bringing the total year-to-date purchase amount to $176 million or 5 million shares.

We continue to believe that share repurchase provides an efficient and accretive way to return excess capital to stockholders, particularly as the shares trade significantly below our view of their intrinsic value. During the second quarter, Radian Group also paid a quarterly dividend to stockholders totaling $37 million. We also repaid $75 million of the draw on our revolving credit facility, reducing our holding company leverage ratio to 19%.

As of quarter end, we had $75 million outstanding on our credit facility draw, which we expect to repay during 2026. Net of these actions, holding company liquidity at quarter end increased to $412 million. We have increased our previous guidance for expected dividends from Radian Guaranty to Radian Group and now expect at least $650 million of total dividends during 2026, including the $340 million paid through the first half of the year.

I will now turn the call back over to Rick.

Thank you, Dan. Before we open the line for questions, let me summarize a few key takeaways from the quarter. First, our mortgage insurance business continues to be a source of strength across the enterprise, supported by high-quality risk selection, strong underwriting, favorable portfolio performance and meaningful capital generation.

Second, Inigo completed its first full quarter as part of Radian and continues to reinforce the strategic benefits of our transformation into a global multiline specialty insurer. Third, we remain focused on disciplined execution managing capital thoughtfully by allocating resources to attractive opportunities.

And finally, I would like to acknowledge our employees across the company, their dedication, expertise, and commitment to our customers are at the heart of our success. While we are still early in the next chapter for Radian, we are encouraged by the momentum across the organization and excited about the opportunities ahead.

With that, operator, we are ready to take questions.

[Operator Instructions] And our first question comes from Rowland Mayor of RBC Capital Markets.

I wanted to quickly start on the Middle East loss. I think based on your high 80s combined ratio comment, it was about $20 million. Could you maybe help me understand if that was a few large claims or a higher volume of small and medium claims, if we should expect ongoing pressures from that war?

Yes. Thanks, Rowland, for the question. So as I noted earlier, the combined ratio was 98% in the second quarter. So that included the reserving related to the Middle East, and that's both for the expected and potential claims related to the conflict itself as well as our updated inflation estimates given the potential for some additional inflationary pressure resulting from the conflict.

So I'll say the total of all those items in the second quarter was around $30 million, a bit higher than the number you provided. And again, that's inclusive of all of that for the Middle East. Excluding that, the combined ratio would have been generally in the mid- to high 80s. So consistent with where it was in the first quarter and generally, again, consistent with what we would have expected heading into the year. As far as the balance of the year, obviously, we feel like we're very well reserved as we sit here today continue to actively monitor the situation, but feel pretty good about where we sit relative to the reserves and what we know about the conflict at this point.

Okay. That's helpful. And then several P&C insurers are citing a spreading of competition beyond property lines. I was wondering if you could help me with the specialty growth in the quarter and whether you're seeing softening in casualty?

I think Rowland, this is Rick. Thank you for the question. We -- I think it's -- clearly, we're seeing the market continue to soften across the specialty and reinsurance business. I think -- and this is all part of what we anticipated as part of the acquisition, so these kind of changing market cycles. For us, the team won't really respond to any kind of specific opportunities that we're seeing.

But the teams remain very disciplined in how they go about kind of identifying those opportunities. I think the team is well positioned to go through it. And we've been -- continue to be very impressed by the experience and the approach and that discipline that the team is applying across the process. So, we're here to write profitable business and be selective where we can across the wide range of products that we focus on.

And I think when you think about the strategy here, it remains unchanged, and it's pretty straightforward. We won't sacrifice pricing or terms or expected returns to maintain kind of premium volume. So I think when you look year-over-year, the team has seen the opportunity to grow, continues to see attractive rate adequacy across the variety of products, continues to work closely with our customers to find those opportunities and kind of write risk where we continue to see value in that.

And so I think the summary of all that is that we continue to see opportunities in the market. We're being very selective, leveraging our analytics, remaining strongly committed to underwriting this business. One thing I would just highlight because I think it's important to note that I think the market has moved and is going to continue to move to where underwriting discipline matters more than ever.

And I think as we worked with the team, one thing that we've seen is the hard market rewarded participation, so you could be in a market and feel good about it because premiums got to such a level. But the next stage of the cycle is going to reward those who remain disciplined and allocate capital selectively and consistently prioritize margin over volume, which is what we plan to do and what the team has done since the beginning. So as the market evolves, I think our underwriting discipline positions us well. And I think that's the strength and kind of opportunities as we go forward. So the team is continuing to find opportunities across variety of classes of products, and we're going to continue to look for those opportunities as we go forward.

And just one more quick numbers one out of me, and I'll jump back in the queue. But you gave a guide on the specialty earned premium for the second half of the year. Does that 20% increase include the January result that was not part of your consolidated results?

Good question, Rowland. And the answer is yes, it does. So if you take the full 6 months of the first half of the year, and we provided that in 2 different places in our press release, take that full 6 months as a baseline, it's 20% on that number is what we'd expect for the second half of the year.

Thank you, Rowland, for that helpful clarification. I appreciate that.

Our next question comes from Terry Ma of Barclays.

Maybe just starting out with specialty. I think I heard you say a combined ratio of low 90s is more reflective of the current environment. Maybe just expand on that. And then longer term, should we expect the combined ratio to migrate back to the high 80s?

Yes. Thanks, Terry, for the question. So in terms of the combined ratio, so I mentioned in my prepared remarks, we'd expect to see kind of the business where we're writing business where we see the market today, kind of expected combined ratios in the low 90s. I think that's coming after several really strong years of performance. And so it's kind of the impact of the expected softening that we've seen across the market.

And so we kind of see -- if you look back at the results we provided for Inigo's business over their history, it's kind of been more mid-80s, trended to high 80s, and now you're kind of seeing that into the low 90s. And again, that's just part of the normal cycle that we'd expect and what we anticipated, as Rick mentioned, when we made the acquisition. So I think that's, again, consistent with our expectations as we sit here today.

Again, just pairing that guidance with a reminder of the seasonality from a revenue perspective that we'd expect to see the second half of the year premiums, again, 20% higher than the first half of the year. So I just want to make sure you kind of take both of those factors into consideration when you think about the near-term kind of underwriting projections for that business. And again, combined ratio, obviously, is going to be subject to some volatility from quarter-to-quarter just based on market effects.

Yes. And I would just -- I think -- as you think about this business going forward across a variety of different cycles, going back to what I kind of said just a few minutes ago, the discipline from an underwriting and value kind of focus from a profitability and rate adequacy point of view through those cycles is important. And so over the long -- you can look at this business over the long term in terms of kind of long-term combined ratios with some volatility through it.

The one thing that we feel very confident in is our team's ability to kind of navigate those cycles effectively and again, to find value kind of from a performance point of view, to kind of navigate through those cycles. So we feel very confident in that. And I think what we're doing is just trying to provide some view of kind of where we are in the cycle at this point and how the team is navigating it.

Got it. That's helpful. And then maybe just switching gears, talking about credit for MI, just any color on the cure rate trends that you're seeing, Slide 16 that you guys have in your deck still show pretty favorable trends overall like across vintages. Do you expect that to continue as you get more of the recent vintages start to peak?

Yes. Thanks, for the question. So I think when you look at that slide, again, as you can -- as you noted, you can see that cure development has continued to be very strong and very positive over time. I think when you look at that, that schedule covers multiple years and as a result, it kind of already reflects a little bit of newer vintages working their way through in the portfolio. And I think around that, you can probably see on the margins, a little bit of a change in terms of some of that cure development path from quarter-to-quarter.

But broadly, we continue to see that very strong and certainly favorable to our reserving assumptions. So again, we're effectively reserving to a 92.5% cure rate, and we're getting to that level and beyond pretty consistently across all of those default cohorts. So we continue to see very strong activity even as kind of the newer business kind of works its way into the portfolio. And generally, from a credit perspective, we don't see any pockets of concern when we look at it at a credit metric level, kind of from a geography perspective or across vintages, we continue to see everything play out in line with or better than our expectations when we price the business.

And our next question comes from Mihir Bhatia of Bank of America.

I wanted to start on the specialty insurance piece, maybe just I guess, you continue to describe the rate conditions as softening. You also suggest the low 90s combined ratio remains achievable. Can you just help us understand where the pressure is greatest today and whether your expectation is for future earnings pressure to come from lower margins or just lower premium growth?

Yes. Thank you, Mihir. That's a great question. I think, look, as we sit here today year-over-year, I think we -- our net earned premiums were 9% up year-over-year. So that's indicative of the team continuing to find opportunities in a competitive market. That's the one benchmark, I think I would kind of highlight for you. As we go forward, and Dan can comment on this as well, too. As we think about the combined ratio, we're really -- we're looking at the remainder of the year.

And as Dan highlighted in his comments and then his responses a minute ago. We seasonality on a revenue basis generally leans towards the third and fourth quarter to be higher than the first half of the year. I think Dan's number was 20%. When you think about writing the business at technically lower margins than previous years from a rate perspective, but still an attractive rate adequacy and pricing and returns on capital. We would expect the combined ratio to migrate up.

Beyond that, we're not really giving any guidance, but I think we're in a softening market. We anticipated that as part of our M&A transaction and kind of our analysis of kind of a through-cycle view of the business. And I have to just compliment the team, again, as we've worked with them closely over the last year. One of the things that we liked about the business was the experience of the team and their ability to kind of adjust and navigate through cycles and find value.

If you think about what's like our MI business, where in our MI business, we don't focus on market share, particular growth targets, we focus on finding economic value. The specialty business, Inigo business focus is very similar in the sense of really looking to find those opportunities across markets, both in hardening markets and soft markets where the returns are most attractive.

And I think they continue to demonstrate that. And I'm very proud of how the team has shown that resiliency through this year, navigating it again. But I think it's kind of reflecting back on Dan's comments, I think we feel like the business is in a good position and created some transparency around that.

And Rick, congratulations on your upcoming retirement, I guess, and Mike congratulations again on the appointment of CEO. If I could ask your question, Mike. Just after spending the last 2 months at the company, maybe talk a little bit about the biggest thing you've learned that was maybe a little different from your perception before you were on the inside as it were? Like what's been new, different, maybe some of the learnings you've had so far?

Yes. Thanks, Mihir, for the question. And the one thing I'll start with, which wasn't a huge surprise that from the outside looking in, I saw a company with really good people, good culture, good platforms, and it totally lives up to billing. Again, I said this at Investor Day, I kind of upgraded it. It really is great people, great culture, great platforms. And I'm excited as I look to the future because and Rick talked about this a little bit upfront.

But if you just think about where Radian is -- the Radian that is going to be entering 2027 is going to look very different than the Radian that entered 2026. It's a year of transformation transition with me and Rick, the acquisition of Inigo, the sale of our non-core businesses, but we have a company where the revenues will have effectively doubled from where they were coming into the year, the revenue generation capability with double-digit accretion to EPS and maybe more importantly, a simpler and more focused company, the 2 core insurance businesses, MI, and specialty insurance that are not correlated, but have at their heart, the use of data and analytics to outperform the market.

And the company is going to continue to generate excess capital, and we're going to have a lot of opportunities to deploy it. So were there surprises, I don't know that there were any surprises, there's certainly been a lot of learnings. So I'd say, as I've gotten a closer look at the MI business, it's a business that's performing I really do understand the strength in the way we deploy data, analytics, and risk management capabilities and feel really great about the way we're participating in the market.

But that also doesn't mean we're satisfied. We recognize we have opportunities to be more efficient. There's opportunities to take advantage of emerging AI technologies to be faster and obviously take our data and analytics to an even higher level. And at Inigo, and of course, had the opportunity to spend time with the team in London and spend time talking to brokers and customers and others in the market and I see this and I sort of get the validation from the marketplace, this is a really experienced team that's managed through different cycles and is built to focus on finding opportunities to deploy capital for strong risk-adjusted returns.

It is -- we look at returns overgrowth-- we do this across 17 different lines that we write today, and we think there's still room for growth. So -- and this is a little bit of reiterating some of the points that Rick and Dan have made. But we don't have to grow like we'll pull back in a softening market where we don't see the returns, but we're going to continue to lean into areas where we believe pricing remains adequate and where our underwriting expertise provides a competitive advantage. And we still see opportunities to grow to new lines and have new partnerships in other areas to drive growth. So maybe a little bit of a longer answer than you were looking for, but I appreciate the question and remain extremely excited about the path ahead.

Yes. Mihir, thank you for all wishes. I appreciate that. But I want to tell you, as a shareholder in this business, I'm excited about the future with Mike. And I've had the chance to work together. We've known each other for a long time. But we had a chance to work together with the team over the last 2-plus months. I think the transition has been seamless and positive and I think really kind of sets the company up for the future. So I'm excited about it. As a fellow shareholder, I think as you said in your comments.

And our next question comes from Bose George of KBW.

This is Graham Bundy on for Bose. You all touched on just earned premiums growing 20%. And in the second half there. Could you help me understand how expenses are the trends there are staying relatively flat?

Yes. Thanks, Graham, for the question. Are you referring to expenses in the Specialty segment?

Yes.

Yes. So in terms of the expenses there, there's a component that's related to acquisition costs that will fluctuate more and directly with earned premium. So you'll see a change there. And that's probably that combined ratio guidance that I provided earlier and then there's a portion that's a little bit more fixed quarter-to-quarter and that we'd expect to be generally more stable. There's going to be some investments there for growth, obviously. But I would say the expense trend is all part of the combined ratio guidance that we provided of the low 90s for the second half of the year.

Okay. Awesome. Very helpful. And then jumping to repurchases here. Could you guys just help us from a modeling perspective, what we should be expecting in the second half? I know with the Inigo acquisition in the first half, originally, you all thought it would pause a bit, but then with good opportunity there, you guys picked right back up. So what can we expect in the second half year?

Yes, sure. And so we were definitely pleased to restart the share repurchase program when we did very quickly after the Inigo acquisition closed effectively in the first quarter of this year. And so we're very pleased with the repurchase that we've done to date. As we sit here, we're at $176 million of share repurchase to date for 2026. I did provide guidance last quarter that we'd expect a range for the full year of between $200 million to $250 million. And so we're tracking very well, obviously, against that range.

As we sit here today, based on the activity and what we've done so far, I would expect us to be more towards the upper end of that $200 million to $250 million range. Of course, that is subject to market conditions and what happens between now and the end of the year, but that's a pretty good feel for where we'd expect to finish 2026 in terms of share repurchase.

And I would just add to Dan's comment that if you look at our track record over the last several years is our discipline around allocating capital, whether it's our dividend, whether it's our share buybacks not to mention a major acquisition, which we did within our whole balance sheet, which you see the accretive nature of that transaction.

This quarter really kind of the revenue growth, earnings contribution opportunity ahead and the opportunity, as Dan highlighted, to accelerate our share buybacks this year, the debt repayment. We've been de-leveraging over the last year or 2 years, I guess. So it's been -- we've been very active capital managers. I know under Mike's watch going forward, that is a key part of his thesis as well. And so I think you'll continue to see us take advantage of our capital resources in the most attractive way.

Yes. And the one piece I'll just add on to what Rick said, too, is what's given us a lot of the confidence and the ability to kind of execute on those capital management initiatives has been the visibility that we have into the dividends that are coming up for Radian Guaranty. So we -- at the beginning of the year, we noted that we expected $600 million or more of dividends coming up. We've just updated that to now $650 million or more for the full year 2026. And again, that increase is reflective of continued strong performance of the underlying mortgage business. The earnings of the mortgage business is effectively what drives that dividend capacity. So we continue to see that trend very well for us.

And we have a follow-up from Rowland Mayor of RBC Capital Markets.

I wanted to just quickly go off that buyback question. Could you maybe walk through the remaining liquidity draws with the revolver and debt? And then once those are completed, do so we assume that the capital, there's a lot more free capital available for buybacks?

Yes. Thanks, Rowland, for the question. So as we sit at the end of the second quarter, we had a $75 million balance on the draw that we took on the revolver. So again, our expectation is and has been throughout the year that we'd expect to pay that down by the end of 2026. As far as the debt maturity that we have coming up in 20 -- in the first quarter of 2027, we noted in the past, currently, our expectation is that we would look to refinance that.

We'll certainly evaluate that as we get closer and we have the flexibility to kind of address that in different ways, but expectation is that we would refinance that at a similar size to what exists today. So I think your question is correct in the sense that in the world where we're not paying down a credit facility draw, and we continue to have a similar level of dividends coming up from Radian Guaranty that would create additional flexibility for us from a capital management perspective.

And again, that goes back to the regular waterfall that we have, which I talked about at our Investor Day in terms of making sure we're supporting the organic growth of our businesses and then looking at other options, whether it's de-levering accretive M&A or potentially returning capital to stockholders, and we do that today through both the quarterly dividend and then opportunistic share repurchase.

And then just one more and then I promise I'm done. I want to make sure I didn't mishear the Middle East commentary. That $30 million provision you took in 2Q includes IBNR for potential future events? Or should we expect ongoing losses as the conflict continues?

Yes. So I would say that's a fully loaded number there. It includes what we what we expect and potential claims related to the conflict based on what we knew as of the end of the second quarter and along with the related item, which is the inflation adjustment based on the potential pressures that the conflict might have created.

I'm showing no further questions at this time. I'd like to turn it back to Rick Thornberry for closing remarks.

Thank you. Appreciate that. And once again, thank you to everybody for joining us today. Before we conclude, I'd like to thank our employees across Radian and its businesses. Throughout my time as CEO, I have been continually impressed by the talent, dedication, and professionalism of the teams. Their commitment to serving our customers and delivering for our stockholders is what has made our success possible. I'd also like to thank our customers, business partners, and stockholders for the trust and support they have placed in us over the years.

As I reflect on my time leading this company, I'm incredibly proud of what we've accomplished together. We have built a stronger, more diversified organization, created a platform for the future growth and position Radian for long-term success. Most importantly, with Mike's leadership and exceptional leadership team, outstanding employees and a clear strategy, I'm excited and confident in the future of this company. It's been a privilege to serve as your CEO. Thank you for your support, and thank you for the opportunity to be part of this remarkable team and company. Thank you.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good morning, everyone, and welcome to Radian's Investor Day. We have a great audience here today. So thank you very much. We're pleased to have you with us both here in the room and joining via webcast. On behalf of the entire management team, thank you for being here and your interest in Radian.

Before we jump in, let me quickly cover a few important items. Some of the statements we make today will be forward-looking. These statements as well as Radian's prospects are subject to certain risks and uncertainties. I encourage you to review the safe harbor statement at the end of today's presentation for more detail. We'll also be discussing certain non-GAAP financial measures. Reconciliation to the most comparable GAAP measures are included at the end of the presentation and also available on the Investor Relations section of our website.

Finally, for those in the room, I'd appreciate if you take a moment and silence those devices. I'm also have to tell you guys about the WiFi password, because everybody keeps asking. WiFi is the St. Regis Conference. The password is banquets2026. Everybody got that?

Little B?

Little B. Little B. Okay. So let's talk about what we have planned for today. We put together a full and engaging agenda for you this morning. You'll hear directly from our CEO, the co-heads of our Mortgage Insurance business; the Inigo team, our CFO and our CEO elect. At the end of these presentations, you should understand why we are so excited about our business, the opportunity in front of us and what truly sets Radian apart.

We'll have a dedicated Q&A session specifically for our specialty insurance business, following the Inigo presentation. For those here in-person, if you have a question, you can raise your hand and we'll bring a microphone to you, where you can submit questions at any time at the iPad at your seat. For those joining virtually, questions can be submitted through the webcast platform throughout the session. Remember today, guys, we want today to be interactive, so I encourage you to ask the questions on your minds. If we aren't able to get to your question, we will follow up with you after Investor Day.

Just a few more items before we get started. We'll take a short break following the Inigo presentation and prior to Q&A, and then a lunch break at approximately noon. For those here, please enjoy lunch and take the opportunity to mingle with our team. Our program will resume at 12:45 for a fireside chat between our CEO, Rick Thornberry, and our CEO-elect, Mike Weinbach. Lunch and the fireside chat, we'll wrap up around 1 p.m. At that time, we invite our in-person attendees to enjoy coffee and dessert and continue to meet and mingle with members of our Radian's management team.

Okay. So let's get started. Please join me in welcoming Radian's Chief Executive Officer Rick Thornberry to the stage.

Well, great crowd here. So thank you all for joining us today, both in the room and on the webcast. We appreciate you being here as we share how Radian is moving forward as a global multi-line specialty insurer. Today is about giving you a clear view of our strategic focus, our businesses and how we are positioning the company to generate long-term value.

Before we begin, I also want to just take a moment to acknowledge this will be my final Investor Day as CEO. As I recently announced my plans to retire later this year, and it's been an honor and a true privilege to lead this company for nearly a decade. And I cannot be more excited about the strength of the team and the strategy and the path ahead. We believe Radian stands stronger, more resilient and with a broader opportunity set as compared to any point in our history, and we're excited to walk you through that today.

Okay. With that, it is my pleasure to welcome CEO-elect, Mike Weinbach to Radian. I've known Mike for nearly a decade, and I'm very excited to pass the leadership of Radian and this great team to him in August. Mike joined on Monday. And he and I are focused on a seamless transition over the next couple of months. As the business moves forward, I'm confident that he will continue to shape and execute our strategy as we evolve as a global multi-line specialty insurer. He is a proven leader, brings deep experience and a strong strategic perspective on how we deploy capital and position the business for growth. I am confident that he is the right person to lead Radian into the future.

Now Mike, over to you. Please join me on stage.

Thanks, Rick, and good morning, everybody. And I want to join Rick in welcoming you to the Radian 2026 Investor Day. We're really excited you're here. We're really excited to have the team share the story with you. And I'm excited to be joining the company at this transformational time in our history. I've known Rick for a good amount of time, and I followed Radian from the outside and got to know the Board, got to know Richard, other members of the management team. And what I saw from the outside was a really good company with a good culture, and importantly, a good platform for growth and capital allocation.

And yes, it's day 4. It feels like a lot longer because that is the announcement even before I've been getting to meet people across the company and dig into the businesses a little bit. And I'm ready to upgrade the company it is great people. It is a great culture. And it is really a great platform for growth and capital allocation. And I'm not going to steal the team's thunder, they're going to share the story with you. But I would encourage you if we haven't met, I would love to meet you. I would love to hear your feedback. Let us know how we can help better tell the Radian story. And as Bob mentioned upfront, I'll be back with Rick later to share some more thoughts. But I'm going to turn it back to Rick and the team to share our incredible story. So thanks, everyone.

And just so you don't miss it, as we mentioned, we're going to come together again later today after lunch. I think at 12:45 is the expected time to do a fireside chat without a fire. All right.

So before we get started, I'd like to recognize Herb Wender. Herb Wender, who we are fortunate to have here with us today, Herb's decades of leadership, you told me you were coming Herb. His decades of leadership, including many years as Chairman and the person who I think of as the founder of Radian, helped guide the company through multiple cycles, and shaped the strong foundation that we continue to build on today. So we're honored to have him with us today. So thank you, Herb.

Today, you're going to hear from several members of our team about how we operate as a global multi-line specialty insurer, deploying capital across a high-performing mortgage insurance business and a specialty business. How we leverage our strengths and core competencies across our multi-line insurance businesses to execute our strategy and serve our customers and how we approach the execution of that strategy. You will also hear today from our mortgage and specialty insurance businesses how we are positioned, and why we believe Radian Group stands stronger, more resilient and more promising than at any point in time in our history. Throughout the day, you'll hear how we believe this combination of skills and capabilities allows us to focus on what we do best strategically managing capital to generate earnings and build stockholder value.

Okay. For those of you who are new to our story or who may be thinking of Radian 6 months ago, let me start with who Radian Group is today and why we are built for the future. First, we are built on strength. A solid foundation that has been built over nearly 50 years. Second, we're built with purpose, two complementary uncorrelated businesses with a diversified set of products, each executing their own business plans and generating their own earnings. With capital diversification and optimization that we believe allows the combination to be greater than the sum of the parts. Third, we are built for global reach. Our specialty insurance business expands our access to a large and diversified global market. And finally, we're built for value creation, aligned behind one clear strategy focused on creating long-term value for all our stakeholders.

So this slide captures the framework of our business construct and our strategy as a global multiline specialty insurer. At our core, we are a nearly 50-year-old market-leading mortgage insurance business with a large in-force portfolio that we believe has significant embedded value. Our mortgage insurance business is not just our heritage. It is our strength, our foundation and the engine that powers everything else we do.

The recent addition of Inigo, a 6-year-old highly successful entrepreneurial specialty insurance business with a highly talented team has catapulted us from a monoline mortgage insurance business company to a global multi-line specialty insurance business. The addition of Inigo significantly expands our addressable market in terms of product lines, geographic markets and customers, and as such, provides new opportunities for growth and success. Importantly, it provides us with the strategic platform to consider further expansion across the P&C market.

While our mortgage and specialty insurance business operate independently, each executing their separate business plans, at the center of our strategy is a shared and aligned operating philosophy related to the use of proprietary data and analytics to develop our independent view of risk and price appropriately. An unwavering commitment to disciplined underwriting, our long-standing track record of strategic capital management and a deep-rooted and culturally ingrained commitment to serving our customers' needs. And I think what I believe ultimately drives our success, our world-class teams operating with a value based -- within a value-based culture that fuels innovation and the execution of our strategy. These are core enterprise strengths that are not specific to the business, and we leverage them to build our business. Together, the combination of the two complementary businesses, executing one strategy is why we believe we are built for the future and positioned to enhance our earnings quality, expand opportunities and improve flexibility through the cycle.

This slide speaks to the foundation of our story. Since 2017, we have consistently grown adjusted book value per share, including accumulated other comprehensive income and dividends by more than 3x at a 15% compounded annual growth rate. We did this across multiple economic environments, including periods of rising rates, declining rates, economic uncertainty, housing stress and significant market volatility. The key takeaway here is our track record of growth. This reflects how we have achieved our goal of managing capital to generate earnings and build value over time across market cycles. This is the foundation that we are building on going forward with the addition of Inigo.

Now let's look at that track record for growth in book value per share has translated into total stockholder return. We've delivered 241% TSR over the past decade. Despite these attractive results, we believe the value of our business has yet to be fully recognized, creating a compelling valuation starting point.

This slide reinforces that point. Over the past 3 years, we've delivered strong operating performance and attractive returns on equity. When you look at how we are valued today relative to other benchmarks, particularly on a price-to-book basis, we believe it represents an attractive entry point. One does not fully reflect the quality of earnings, the strength of our MI business or the value that Inigo adds to Radian Group. We see a clear opportunity for investors, one that we've been actively utilizing through our own share repurchase activity over time. And the path to realizing that opportunity is exactly what you're going to hear about today.

[Audio Gap]

We've always been focused on operating a simple but powerful formula. To serve our customers, underwrite risk well, manage capital carefully and deliver to stockholders. As you've seen that discipline has resulted in a track record of success that we're proud of. Along the way, we have focused on the goal of managing capital strategically with financial discipline, focused on generating high-quality earnings and building long-term value. We believe the combination of these two businesses significantly improves Radian's return profile, presenting an attractive value opportunity for stockholders going forward. It is the opportunity for increasing value created by disciplined capital management that we are focused on. Simply said, at our core, we're focused on managing capital to generate earnings and build value.

So execution is where strategies succeed or fail. So let me be specific about how we deliver on ours. We execute our strategy through a simple and straightforward set of focused priorities. Think of it as Radian's strategic value bridge. First, we optimize our MI foundation. Our Mortgage Insurance business is a proven capital generative business with strong embedded value that provides a solid foundation. We are focused on improving operational efficiency while also leveraging our proprietary analytics to construct a highly valuable insurance portfolio. Meghan and Steve will cover our approach to our MI business in a few minutes.

Second, we're focused on profitably scaling our specialty insurance business through effective cycle management. The business is based in London and operates as a stand-alone business within Radian with the team retaining their strategic focus and culture. The addition of Inigo helps us expand our market reach, into a global uncorrelated -- into global uncorrelated markets where disciplined underwriting and proprietary analytics and assessment of risks are expected to drive attractive returns. Richard and team will cover our approach to our specialty business in a few minutes.

Third, we manage capital by deploying it dynamically across our businesses. We do this by directing capital to the highest return opportunities across businesses, across products, across cycles, focused on building value. And Dan will cover our disciplined approach to capital management in a few minutes.

Fourth, and you're going to see this in the room. We build and invest in the talent and capabilities of our world-class team, because execution ultimately comes down to having the right people, with the right expertise and the right -- making the right decisions. And finally, we do this all to deliver consistent results over the long term. Together, these strategic priorities are designed to reinforce one another. And importantly, they are what position us to deliver both stability and growth, not choose between them. This is how we believe our approach to executing our strategy translates into attractive risk-adjusted returns, enabling us to manage capital to generate earnings and build value over the long term across market cycles.

So as we sit here today, the setup is strong and the position as a global multi-line specialty insurer is in place. The North Star and the strategy are clear. And you will hear that the team is highly focused and execution is underway. Today is about showing you how this all comes together. And importantly, that we are built for the future which is bright with possibilities. We're excited about what we are building, and we believe the best is still ahead.

So let's get started. I'd like to invite Meghan Bartholomew, Senior Vice President -- Senior Executive Vice President, sorry. Senior Executive Vice President and Co-Head of our Mortgage Insurance business to the stage.

Good morning. I'm Meghan Bartholomew and Co-Head of Mortgage Insurance, along with my colleague, Steve Keleher. I've been with Radian for 24 years starting in capital markets and spending a majority of my career here in risk management. This background gives me a particular lens on how we think about the portfolio we are building and the risk we're managing. Steve and I have collaborated closely for over 15 years. And throughout that time, we've been deeply engaged with the teams that we have the privilege of leading.

What you'll hear from us today is not a change in direction. It's an acceleration. We're going to walk through -- we're going to walk you through the structural tailwinds behind our business. how we think about building and managing our portfolio for maximum value and why we believe Radian is uniquely positioned to outperform in this market.

First, the fundamentals are in our favor. Demographic demand and constrained housing supply create a durable backdrop for new insurance generation even in a higher rate environment. Second, we believe we have a meaningful competitive advantage in how we view and select risk. Differentiated modeling, pricing and customer analytics, mean we're not just writing volume. We're building a portfolio that generates attractive returns over the long term. Third, technology and AI are sharpening our edge. We're enhancing underwriting, improving cycle times and deepening customer insights, allowing us to scale intelligently while staying disciplined. And finally, underpinning it all, we are built to perform through market cycles. Our disciplined approach to capital risk and portfolio construction ensures resilience in any environment.

Let me spend a moment on the demand backdrop, particularly the role of the first-time homebuyer, which is central to our business. First-time homebuyers represent about 21% of total home sales. But importantly, for us, they account for roughly 60% of purchased loans with mortgage insurance. They are core to our franchise. I can tell you that despite some reports, the American dream of homeownership is alive and well. People want to own a home. What we're seeing, however, is a delay in the age of the first-time homebuyers compared to prior periods. The median age of a first-time homebuyer is now 40, the highest on record, affordability and supply constraints are pushing buyers to wait longer to enter the market.

They are not walking away, and the demographics are compelling. Millennials now in their prime home buying years are the largest adult generation in America. That demand isn't going away, it's building. This is exactly where mortgage insurance plays a critical role in preserving the American dream of homeownership. While the demand to become homeowners is undeniable, affordability challenges make it harder to save for large down payments and MI provides a path for these borrowers to buy a home sooner without waiting years to accumulate additional savings.

So when you connect the delayed but persistent demand and a product that directly addresses affordability, it reinforces that what we expect to be a durable tailwind for our business. The supply picture reinforces that tailwind. Constrained inventory and strong demand during the pandemic helped drive double-digit increases in home prices. During that time, existing and new single-family home inventory for sale declined to an average of 1.3 million units down from 1.9 million in 2010 to 2019 and 2.3 million from 1990 to 2009. We've started to see some inventory come to market in the past few years and the average of homes available for sale reached 1.9 million in April of 2026. This persistent housing supply shortage promotes strong demand and keeps home prices elevated at a time when saving for a down payment is viewed as the most significant barrier to homeownership, and it underscores the importance of mortgage insurance, providing access to mortgage credit for low down payment mortgages.

As a refresher on mortgage insurance and our mission in the housing space, I want to ground us in a few metrics that highlight just how critical this industry is, especially for Middle America families facing today's affordability challenges. Since 2018, Radian has helped 1.5 million families achieve homeownership. When we look at who we serve, roughly 60% of our borrowers are first-time homebuyers and over 1/3 have household incomes below $75,000. These are families trying to enter the market at a time when affordability is such a challenge. Mortgage insurance plays a pivotal role here by enabling borrowers to purchase a home with less than 20% down, helping them enter the market sooner and begin building equity earlier in their financial journey.

Before we go further, it's worth acknowledging how much the mortgage insurance industry has changed since the great financial crisis. We're serving high-quality borrowers under far more stringent underwriting and loan product standards. PMIERs, the Private Mortgage Insurer Eligibility Requirements has strengthened our capital and operating framework, and we now actively distribute risk through reinsurance and other credit risk transfer mechanisms. Our pricing is dynamic and much more granular. Servicing standards, they simplify the loss mitigation options and help keep borrowers in their homes. And today's Master Policy brings greater clarity and consistency. This is a fundamentally stronger, more resilient industry and that matters when we talk about performance through the cycle.

Mortgage insurance is a critical pillar of the housing finance system, not just for borrowers, but because of the private capital we deploy as first loss protection to lenders, Fannie Mae, Freddie Mac and ultimately, taxpayers. We are deeply engaged in Washington, D.C., ensuring policymakers understand our product, recognize our value and represent our voice in policy discussions that shape housing finance. We come to these conversations with credibility as the risk taker through the cycle with decades of mortgage credit underwriting expertise to promote a safe, sound and resilient system. Radian is viewed as respected and a constructive stakeholder in these conversations with strong channels of communication that ensure our perspectives are part of the discussion.

I'm going to transition here to highlight our focus on our customers and how we deliver value through our technology platforms. Radian does business with over 1,000 lenders. We support lenders, all institution types and lenders of all sizes. Each is in their own -- each is in a different place in terms of their technology journeys and we have developed our processes to deliver a best-in-class customer experience for all of them through our digital platform. We deliver real-time pricing to lenders every day, an efficient and scalable mortgage risk transfer mechanism for lenders.

Radian has been consistently investing in the MI business with a focus on improving how we use our significant data to drive efficiency and improve our credit risk management functions. We innovate, we're agile. We engage with our lenders, our servicers and other stakeholders to see where the market, AI and technology are going so that we meet our customers where they feel most comfortable operating.

As with all technology discussions, examples are helpful. An excellent example at Radian of automation and streamlining our processes is our intelligent data platform or IDP, a proprietary Gen AI solution developed internally by Radian. IDP automates document processing end-to-end, including classification, indexing, data extraction and data validation. It has customizable user interfaces tailored for different workflows and skill-based routing. And because we build it ourselves, we have flexibility to quickly and easily adapt adjusting the user interface, adjusting the routing logic or even the underlying large language model. There are night and day differences between building an IDP and prior software development initiatives where we had to rely on and customize third-party technology. IDP's accuracy in terms of document recognition and data extraction is consistently improving. Adding new documents takes days, not weeks and our lean business and technology teams are partnering to improve and scale the use cases.

IDP feeds directly into our underwriting model. We combine MI application data, data extracted from documents through IDP and third-party data and analyze all of it prior to an underwriter picking up a file. Our risk-informed underwriting program automates data comparison confirms whether application data is supported by the loan file and uses underwriting rules to assess file complexity and flag exceptions. The result, our underwriters spend their attention and time on high-value activities and not on routine data verification, driving faster underwriting cycle times. Since 2020, our average underwriting time has dropped by 34%, which supports higher throughput and quicker lender response times. This process automation drives overhead cost reduction and efficiency gains and enables Radian to handle higher volumes without proportional staffing increases.

And at the same time, risk and quality control validations are embedded throughout our processes. Our quality control team will flag if adjustments or improvements are necessary. We've learned over time that the most common issue is that we didn't automate an activity that could have been automated and we'll adjust, so we don't miss that opportunity on the next file.

In closing, I've shared how we modernized underwriting with advanced data extraction and comparison tools. But we apply automation with discipline. Quality controls and expert oversight ensure that we automate the right steps. And our experienced underwriters are inserted precisely where their judgment is essential.

And now I'll turn it over to Steve to share how we build and manage our MI portfolio.

I'm Steve Keleher, and I'm a Senior Executive Vice President and Co-Head of Mortgage Insurance. My background has primarily been centered around mortgage credit. And my focus at Radian has been on our portfolio management and pricing, our data strategy and some of our operational functions. Prior to Radian, I worked at Freddie Mac and as a consultant at RiskSpan, both focused on U.S. mortgage credit. I'm happy to be partnering with Meghan as we know the business, we know this team. And we have shared conviction about where we're taking it.

You just heard from Meghan how Radian supports the U.S. housing system, some of the tailwinds that are favorable for our business and how we are leveraging best-in-class technology to efficiently serve our customers.

What I'd like to do is walk you through how we maximize the value of our portfolio, including what we focus on, how our approach works and the evidence that it is delivering results. For those of you who joined us at our 2023 Investor Day or who have listened to our quarterly earnings calls, some of what I share today will look and sound familiar. That's because although we are agile on how we pursue our strategy, our strategy itself remains quite consistent.

I'll start with what we're focused on, and that is maximizing the economic value of our portfolio. So what exactly does that mean? What I'm referring to here is the projected amount of future earnings on deployed capital, less the cost of holding that capital. With respect to new business, it's determined by the capital required to support the volume we write. So the equations at the bottom will start with the complex ones. So that's the new insurance written times capital, very important the capital piece, not just the new insurance written.

The second piece is how long that capital will be outstanding, so that's the duration piece. And the third is the returns we generate in excess of our cost of capital is the piece off to the right. So essentially, net income minus cost of capital. That's a simple version. This is the vision for our MI business. We leverage our analytics and our approach to pricing to identify and acquire new business with the highest economic value. We believe our ability to write an outsized share of economic values compared to our competitors is unique and not easily replicable and it's ultimately how we generate alpha in the mortgage insurance industry.

So how do we do this? We've developed a suite of analytical tools and models, which we leverage when it comes to pricing and portfolio management. This is a process that continually adjusts as the market changes and our view evolves. The foundation of our approach is our assessment of risk. We use our proprietary model, RADAR, to project loan performance through a simulation of future economic paths and then calculate the premium rates for each granular market segment that would be required to achieve a risk-neutral return. This, of course, varies by many things. It varies by credit attributes, things like loan-to-value ratios, credit scores, debt-to-income ratios. As an example, a policy with a 90% loan-to-value ratio is projected to generate higher losses as compared to one with an 85% loan-to-value ratio, and that 90% LTV is going to require more capital to be held for a longer period of time. The higher-risk loan, the 90% LTV, would obviously require a higher premium to generate the same return.

This also varies by lender due to performance differences and differences in expenses and it varies by geographic region, given the differences in economic trends, and I'll touch more on that in a moment.

Our risk assessment and projected performance is just the start, though. Today's price-driven market requires that we continually monitor the competitive landscape to understand where the market clearing rates are as this information is a critical input to enable our pricing model, SONAR, to optimize our pricing for maximum value. An example I've used in the past is that fundamental analysis may indicate that a particular stock is worth $100 a share, and that may be the true value. but you wouldn't know if you're a buyer or a seller, unless you know what the market price is. So we have a very strong focus on this part of this process.

And things are constantly changing, whether it be our views on the future economic environment at a local level, our loan performance projections, market pricing. And that's why we built our process to identify these changes and quickly adjust accordingly. Mortgage insurance pricing is primarily done 2 ways: black box pricing and static rate cards. Everything I've shared with you here is why we lean into the market where we can adjust pricing quickly and granularly, that is through our black box pricing and why we are strategically underweight in the segment of the market where pricing is offered by cards, which limit our ability to be as selective in the risk that we write.

I mentioned geographic region as being a key consideration in our valuation projected performance. And this chart provides an excellent example of why that is. The gray line here is actual house price appreciation in Phoenix starting in 2005. And above the axis is house price growth, below the axis is house price decline. And what we've overlaid here is 5-year projections from our RADAR model at 5 different points in time, 2005, '08, '11, '15 and '21. We shared this view at our last Investor Day through 2020, highlighting our model's ability to accurately predict HPA changes at a regional level. And in this updated view, which now includes additional years, you can see our models have continued to perform quite well.

This is in part due to the approach that we use that leverages fundamentals, things like wage growth at the local level, population demographic trends, housing stock to estimate over- and under-valuedness as well as more real-time indicators, again, at the local level, like days on the market, shares of distressed sales, listings removed without sale and others. There's a lot of economic value opportunity if you can allocate more capital in the areas that will experience favorable trends in future periods while our policies are active.

This is consistent with what we shared at our last Investor Day. It's pretty intuitive. Our approach would require a significantly higher premium for a policy in a market where the outlook is less favorable as compared to that same policy, if we were written in a market that is projected to experience more favorable trends. As an example, in Phoenix, our model would project a better performance for loan originated Phoenix in 2011 as compared to Phoenix in 2005 through 2007. So this is what we've done. Based on internal analysis and using publicly available loan performance data sets from Fannie Mae and Freddie Mac, we estimate our best-in-class MI underwriting and pricing has produced higher returns and produce a competitive advantage as compared to our peers.

I mentioned that our approach is working, that there's proof in the pudding here. So I'm going to use 2023 originations as an example, but I want to be clear, the story holds true with other vintages as well. In fact, we used 2022 originations at our last Investor Day to highlight a similar point. In the chart, what we did is we divided all of the metropolitan statistical areas, or MSAs in the U.S. into 3 groups: the top 40%, best performing 40% in terms of house price growth; the middle 20%; and the bottom 40%. And what you're seeing here is that with 3 years of development, we can definitively show that our approach has enabled us to overallocate our market share in the best 40% of markets that have experienced 16% house price growth.

And we were able to underallocate in the areas with less home price growth. And there's a saying, a rising tide lifts all boats. And this chart shows that even the markets we were underallocated in still experienced positive growth. However, as history has shown that will not always be the case. And we believe our ability here is unique and positions us favorably vis-a-vis others in our industry.

Sticking with the 2023 vintage as an example, you can see how the book is performing for Radian as compared to others in the industry. The chart on the left shows the dispersion in default rates that range from 1.5% to 3.5% as of first quarter 2026. This is primarily due to each mortgage insurers' risk selection. Now we're all in the same industry. So even though there are differences in absolute levels, you can still see similarity in terms of development and seasonality, et cetera. But default rates are a measure of performance with no consideration of value. And what's shown in the chart on the right for those, that report it is cumulative incurred loss ratios. And these are calculated by dividing total incurred losses to date by premiums earned. So this starts to bring in value into the equation, not capital yet, but the value now, you can see it is showing that Radian is consistently in line or lower than our peers that disclose this metric.

This is important because without considering premium that may appear on the left as if a 1.5% default rate is better than Radian's 2.6% default rate, but that's not the case. Our focus on value has led us to deploy capital in segments that could otherwise be viewed as riskier. But importantly, those same segments are priced with higher premium rates such that they generate loss ratios in line with Peer 4, who wrote lower risk volume that required less capital and was priced at lower premium rates. As the title of the slide states, we're not in the game of minimizing risk. We're focused on maximizing value.

So just as maximizing the economic value of new business is important to us. Ensuring our portfolio is well positioned to manage through varying economic conditions is equally important. For over a decade, Radian has been leveraging risk distribution to manage capital and earnings volatility. We have agreements covering a portion of our risk on 99% of our exposure written from 2022 through today. And we have agreements in place that will be covering newly written business for years to come before that business is even written. But we are quite selective in our approach. As an example, nearly 2/3 of our pre-2020 exposure is not subject to risk distribution, and that's very intentional. Given the significant embedded equity, we're very comfortable retaining that exposure and the associated premium.

This is true with the cushion we maintain above what is required by PMIERs, which is what Fannie Mae and Freddie Mac require in order to be an eligible insurer. PMIERs is a very strong capital framework, but it does not account for certain factors that drive performance. As an example, PMIER does not consider accumulated borrower equity since time of origination, which means that the same capital is required on policies written in areas that have recently seen house price declines as is required in policies, before policies in areas that have seen meaningful growth.

As I shared a few minutes ago, we believe we're building a favorable portfolio as compared to the overall industry, and part of that shows up in less projected volatility. This influences the sizing of the cushion we maintain above the required level. We established an appropriate PMIERs cushion based on projected performance and stress conditions, and Dan will share more on that later. And notably, we do not take a bigger is better approach. We think this is the right approach. To be clear, and you can see on the chart on the right, we see the least out of any of our peers that report this 32% of our risk we cede and actually prior to the Inigo transaction, I believe we were the only MI that had available assets that could fully support our required assets with no use of risk distribution. So we could certainly cede the additional risk and premium to increase our cushion, but we find more value in keeping both on our balance sheet as we believe it benefits shareholders.

My hope is that you take away from today that we believe we have strong fundamentals in our favor. We believe we have a meaningful competitive advantage in how we view and select risk. We're leaning into technology and to support our customers and drive efficiency. And finally, our business has been built to perform through market cycles.

I'd like to thank each of you for your interest in Radian's Mortgage Insurance business. Meghan and I will continue to work together with everyone at Radian to position our business for continued success. Look forward to meeting and speaking with most of you, all of you later over lunch.

And I'd like now to welcome Richard Watson, CEO of Inigo and members of the executive leadership team to the stage.

Thank you, Steve. Meghan, Fantastic. What a great story. Thank you for the introduction. Good morning, everybody. It is an absolute pleasure to be here. I'm joined, as you can see, by a good range of my fabulous team. It is our pleasure and our privilege to introduce you to the story of Inigo.

This is the agenda. This is what we're going to take you through. So I'm going to start with a little bit of an intro to the company, mostly because I think it helps to set the context for what we do and what we are going to do going forward. So we'll talk a little bit about that. We'll talk obviously about the Radian deal and why that appeals to us so much. And then -- more importantly, I think, is we'll spend a bit of time talking about what we think sets Inigo apart from the rest of the market. And then I will close.

Now, there is clearly a severe chance that we will bore you to death. So at the end of this, Bob in his absolute wisdom has put a coffee break in. So we're going to wake you up with some highly dosed caffeine and then going to come back for a Q&A. So I hope that you had lots of good questions to ask.

We are delighted to be joined by a good number of our team. We have flown half a dozen of our team over so that you can have a chance to see them as well. If you wouldn't mind guys standing up wherever you are, at the very least, it would help everybody know who to come and talk to you.

These are people I would walk over hot coals for. Flavor, we've got underwrites our casualty book and immense talent. Ludo, I see here heads up our Catastrophe Research, which is fundamental to what we do. I know you brought some of that research with you for the geeky people in the audience. Nick Lazarus underwrites our U.S. Treaty Book and probably underwrites more premium than anybody else individually at Inigo. So it's great to see him here. Bea, we have as our Chief of Staff. Chris underwrites direct and fact, which is another word for our big property in all its various forms. That again is our biggest single account.

And George is the backbone of the business because we actually call him, hey, George, that was your -- you could kind of open? Because if you've ever been with George Stratts to an industry convention, it's a nightmare. You cannot get from one meeting to another without having to stop and talk to 10 people go, hey, George. hey, George. He actually knows everybody. So look, the team is here, they're here to talk to you. They are very genuinely an awful lot smarter than me and they're certainly more in discrete. So if you really want to understand what's going on, take the time over coffee or over lunch to have a chat to them.

So the Inigo story, kind of brief introduction to Inigo. So we started it 5.5 years ago. I've been very privileged to work in this industry now for over 40 years, and I've had some fantastic colleagues to work with, both as colleagues, but also some wonderful people to work with as customers. And in talking to Stuart, Russ, Craig, George, right at the very beginning of this venture. I think all of us had this kind of itch to see whether we could set a business up to see whether we could repeat all the really good things that we've seen in our careers. Could we sort of [indiscernible] that up and create a company, we did that.

And this was back in 2020. And the other thing that was happening in 2020, of course, was COVID. I mean the market itself had a couple of really bad years and then COVID hit and that completely upended it. And so for us, that was just like this perfect chance to say, why don't we get together and do this? This is the perfect opportunity too. So that's what we -- that's when we started, it was 2020. We started trading in 2021, and we all agreed, I would say, literally, all of us agreed on this really basic approach. So on the left-hand side there, you see a number of -- I suppose like building blocks really as to how we wanted to start the company.

The first thing was focus, focus, focus. Can we not try and be all things to all people? Can we just try and focus in on areas where customers really value you, but also areas where typically they've earned good returns over time. And just forget the rest because most insurance companies end up drifting into ever less profitable, less exciting areas where, frankly, they don't bring much unique, compelling proposition. We didn't want to do that. We're just like let's go deep in what we're going to underwrite. The other thing was leadership and expertise. That was fundamental to all of us. It's fair to say that it's really hard to know with broker facilities, AI sort of clever follow underwriting, the sort of compression of margin. It's hard to know where the market is going to go and what it's going to look like. I mean I wouldn't -- I could give you 4 or 5 different visions.

But the one thing I feel really certain about is that expertise, deep expertise will always be needed and will always be rewarded. So we're going to focus on a limited number of classes. We're going to bring expertise and leadership. That's the challenge we set ourselves every day. And then lastly, can we just keep it really simple. We've probably all worked in companies where they had a level of complexity that brought cost, it brought distraction. It meant you weren't talking about customers or underwriting deals, I just meant you were kind of [indiscernible] management hell. So can we just try and do it in a way that was really simple. In our case, that's one capital base. It's one office. Just everything there touch, it's tangible, it's there to control.

So look, so far, so simple. This was the kind of building blocks of it. But how do you turn that into a compelling proposition for your customers and for your staff? So we focused on these three areas on the other side of the graph. First of all, was the customer, could we put the customer at the front? Because it's quite funny. I would say in the 40-plus years, it was very obvious to me that the customers is a bit of an afterthought in the specialty insurance game. It has become very transactional. There is almost literally a gap between client exec and customer and placing broker and insurer.

And we want to just break that down. We wanted to get close to the customer to understand them and their needs at a really granular level. And to work with some people who are at the top end of the market spending massive sums of money. And all they get back is this flimsy bit of paper and occasionally, they get to meet us, like can we do better than that? It's a pretty low bar. I think it's really easy to do better than that. And you are pushing on an open door. Customers love talking about their business. Those are risk managers, they just want to come into the office and help the business run better, to avoid or to mitigate risk, to try and make it better. So you're pushing on an open door and trying to get close to the customer and understand what they do.

And you don't have to be a kind of industry servant to look at data analytics and say, this is going to be critical to the future of the industry. What was very apparent to us was that as a new company, we had an immediate advantage over a lot of the existing companies because we didn't have outdated tech. We didn't have competing priorities. We didn't have all sorts of other things that we get distracted by, we could have a really good tech and data stack and really play to that. And it also just fundamentally appeal because the sort of people we are a bit geeky and numerous. So we quite like this analytics and try to understand the science behind it.

So we knew we're going to double down on the data analytics piece. And the same in examples of where we can do that. I know Erdal will come and take you through it. But I started my career in the property insurance game. We would write big commercial industrial risks. They would come typically with this much paper, would be handed to you, normally about a week before renewal. There were engineering reports. So some wonderful surveyor has gone through and looked at every single building, looked at recommendations that they could have, given you all these details. And by and large, as underwriters, we're typically not engineers. You've got this much to go through, what are you going to do? You're going to pull out 1 or 2, have a look at the biggest maybe, get a feel for those any recommendations. You're going to get -- and then you're just going to bin it, literally bin it.

And for all these years I've been doing this, you imagine how much information is contained in those reports, all right? I mean it's huge there may be 50 data fields and maybe only 20 of them are relevant, but all of that has been lost before. And now we can digitize it, we can analyze it. We can now digitize and analyze the claims reports. Now I can start linking claims activity and outcomes to reports, recommendations, observations, technical knowledge, I can start to see it. Is that recommendation a really big deal? Or is that only going to drive outcomes a little? That one, oh my God, that is way more important. That's a massive premium credit or debit. We can start to tie them together for the first time. So the ability to use what's available now, the technology that's available is mind-blowing to me and fantastic.

Well, Ludo will take you through some of the work we're doing on climate. I mean imagine using AI to predict the weather, not 24 hours ahead, but how about 2 weeks ahead, how about a month ahead. Imagine the advantage I can gain in the market by having just more notice of big events and what they're going to look like. So the data analytics piece is hugely important.

The last one of the 3 big ones there is culture. I would say in our industry, I think it's fair to say the success of companies in our industry is defined by the talent you have. If you have great people, even if your strategy is a bit up and down, even if you make some mistakes and we all make mistakes. If you have really, really good people, any bump in the road, they'll find an answer. They will find a solution. Even if it's a mediocre strategy, they'll make it work because they're great people. You have to have a culture that attracts great people and retains them.

So this was a very deliberate part of the design of Inigo was how do we create a culture? What is the culture? We'll talk about that. Andrew will take us through that. So we'll talk about it in detail. What does that look like? The natural outcome of all of that, if you do those things really well, the natural outcome is that you have excellent underwriting. But you've got to do all 3. You can have 2 of those. You can have pretty good culture, pretty good customer focus, but you don't have the data analytics you're done. So you need all 3. That to me is the sort of magic source of what it is that we're doing.

I'm going to hand over to Stuart now for a couple of minutes to talk about the progress of the company and the financial highlights.

Good morning, everybody. Thank you, Richard. So I want to give you a very brief history of Inigo and develop a little bit on some of the thoughts that Richard had. The founding idea for the company came just over 6 years ago in May 2020 from Richard. And having had the founding idea we then spent the next few months developing a pretty detailed business plan because we knew that was going to be the driver of what we were going to do for the next few years. And on the back of that, we then raised $700 million of capital which we raised in mid-November 2020. We then gained the necessary regulatory consents we had. But an important matter of this was we were ready to go on the 1st of January 2021, a very important date for us because it's probably the largest renewal season for the reinsurance team and to get into the market for that day was pretty critical to our strategy.

Richard has commented the fact that 2020 was, of course, the COVID era. So we raised all the funds over Zoom, which tend out to be very efficient because the investors can't hide and say they're out and they're away. They're always there. You know where they are, big plus. But the other thing that came out of that for me is Richard's comments on culture that because we also recruited of course, the first 60, 70 people over Zoom, getting the culture right from the outset was really important because you knew one day, a lot of people who didn't know each other, you'd say, come into the office, you all get on, it will be fine. And actually, knowing that there was a structure behind them culture-wise, and everybody was very similar in many ways was just a tremendously important thing to get right at the outset.

Over the next few years, we got more teams on board getting a very focused and very limited number of lines of business that we felt we could write very profitably going forward. At the same time, kept developing the analytics and the pricing tools and with Ludo and the team, the catastrophe research and very much a focused, limited number of lines of business where we can go deep with a deep expertise, which I think is at the core of our business still today.

So the first 5 years, we delivered strong, profitable growth and understand writing for profit is our key aim and we will always continue to focus on that. Another thing I'd comment about this is it's very critical, given we had quite a strong market when we started that we keep a focus on our expense ratio which we did, and I think we've done pretty successfully between '22 and '25 because as the market softens, you don't want to have a problem caused by the high expense ratio going into a slightly softer market. So we spent a lot of time managing that well.

So I'm going to hand back to Richard with those thoughts.

Sure. Thank you very much indeed. So let me -- if I may look at the Radian deal because clearly, you will want to know how we feel about it and how we see the future as part of the Radian Group. We always knew that we needed to find permanent capital. From the moment we set the syndicate, we had private equity behind us. They were great. I mean they get a bad ramp, but actually, they were great with us. But it's not always temporary, right? We want permanent capital. I kind of want capital to be just not the thing we're talking about. I want us to talk about the business and how we underwrite.

So for me, it was always something that we knew we had to do. We talked about it very openly within the company. So there was no great sort of drama or surprise when this happened. We knew we had to do that. And like any kind of like any kind of finding a partner, it's a bit of a dating game, right? So you have a wish list, we had a wish list. It was sort of classically non-smoker, solvent, good sense of humor. We had [indiscernible]. This is what we like in the perfect partner. I know this sounds cheap when I say it, but I very genuinely mean it. When we met Rick and the team and we got together with Radian, and that was like, oh my God, every single box tick. This is absolutely perfect.

So look at it from my point of view and try to sort of see in the next couple of slides how I see this combination. I mean there are a couple of what I described as structural advantages. We've got more capital. So we've got the ability now to support that growth, and we're very ambitious in the way that we look at the next 5, 10, 20 years. We've got much greater portfolio diversification. That really helps us manage the volatility that is inherent in businesses like ours. And really critically, no business clash. I haven't suddenly got two departments who do the same thing. There's no like tedious or do they report to them, but they report to the none of that. So it's a complete freedom from that. And there's no channel conflict. I can be an insurer, I can be a reinsurer, I can be a wholesale market, I can be a retail market. It's all open to us. That is fabulous.

And one of the things that is really important to us emotionally was this thing that we keep the brand was the fact we have that independence. We have that ability to drive this business wherever we see opportunity. And that is an extraordinary thing. Think of who else could come to this party and do this and give us that benefit. I'd say pretty much nobody. So that's a phenomenal thing for us. We're over the moon. It's a great opportunity for us.

The other thing was -- and I loved it when Steve and Meghan talked about their business because we -- obviously, we haven't known each other that long, but it feels like we're Blood Brothers. I mean you talk about your business in exactly the same way that search for strong underwriting returns that search for some level of science and analysis behind what you do, the ability that you want to reinvent how you do and what you do through AI. I mean what -- that's a great match for us. So look, we see here a true partnership.

And the biggest thing when I think about and certainly when we talk about it, it gives us choices as a group now, we've got choices. We've got this ability now when we look at the capital that we produce. We've got choices about where we invest it, not just within MI. We can put more money into MI, we can do more there. But we now bring the ability to invest and look for opportunities in the insurance market, in the reinsurance market, and in the third of our divisions, partnerships, which George runs. That's where we're dealing typically with big points of aggregation that could be NGAs, it could be brokers. And that can be both an underwriting opportunity, but also an equity opportunity. So we are bringing choices here, which I am delighted with.

And what that means is we have a much greater capability of managing volatility and enhancing the return. And that puts us in that bottom right-hand corner of the graph. And that's where we think we're going to drive great shareholder value. If we can show you over time that we consistently sit in that bottom right-hand corner of the graph. And the other thing it allows us to do with the partnership is invest in all these areas that we think are critical customer focus, culture, data and analytics. And we're going to go through each of those, and the team will talk to you about it. So it becomes more tangible. It's not just me saying a word, it's something real. So we'll have a chance to do that. But you'll recall at the beginning, what I said was if you do those 3 things well, one thing will happen, you will have fantastic underwriting results.

And on that note Mr. Russell Merrett.

Thank you very much, Richard. All right. Well, my pleasure to give you a brief introduction to Inigo's underwriting portfolio. We're organized into 3 divisions: insurance, reinsurance and partnerships, as Richard just cited. The first are pretty self-explanatory. The Partnerships division is where we concentrate the small amount of delegated underwriting that we do partnering with experts to access risk types and classes of business and geographies that we can't efficiently access from London. So for example, we support a high-value homeowners MGA here in the U.S., a distressed market that they can access very efficiently, and we're also a founding investor in that MGA.

All of our divisions have a mix of short tail, longer tail and specialty lines. And as you've heard, we underwrite relatively few lines of business. We target those that have a realistic prospect of good returns over the medium term. They need to be able to be material in size, and we need to have expertise that we can offer differentiated lead capacity. So that's a few enough lines that each can have the attention it deserves, but enough that we can build the foundations of a diversified and balanced portfolio. We've actually added roughly 1 to 2 lines of new business per year as we've dynamically evolved the Inigo portfolio. Today, the largest lines are our property insurance and reinsurance lines, where rates have been fantastic, but are regrettably becoming more challenging, more on that and on, followed by our U.S. casualty lines where more pleasingly, rates are generally stable and in some cases, improving.

So our aim, as has been stated, is underwriting excellence. That means underwriting for profit rather than for growth as an end in itself. And beyond that, we do aim to grow over time, but we expect that growth to be jagged uneven. We may have to hold or even reduce our underwriting, but we will push on with growth decisively when the opportunities are right.

What is underwriting excellence? Well, for us, that means really targeting higher-than-average returns captured in lower net combined ratios and lower-than-average volatility. So I'll tell you a little bit about how we hope to achieve that.

On this slide, we see some evidence of cycle management in action. I picked out 2 lines of business, both D&O and property telling different tails. In the directors and offices insurance line, we were very quickly out of the blocks in 2021, writing more than $120 million of premium rates in that class had gone sharpened very dramatically after years of underperformance, and we were able to seize that opportunity when we started.

Rates, unfortunately, as you'll see from the index began to fall as soon as 2022, as other capacity entered the market and others realized how attractive they were. And yet they were still at a very fine level we were able to push on and grow. Since '23, rates have fallen further, and we've had to reduce the amount of D&O GWP gross premium that we've written. Meanwhile, a different story on the right side of the graph in our property insurance and reinsurance lines where we were able to triple our premium or more than triple our premium between 2021 and 2025 as rates increased very sharply in '22 and '23, in particular, after some very large catastrophe activity, especially Hurricane Ian.

As I've said, rates in some of those lines are now starting to fall off, but we do still find opportunities to underwrite profitable business risks are not homogeneously priced, and we have the technology and the skills to identify the attractively priced risks. So it might look like Inigo's growth has just been a story of doing a bit more of everything. But beneath the surface, we have been dynamically evolving the portfolio of Inigo whilst we've grown to try and target an optimal portfolio.

All right. So underwriting excellence, as we said, has two aspects to it. It's risk selection and managing volatility. And this chart gives some evidence that we've had success in managing our volatility. On the left-hand side of the chart, you can see our profitability by quarter going back to 2022. I've called out some of the bigger events of this period on that chart. And you can see that those big events, hurricanes and windstorms and wildfires have influenced our profit by quarter. But on the right-hand side of the chart, you can see that they have not got in the way of us achieving profitability.

None of the big events that was called -- that are identified here was allowed to be so large that they caused our annual results to be negative. I think a product of a careful gross portfolio construction, but also the judicious use of reinsurance and retrocession protections to protect our net account from the kind of big events that we do expect occasionally to be hit by. We made a profit overall in 2022 in spite of a loss in the third quarter that was caused by Hurricane Ian, itself the second costliest cat in modern history, but many other specialty insurers and reinsurers did not.

2025 was something of a roller coaster ride. I'm sure you remember, the first quarter was dominated by the extraordinary wildfires in California, and we made only a small profit. But in the very cat quiet second and third quarters, we were able to generate substantial profit also supported by our increasingly diversified portfolio. And ultimately, we made a record profit and achieved the top quartile net combined ratio in Lloyd's in 2025.

So I don't want to shy away from the fact that we do take catastrophe risk, but we aim to do this within known parameters and tightly, and it always depends on us being well paid for taking that risk. So we managed to Board made -- sorry, we manage to tight Board-mandated metrics and also to detailed plans based on our expectations of market conditions. And in the future, we plan to disclose our model tail exposures to you in certain lines of business to enhance investor understanding and transparency of how we manage risks and how we might be impacted by large events.

So to better familiarize you with all of this and our potential large loss exposures, I'm going to try and explain how we will share those aspects with you through box plot and whisked diagrams. An example graphic is found on the left, and you may find it easier to look at your iPads. Here, we identify the expected impact to Inigo of major cats of a given size and peril. We start by identifying how big the loss related to significant events like hurricanes and earthquakes might be to the insurance market as a whole and the probability of events of that size. For example, we estimate that it's about a 1 in 7 probability, but this year, a windstorm in Florida will generate insured losses of more than $20 billion.

Next, we calculate for insured market losses of a given size, for example, the range, $20 billion to $50 billion. What might be the final net impact upon Inigo. Final net, meaning after reinsurance recoveries and inwards and outwards reinstatement premiums. The blue boxes show the interquartile range. For Inigo, 50% of the time, our final net loss is expected to fall in those boxes. The whiskers communicate that 90% of the time, Inigo's final net loss is expected to fall in this slightly larger range. So if there are 100 modeled scenarios in the $20 billion to $50 billion insured market loss range in 50 instances, Inigo loss would fall in the blue boxes and 20 would be in each whisker above and below the interquartile range 5 would be above the top whisker and 5 below the bottom whisker.

The actual outcome will depend on the detail. Is it a $50 billion or $20 billion event? Was there more wins than flat? Was it a slow-moving storm or a quick-moving storm, but details are important. Our market share will be slightly different. So it depends exactly where the hurricane, for example, made landfall. We've learned that in big losses, there are always surprises as well. So we should remember that these are modeled scenarios.

Okay. On the next slide, we're going to give some real examples of our exposures in some of our key peril zones. So on the left, we have Florida windstorm, which is essentially hurricanes and on the right, the California earthquake. You'll see that generally, our expected final net loss increases as the size of industry loss increases but not surprisingly, for very large events. And on the right-hand side of each chart, we are looking at $200 billion-plus market events. There is a greater variability from the much greater complexity of those large loss scenarios.

A real example would be Hurricane Ian of 2022, which if we index at 6% per annum, would cost the industry today about $60 billion. So it falls squarely into that second column on the left. And that indicates that a median loss for Inigo from an event of that size would be about $100 million. Now that's a number we're comfortable with. And in fact, the size of net losses shown here for some really enormous market-moving events, feel appropriate to ask the big infrequent cat events and of an order of magnitude that we can manage within the significant loss experience that we expect in any given year and in the context of the returns that we expect to generate in underwriting this business in the first place.

Overall, we believe that the volatility of our net is more controlled than is typical for our industry. Industry exposure -- industry disclosure on these exposures is very mixed, it is often opaque and no two carriers can seem to an agree on an identical basis to disclose. Is it the carrier's view? Or is it the vendor view? Is it a worldwide distribution or peril zones specific? Is it the 200-year or the 100-year? Is it AEP or OEP? I'm sure some of you are familiar with these terms. What we say we are going to do is look to be transparent, considered and appropriately thorough in what we disclose to try and minimize surprises.

So thank you for staying with me through that technical journey. You'll see that -- Indeed. We are willing to take risk, ideally evidenced over time with net combined ratios that are lower than average and with control of volatility. But to learn more about how we take full advantage of what advances in data and analytics can offer us, I'm pleased to hand over to our Chief Operating and Technology Officer, Erdal Atakan.

I'll start with a question. Why is data so important to us? Well, let me explain. For the love of data is a statement that we use to describe our obsession with searching for, collecting, curating, storing and analyzing data. Since the inception of Inigo, our ambition has been to marry the science of understanding risk with the art of underwriting. By turning data into insights and actions, we believe we're able to select better risks while providing value back to our customers.

To achieve this, our approach is a simple one. Firstly, data. We utilize our in-house experts, our network of external partners to collect and store both structured and unstructured data in our modern data platform. Secondly, models. Our analytics team enhanced pricing models to incorporate new pricing factors, utilizing the data we collect to increase our understanding of risk and the quantification of it. Finally, systems. Our technology teams develop modern underwriting and pricing platforms to surface these insights at the point of underwriting. We believe this derives 2 main outcomes.

Firstly, we believe we can select more attractive risk and optimize our portfolio. And secondly, as Craig will highlight shortly, we aim to educate and provide value back to our clients using these insights.

Over the last few years, we've developed our own proprietary underwriting workbench. We call this internally Ignite. The platform acts as our underwriters' cockpit as the image depicts. It guides a submission through the quoting process. It integrates pricing and analytics systems together. It provides management information to monitor the performance of our portfolios and help -- and it also helps collect client insights together in one place. So ultimately, platform supports our underwriting teams with risk selection by servicing insights and analytics at the point of underwriting.

Now here are a few examples of how we approach in our business. Russell earlier talked about natural catastrophe. So going a bit into that, we've increased our understanding of hurricanes by utilizing publicly available data and combining that with machine learning techniques to help improve the predictions of these events, and I'll touch on this in a little detail shortly.

Engineering reports. Now Richard gave you a good description of this. So we require risk assessments when underwriting commercial property risks, which we deem high in value and technical in nature. The data in each we report we receive is structured using AI tools and then the results surface back to underwriting teams. This saves a significant amount of time when assessing them.

We've also collected millions of telematics and GPS data points through

[Audio Gap]

With larger adjustments to less frequent events. So you can see the 1 in 100.

Now we believe the outcome of doing this, these adjustments helps us improve how we select risk, how we manage our overall portfolio, how we deploy capital and the level of reinsurance protection we purchase. And secondly, we also believe this improves the strength of the relationships we have with multiple different parties. Be it by providing insight back to our clients, by publishing research articles and insights and improving the confidence our regulators have in us.

Our colleague Leyden, who just had a few shout-outs, he manages the Cat research team and will be available to answer any difficult questions you may have on these topics. All right. So as a technologist at heart, I have to mention innovation and AI. So our teams have a culture of continuous learning and exploration. It's actually one of our values. We aim to apply the latest tools and techniques to positively impact the P&L. We're applying a range of AI tools across traditional machine learning, generative AI. And now I mean, I'm sure as everyone else is looking at agentic AI to increase our knowledge to scale efficiently like most others are and also to shift our teams in becoming AI natives. Now our current aim is to apply these into 4 areas, as I've shown on this diagram. Firstly, into underwriting teams by creating tools to augment knowledge and judgment to supporting a human's chain of thought, so they don't have any blind spots or we reduce blind spots. In the claims team by automating the monitoring and detection of signals that may cause us concern from loss notifications. With hurricane predictions, we're going to continue the work we've been doing with academia to utilize AI and neural networks to increase the accuracy of hurricane forecasting. And finally, pursuing general productivity across all of our company, equipping and training all of our teams with the skills, confidence and, of course, literacy to utilize AI agents within their day job. Now I will shortly explain that the drive for utilizing data analytics is actually enabled by, I believe, our strong culture. One of the ways we achieve this is by generating excitement in collaboration by hosting hackathons. We do this with employees, partners and actually most recently, customers.

And so in closing, we believe the combination of analytics, data, technology and culture is a winning one. And I'm going to hand over to Craig to tell you more about our customer focus. Thank you.

Thank you, Erdal. Good morning, everyone. I'm Craig Knightley, and I'm the insurance team CEO here at Inigo. I'm going to ask you a question now. It's going to take a slight risk given I've got such an industrious group in front of me. And how many of you in this room have ever spent $100 million on a single purchase? Dan, raise up his hand. That was a great purchase, $1.7 billion bargain, well done. That wasn't [indiscernible], and I didn't see any hands got up on those ones. So now let's pretend you're going to spend $100 million on a single purchase. What would you expect for it? Now some of our customers spend $100 million or more on insurance every year. And what do they receive in return? A promise to pay valid claims if something goes wrong. But at Inigo, we believe customers, as you've heard, should receive more value than that given they spend so much. My job over the next few minutes is to explain to you how we've been trying to do this since the company began. Now Richard and Russell have already explained how we've gone narrow and deep with our product set. And that focus has enabled us to build market-leading underwriting teams. And the blueprint shown on the right here is how we've set each team up. This isn't rocket science. This is about really focusing on those fundamentals. We've ensured that we've had a really strong claims handling team from day 1. We've had material line sizes such our capacity is sought after. And we've ensured that we've delivered various product innovations so we remain relevant with both brokers and customers whilst also being really easy to deal with and having fast response times. We regularly receive feedback from brokers on these dimensions, and we've been scoring consistently well since we began. And it's really importantly in the coming years, we maintain those scores.

So who are our customers? Our business is structured around 3 core customer types, and we've already walked through these divisions, large corporates, insurance distributors and reinsurance companies -- sorry, insurance companies. In the insurance team, which I lead, we are typically insuring large public businesses. We currently insure almost half of the S&P 500. So you can imagine that many of the customers that we have are companies that you guys would know well.

As you imagine, these are well-risk managed businesses and sophisticated buyers of insurance. Our second division, led by George, is partnerships. And this is where we combine with distributors of insurance to create value together. Our customers in this division are those distributors. How can we be a more attractive partner for them than our peers. We've already talked about this example with Motion Specialty, where we have an equity stake in the business and we'll common share our cat research insights, which Erdal walked you through earlier, our Inigo view of risk with them. We're very transparent with our data analytics, and we commonly pay this back to all partners that we have.

Our third division is the reinsurance division, and this is where we partner with small and large insurance companies to help them manage their risk using our balance sheet. Again, we will commonly share our research and insights with these companies so we can provide more value than just the reinsurance policy.

I'm now going to jump into the insurance division and show you how the book is made up by customer. So as you can see, we've got quite a finite number of customers, only 6,000 customers. But beneath the surface, there's another dynamic going on. 250 of our customers account for 40% of our premium. So a very finite number of customers account for a significant amount of what we do. And the second chart shows you that many of these customers currently only buy one product from us. So many of these businesses will buy D&O, GL, casualty, cyber and D&O. But typically, from Inigo, they're only buying one of these products. And having discussed with these customers, what share of their spend we are, it is very rare to be above 1% of their total spend. So in that example, if they were spending $100 million to $200 million, we might only have $500,000 or up to maybe $2 million. It's very rare that we'd be over 1%. However, when we look at the biggest insurers on their panel, many of those, the biggest ones could be 5% to 10% of their spend. And therefore, there's a real opportunity for us.

So if you look at these graphs together, you can see that there is a finite number of customers that drive our premium that we often currently only sell them one policy, and it's very rare for us to have more than 1% of their total spend. And therefore, when you add that all up, the opportunity to do more with a finite number of customers is tangible.

So how are we trying to do this? At the start of 2025, we launched our core customer offering, Horizon. This is focused on a select number of customers. It's grown from 25 customers in 2025 to more than 60 in 2026, and we plan to scale this again into 2027. Horizon has been designed to offer these customers a program of benefits that goes beyond simply offering them an insurance policy. The program benefits are now listed on screen. And as I've said, this program is really about bringing the best of Inigo bet to bear for these customers.

Erdal has already talked about data analytics. That's a core part of it, but also leveraging our teams and our culture by getting the underwriting and claims team to spend significant time with these customers. We regularly meet with these customers to share our latest insights with them as well as host them once a year for our annual Horizon event, which is in our offices in London. Two of the main benefits are our Insight pack and INFORM Inigo for Risk Managers, which is our internship program.

I'm now going to jump into these 2 benefits to give you more detail. So in early 2024, we decided that we should find an effective way of sharing our insights back with our customers. You've seen already from Erdal that we have this consolidated view of each client in our underwriting cockpit called Ignite. And what we wanted to do was essentially face this and turn it out to customers and patch up so they could view all of our insights about them. For many large corporates, the majority of their insurance spend and exposure is concentrated across 4 core products, which I've already mentioned, casualty, D&O, property and cyber. And this is where we've invested heavily in both underwriting and claims, but also in our data analytics capabilities. So what the Insight pack does is it shares all of our insights about the customer and plays it back to them. So for a few examples. For property, we share their natural catastrophe exposure, highlighting which assets are most exposed and why. We take all the great work that Leyden and his team does, and we basically show how we view their natural catastrophe exposure in terms of how it's evolving and actually overlaying our own delivery of risk on that and give it back to them.

In casualty, we benchmark their claims experience against their peers. We are capturing all the claims data so we can really understand what's driving the claims. And it's fascinating when we hear from our clients how they're then using that in their day-to-day business.

In D&O, directors and officers, many public companies there's obvious exposure to security class actions, and that is often driven by certain industry sector trends. So what we try to do is put out what are those trends. And again, by speaking to defense council law firms, we can apply it back to our clients in a way that is really tangible.

And finally, in cyber, we combine with our own data and expertise with external partners to assess how often some companies are being attacked relative to their peers. The response from customers has been extremely positive. However, at last year's Horizon event, we heard that actually what those customers really, really like is to make the Insight pack digital for 2 main reasons. One, they wanted to be able to interact with it and actually dig deep into the data and understand what the trends were in an interactive way. But also they wanted to share it more broadly within their companies and extract some of our graphs and exhibits so they can use it in PowerPoint presentations like the ones you've seen today. So we've taken that feedback on board, and I'm really excited about what's coming in H2 for 2026 because we are going to launch our digital insight portal for our customers. We're planning to host 40 to 50 of them in our offices in November when this will hopefully go live.

One of the other major benefits of Horizon is our internship program, where risk managers spend a week in our offices with our teams and some of their peers in the market. As I've already mentioned, the risk managers we host are typically the buyers of the insurance for their companies. They often decide which insurers to trade with and how much to spend with those insurers. There are over 20 sessions per week, including the opportunity to sit down with our underwriting teams and review their core insurance purchase in our underwriting dashboard. We are super transparent with our view on how we price our exposure, and it creates a valuable dialogue and sometimes a heat debate. And it's a really fun week and having actual customers in our offices, our teams really, really enjoy it. There's a real energy and buzz when customers are in our offices, as you can imagine. And it reminds all of us that we only really exist because of our customers. Without them, we don't have a business. We have no premium. We have no need to continue. We've had excellent feedback from our customers on INFORM. But rather than hearing back from me, we've compiled a short video where you can hear from our customers directly on their experience of that week.

[Presentation]

Last but not least, culture. And luckily, I've got a bit of the easier job today because I think you've seen our culture in action so far. But I'll take you through a bit more of some of the thinking behind it and the ways that we try to bring it to life. So our culture was intentionally designed to differentiate Inigo. You heard Richard and Stuart talk about how this was something they thought about right at the beginning of creating Inigo. The goal was to create something that could attract and retain incredible talent and also act as an operating system for collaboration, effective decision-making and ultimately, we believe, superior risk selection. The result is that our culture is distinctive. It's embedded in the day-to-day, and it's going to be difficult for others to replicate. I'm confident, again, you've seen it, but let's get into a little bit more. So the formula, what we set out to do, number one, was to hire incredible talent across underwriting, data and analytics and enabling functions. You're going to have the chance to talk to a few of them today. I encourage you to do it. Leyden has gotten all the shout out so far, but there are also some great underwriters with us and some analytics individuals, too.

We brought them together into a single office so that they can work together, collaborate, learn and the space is encouraging creativity in order to kind of bring people together. We work there face-to-face 3 days a week. We focused on Inigo's success over the success of individual lines of business, and we united people across 4 core values. These values are visible in how we operate day-to-day, in how people interact, how they make decisions and also how we serve our clients.

So let's get into each of those in turn. So GetSmart. GetSmart is all about relentless curiosity. Curiosity leads to learning, learning leads to a sharper expertise as well as innovation. We've got 93% of our employees have attended or participated in some of the learning that we have on offer over the last 12 months. And while kind of pulling the stat together, I'm thinking I need to figure out who that 7% is. I'll deal with that when I get home. But I think it gives you a good feel for the commitment and the engagement and the learning that we want to do. I think also with Russell, he views this as a learning opportunity around boxing riskers. I hope everybody feels more informed as a result.

We also encourage people to attend conferences. We support advanced degrees as well as qualifications like actuarial studies because we do believe the world needs far more actuaries. We do secondments across teams. We also do coaching and mentoring, all to support our people. And this ensures that our capability continues to grow, and this becomes a source of edge for us. So park the ego, that is the cultural mechanism that makes challenge safe. And that's where you get the best ideas to win, not just the loudest voice or the most senior voice in the room. And this is something that's not just about being nice in a regulated market like ours, it's around conduct, risk management and avoiding some of those blind spots. So thinking about some of the ways we bring those to life internally, our peer review process is a great example of that, where nearly every risk we receive is peer reviewed. And as part of that, there's challenge and feedback. And this makes feedback a real expectation in how we behave and we believe also supports better risk selection.

To be honest, we actually ask for a lot of feedback about a lot of things. So it might be about values and culture. It might be about the learning that we share, even in office design. I think we ask for feedback on what we call our offices or our meeting rooms in the new office space. But I think this is to illustrate that we want people to know that they have a voice in our organization.

Next up is radical simplicity. It's how we avoid unnecessary bureaucracy. Fewer barriers is going to mean more time on the work and faster decisions. Richard mentioned at the beginning, having one office is radically simple. I think transparency is also radically simple. And you heard Craig talk about the transparency that we give to our clients. Internally, we also run things called Ask Me Anything, where employees can ask any question that's on their mind, and we aim to get them the answer. These are also good examples where transparency is important. And recent sessions were on things like compensation. We also ran one around the acquisition by Radian, really trying to encourage the conversations. And we think that this is an advantage because it protects that productivity and responsiveness as our headcount grows.

So lastly, the -- share the passion. This is our collaboration engine. I think you've heard some of the words around collaboration frequently so far, but we collaborate both internally as well as externally, and greater collaboration across the teams as well as with clients and brokers and our other partners, we think that this leads to better solutions, stronger relationships and faster execution. So the great examples we heard so far externally would be from Erdal. We heard about Samsara. We heard about a partnership with Cambridge. Craig highlighted INFORM and the Horizon program more generally. He also mentioned about a great internal example as well with our digital client packs. So our clients said they want digital client packs. So we brought together a team. They sit together. They physically move to sit together in the office to enable the teamwork, the feedback and that ability to deliver at pace. This shows how agile we can be, and we can bring people together quickly to create solutions. So I figured with you guys as the audience, I needed a chart of some sort, but this is my favorite chart, it helps to illustrate where we've come from. So I think our culture is one of the few advantages that strengthens with our scale. And our culture has remained strong through rapid growth. Our headcount has gone from these 3 guys sitting around the dining table in 2020 to over 250 employees today. We set out to be underwriting and data and analytics led and the majority of our employees are in those roles today. When we ran through this yesterday, Stuart gave me a suggestion because feedback, and I'm open to feedback, but I should also bring this to life with some more stats. So overnight, I asked my team to give me a few more numbers, and that includes the number of actuaries mentioned, how many we love. But we've got 28 actuaries today. We've got 2 more qualified actuaries joining. We've got 8 people seeking to be certified as actuaries. In addition to that, we've got 10 PhDs in our organization. So again, really kind of bringing together sort of that analytical mindset. We hire for both capability and cultural fit. So all candidates are assessed not only about their capability to do the job, but also against our values. We want smart people who are going to positively contribute to our culture. So as I mentioned before, feedback is one of our favorite things. We regularly seek it. And we ask people about their feedback of Inigo and their experience of Inigo, and our engagement remains strong even as we've grown incredibly quickly. So 94% of employees have indicated that they're proud to work for Inigo. 88% are willing to go over and above the day job. And I think this is further proven by our attrition in 2024 and 2025, only following involuntary attrition falling between 5% and 6%. This is a place that people want to stay. And I think all of this together gives us the confidence that we can continue to scale our culture without diluting performance.

But if you don't believe me, then check out this external benchmark survey that we participated in. So as part of being in the Lloyd's market, we participate in the Lloyd's culture survey each year. And in the most recent survey, we were among the 18 -- the only 18% of firms to be qualified as excellent overall. And as you can see, we scored better than the market average in every single category. This is consistent with previous years where we were top quartile in both 2023 and 2024. Now I can't go into every single result. I mean I'll be around for coffee if you want to go through more details, but there are a few that I thought I should call out. So one is client focus. That was our highest scoring category. And you heard Craig talk about our approach to client engagement. You heard about it being core to our strategy. And 97% of our employees have responded positively about their experience of Inigo and our client focus. And these are questions around how Inigo put clients at the center of decision-making, how we encourage people to provide clients with the information to make the best decisions, how we provide -- or we take on board feedback from clients and how we deliver for our clients. And to be honest, when was the last time 97% of people agreed on anything. So I think it really shows the strength of that priority. Another one -- another couple that actually stand out as well our leadership and shared purpose. 94% of people responded positively on average to questions in both of these categories. So in leadership, this includes perceptions of our people on our leadership's focus on culture as well as whether or not our leaders are role models of that culture.

In shared purpose, our people are positive that we have a purpose and values that are meaningful to them as well as there's alignment between the values and how we do business. I think this level of positive response is going to enable consistency and quality in the delivery of our business. So culture is embedded broadly across the organization and actively maintained as the company has grown. And this is because it's embraced and led by employees at every level of the organization. Much of this happens in the day-to-day in terms of how we interact with each other, with our clients, our brokers, our regulators, but also where people go over and above to connect and share experiences outside of the office. The impact of all of this though is strengthened trust, learning and collaboration. It's also importantly that said of ownership of Inigo success. And that commitment to build the brain against the objectives we've set ourselves. And this isn't just important tool the people you see up on this page. I also have a little video to share with all of you which give you a few more views from our employees.

[Presentation]

So let me close then with a brief word about this magic combination and how it opens up a world of possibilities. It does give us the capital to grow. That is fundamental. So that is a great place to start. And I would emphasize that we could argue the size of markets and our relative market share. In the big scheme of life, we are this big and the markets that we operate are this big, whether that's insurance or reinsurance. They are worldwide markets. The opportunities ahead to lean in and find opportunity is huge.

It's important that, again, you understand the joy of the Lloyd's model is the worldwide access that it gives us, not just the U.S. but beyond into markets in almost all countries. The other thing that I think is really apparent to me when I think about this combination is the point on here about a mindset to seize opportunities. It strikes me when I look at how companies develop over a 20-year period, the ones that succeed are the ones that really lean into an opportunity when they find it. I'd like to think that we can demonstrate to you in the first 5 years of our operation that we have seen opportunities and we have lent into it. And what I love about it is I think Radian, you can say exactly the same thing. When they saw us, they lent into it. They got ahead of the market, got in quick and we embraced the opportunity. So I think both organizations have this sense of, look, we see an opportunity, go grab it. Don't waste time talking about it, just go grab it. So this ability for both companies to see an opportunity and grab it and have the ability to do that is huge. And I think you've heard both sides of the house talk about the opportunities and the technology that we enjoy and the advantage that gives us.

And I think lastly, this held together with a strong culture, which I know everybody talks about culture. I would say, I think if you talk to the team, if you ask them about it, it's not just us, you ask them about it, it's tangible. I mean it really is tangible. So quiz them, please. I've shouted out the team. [ Tanjit ], I think I missed you when I shout out. [ Tanjit ] is our casual -- sorry, our international treaty reinsurance underwriter. So that could be treaty reinsurance in Australia, New Zealand, Europe, Japan. She is one of our brilliantly qualified actuaries. She also will never tell you that she speaks fluent Japanese, which, by the way, opens up over a glass of wine, numerous really, really funny stories. So do please make sure you do a B line for [ Tanjit ].

We are going to break for coffee now. You've done well. You stayed awake. There was one person like I'm not sure about, but everybody else looks like they're here. We're going to make it, I think, 10, 15 minutes, let's say for 15, if we need to get back sooner, we'll give you a shout. Please come back with some questions. Do ask them in the break, but you can come back and we'll do a little Q&A for a few minutes here. You can do it online if you want to and anybody watching can do that online or you can just raise your hand and we'll take questions. We look forward to seeing you again in a few minutes. Thank you very much.

[Break]

So welcome back, everybody. We've got about 20 minutes allocated for this. We're quite happy to cut it short to 5 if you can't listen [indiscernible] questions. This is the bit of the presentation that I'm doing the most. So one of the benefits of surrounding yourself with incredibly good people is you can leave them to answer all the questions. We're going to see questions live in the room. If you're happy to raise your hand, we have a couple of microphones. If you could please do the inevitable thing and wait for the microphone so that anybody who's dialed in can hear the question as well as the answer, that will be grateful. I know, Bob, you're manning an iPad somewhere there with questions which you can submit online if that's preferred and certainly if anyone is watching. But look, let's kick it off. If there are questions, we are delighted to try and answer them.

Michael, you've achieved very impressive combined ratios over the years you've been in existence, somewhere, say, in the mid-80s. I'm wondering if you'd be willing to share a long-term goal for combined ratio. Obviously, it can be variable. And then more specifically, how do you view the current rate down cycle? What kind of impact that would have? And then secondly, as you grow...

Can I -- I'm terrible forgetting questions. Can you keep the microphone and we'll try the first couple.

Well, it's just a related question.

I don't want to let you down.

As you grow, do you think your combined ratio is more likely to go up as you take on maybe different kinds of businesses or go down? So just what I'm really looking for is a long-term combined ratio goal and the impact that the current down cycle is going to be.

Yes, I wish I could give that to you. I feel like I'd be a lot richer than I am if I could do that. But we will try. Stuart, do you want to pick that up? And Russ talk about what we're trying to do in the market.

So I guess I'll pick it up by saying, obviously, we're not allowed to give you any forward guidance. I will leave that all to Dan later. But certainly, in the cycle we've been through rework. We knew when we started up that we were going into a very strong cycle. And we had an aim of writing combined ratio in the mid-80s. And for me, as the CFO, that meant by meeting the expense ratio in the low 30s, which is what you saw, which is why I emphasize that, unless you have a loss ratio that can get you to that level. As the market softens, we know that it will inevitably increase the combined ratio. It's just a function of [ NAVs ].

One thing I think we would is emphasize, and I think the 1 thing I had to my little talk earlier is that, some heartfelt thank you to Rick and the Radian Board and team for saying, write to profitability don't write for growth. And that's the big message, I think, that they've given us, and that absolutely fits in with our philosophy when I turn to Russel in a minute. So that will be our focus.

We have a number of lines of business. Not all of them will go down at the same time. Not all of them will go up at the same time. In Russell's illustration of the D&O market versus the property market, we can look again a liability market, which is probably increasing slightly at the moment. Our aim has got to be to try and write profitability, so less than 100% combined ratio. Plus, of course, you've got investment income. But just as a simple combined ratio, we have to have an aim of being under 100%.

Absolutely. So it's important to emphasize that every risk that we price our aim is price adequacy. And for me, I think that's typically that we will be targeting a mid-80s net combined ratio. Not necessarily precisely. It depends highly on the degree to which that risk correlates with everything else we do and the amount of volatility that's associated with that risk. So if that is the long-term goal then there is definitely going to be variability by cycle.

Today, we still see lots of adequacy in the business that we write. And I'd like to get back to that point about the absence of homogeneity in the pricing that we see, the disparity between a well-paid risk in 1 part and a less well paid risk in that same class. Our approach to understanding that risk better perhaps through our applications of data and analytics should allow us to differentiate effectively between the better and less good risks. And even in a tough market where the average price adequacy is impaired, we should still be able to find the best risks that allow us to pursue that attractive net combined ratio over time.

And it is difficult to give you a forward-looking statement as much as we would love to and thus difficult to know because the market is so hard to predict. I mean I find that you want people who react to the opportunities in front of this very hard to say with certainty what 12, 24 months now will look like in this marketplace. But I think the point you have made is with softer defining moment in our conversation with Radian was this, look, it's about underwriting excellence. That's what's going to drive shareholder value. It's not about growth and volume for the sake of it. And the fact that when Steve and Megan talk about it, it's the same grounded view of we have to get an adequate return to risk, hugely important for us. And I think 1 of the graphs showed -- try to show, this isn't going to be a linear top line story. I mean it's the anything I can tell you. It's going to be a jagged story according to where the market opportunity set some where the cycle sets.

And I may have misunderstood this a little bit, but it seems to me that your hook up with Radian could provide some more capital and growth opportunities, if you remain independent. So I guess the other part of the question really was, as you do grow potentially, take on new business or whatever, forgetting the time of the cycle we're in, will those businesses be done at roughly the same combined ratio? Or we should just assume that there would be a deterioration from the kind of businesses that you would be growing?

Craig, do you want to talk on that?

I didn't think you should make that assumption there. I think our outcomes will be dependent on business mix and the cycle. But there's no inherent reason why we should be less profitable if we're bigger than we were. There will be ups and downs. The key thing for us will be really leaning into those areas where we find adequacy. And the joy of being relatively new and relatively small is that there is still this universe of risk for us to grow into. And so for example, as we enter new lines of business, we're not lowering the hurdle rates that we seek to achieve by entering those new lines. And for us, it's still a big beginning of that out there.

I'd like to say [indiscernible].

[indiscernible] for 1 in, just in case.

All right. What you say is I think the other part that Craig made the comments on in terms of a very small part of your clients' business today and the opportunity where you see that rate adequacy to lean into it and find opportunities within that universe. So you're a small player, in a big, big -- so you don't necessarily have to stretch for new risk, new lines of business. You have to leverage your Horizon program, your focus on the customer, kind of find those opportunities to expand your wallet share with them. And I think that's where growth and profitability can be identified as you kind of right through the cycle.

I think the other thing is, well, it's fixing on a particular combined number, for example. I mean it's just 1 number, but it doesn't tell you the risk profile and you're up and downside. I mean I think -- so I'd be happy to write a higher net combined ratio is if the risk profile seeds that. I mean I think there are lots of things we can consider about what diversity it offers the portfolio, what is the level of risk and therefore, look at the return as what's an adequate return if you're operating in a narrow corridor. So I'm reluctant to give you a -- try and give you a single defining point.

Richard, do you want to just talk about cycle management, just kind of in general, the importance of that for the business you're in?

Yes. I mean from my point of view, the -- this question I've tried to describe in those slides, but it's not a linear top line story. It really speaks to -- I think the D&A was such a good example of that we rushed at that market when the opportunity was there because it was hard markets. We knew there was value in that marketplace. But we were more than happy to pull back when that rate decrease and the margin decreased. The success of our business will be a series of smart decisions, and there will be times when that's rushed forward and the time when that rushes back and we talk about it a lot. I don't mind if we reduce the premium and take a relax if that's the smart decision. So the important thing is that people don't feel under pressure to grow the top line regardless. It doesn't mean to sit back and relax, it means go hunt harder. But if we don't find adequate returns, then that's fine, we can live with that. They will come back.

Other question there.

Rowland Mayor, RBC Capital Markets. I was wondering if you could discuss in the U.S. casualty portfolio, how you set and review reserves, particularly for the lines that have generated charges for new district general liability, umbrella or excess in commercial audit?

Well, that's perfect. It's a good question, and it's a perfect 1 to hand straight to Craig. One is the managed shared accounts, and 2 is another qualified accurate. Craig, why don't you have a go?

And so the question is, how do we review reserves to ensure that they'll last. obviously a very topical question in terms of the cash -- U.S. casualty market. So what I'd say, first of all, is we have a quite fine line size in terms of what our net position is in U.S. casualty. So 1 of the most important things is if you do have more claims than expected, how do you make sure that your reinsurance kind of kicks in and protect your balance sheet. So fundamentally, we make sure we are -- we have sufficient reinsurance. We obviously look at a -- lot at actual versus expected claims. So what's our claims frequency and severity of claims, to make sure we're closely monitoring that. And we look by underwriting you the adequacy of reserves relative to the claims ratio.

What we tried to lay this behind you. So I can see her, she heads up our U.S. casualty team. We make sure that we are focused in some of the more shorter-tail entry segments. Sometimes people think about U.S. casualty as 1 big blob of exposure. And actually, by industry that exposure can be quite different. A rail company has a very different exposure to a chemical company, rail company, as an instant -- you know about it literally in minutes, whereas a chemical company, the exposure can go on for a lot longer. We try to skew the portfolio towards a slightly more shorter tail industry segments. And we are very focused on reserve adequacy in our U.S. casualty book of business.

I don't know if there's anything from a reserve position that you want me to...

I think on the benefits we have is we started writing in 2021. So we're actually not sitting on those reserves, look very horrible from -- or was it '16 through '19 or something? Yes. But it also -- a lot of our reserving will look at the industry benchmarks that have got that data in it. And you would hope that the market has slightly learned from those bad years by the time we came along. So -- and we're in a nice position that -- we have a relatively short history. So actually that does make reserving slightly easier.

And we have a French actuary as well who has a [indiscernible]. He's just mean. That's the best thing you can do.

And I guess just as a follow-up, can you discuss your view of rate adequacy in property markets and anything you learned at the sixth one, I guess, for you, 16 renewal.

It's a big renewal date for the regional, especially the Florida reinsurance purchases, and we definitely saw some risk-adjusted rate challenges there. But we also have seen some real improvements in the underlying risk to have see some legislative changes in recent years. So there was some rationale for some of those risk-adjusted or non-risk-adjusted rec returns coming down a bit.

But we still found good business. It's an area where we're very selective about the entities that we support, and there are some fantastic companies, but we only a support a small minority of the companies, for example, that are active in Florida, picking the best of the insurers that are active in that state.

And ultimately, we still find lots of opportunities to deploy capacity at decent returns. I think Florida is always going to be 1 of the global peak capacity zones, and that does help to ensure that there's still some rational balance between price and risk.

Will you think you're primarily for reinsurance or insurance as well?

Craig, do you want to touch on the insurance?

Yes, happy to and if you want to catch to Chris, he's here as well to head up our team. But again, fundamentally, as Russ described, we have seen rates come down fairly swiftly in that area. And as we manage the cycle, we mine for that. And so if we see rates come down more than we're expecting below the level that they should be at, we fundamentally will shrink our premium base.

Now I'm not saying that's what we've done there aggressively. But there are some risks that have fallen below the level of adequacy that we think is a good ROE on our capital base. And when that happens, as much we were part with customers, we're also the partner of shareholders and give them a good return. So we make sure that they reach sufficient adequacy, risk by risk. It's fair to say that in the U.S. property market, rates have come off fairly swiftly this year, but there's still a lot of business that we can write at sufficient margin. But when it does fall below the margin that we need, we will not write as much business.

And I think 1 of the answers that simple model of 1 office is very easy to stay on top of us to have the conversation to review risk to talk about it. It's very important for the -- picking some of the younger underwriters to know that it's okay to step away, and that's the right thing to do. So I think we enjoy the fact that it's very easy for -- sorry, very easy, that makes not easy at all. But Chris, at the very least, you feel as though you can see all the decisions, everything that's going on and have a proper debate about it.

And I'd say on the Horizon program. We've obviously seen some of those customers been able to achieve CP rate reductions. And so the question there is, are you able to maneuver and still get good returns on that. What's happened is some of these examples, we've had to redeploy our capacity into higher layers of different parts set program. We think there's still a good return. So we don't just continue with them regardless, but what we're able to do is actually redeploy our category to different parts of that program where we hit a good ROE, and they have kind of looked after us in a way that they probably wouldn't have if we haven't delivered some of the benefits of the Horizon program. So again, it's still a fairly sort of transactional market, but we're able to navigate that through those relationships.

Bose George from KBW. Can you talk about capital? Given your growth expectations over the next 12 to 24 months is that fully supported by internally generated capital. Can you talk about capital benefits from the Radian -- being part of Radian as well?

Yes. Dan is going to cover capital later, so I won't steal his thunder. But certainly, I think if we look at the model that we built, the profitability that we've seen over the first 5 years by Lloyd's underwriting, that account have been profitable from day 1, has generated the capital that you need to sustain the growth going forward. So obviously, when the market gets tougher and the profitability we've just been talking about gets less, the capital in our market will be slightly increased but we do hold a good level of buffer capital. And then above that, the grading, I think there are some other opportunities to get capital used around the group in an efficient way, which Dan will talk about later.

Just 1 follow-up on capital. Were there any period over the last, say, 5 years, where your growth was constrained by a lack of capital?

So another answer to that is actually, we originally raised $800 million from investors, not the $700 million that we said and we never managed to use the last $100 million of it, just because we had a lap in imagination.

I was going to remind you.

And say that we stuck to the macro writing for profit, and that's -- we were always sitting with some additional capital.

Harry Fong from ROTH Capital Partners. I believe you showed a chart that says that you expect roughly 40% of your losses did come from natural catastrophes. I'm wondering how you develop that number? Number one. Number two, what is the high low range depending on where we are on the cycle from a pricing standpoint, peak versus front?

I could take the first bit of that. That 40% is the number that represents our mean expected losses based on our actual or plans on which version of it that you saw, portfolio, which integrates the Inigo view of risk. So if, for example, we think that it's more likely that there are hurricanes in Florida, that is represented in that calculation. So it's a mean number. So the 1 number that you can be pretty sure that it won't end up being is that, but it sits within quite a broad range on a gross basis, but a rather narrower range of potential outcomes on a net basis because of the way that we hedge.

Can you provide those numbers?

I don't think we probably can, actually. But much I'd love to...

We'll monitor.

We certainly look at them and we try and operate within tight constraints and manage those numbers very carefully.

All right. There was a second part of your question, which I announced stupidly.

The cycle.

The cycle. Why don't you grab that one, then?

I think it's a good question. And obviously, if you look at Lloyd's and the sector, you can see the combined measures, if you go back over time, you can obviously see the cycle and how the combines ratio's go up and down. I suppose each part of the cycle has different features to it. So the first thing is we have obviously higher interest rates than last time. It was a soft market. So 1 could expect that maybe combined ratio does creep up a bit higher than previously because this time, you've got interest rates at a high level and therefore, insurers can supplement their earnings with investment income. So that could actually possibly increased to combine ratio more of time. The count of that is that obviously, the most important part of the combine ratio is the claims and actually trying to forecast over next 3 to 5 years, what events can happen in the tail that we're actually going to experience is a crystal ball type moment. And so really, if you look back over time, be it COVID or other events that were caught the tail, it's very difficult to forecast then.

That said, I think investors and individuals in particular, don't enjoy losing money. So if you look at the lowest combined ratio, if it ever goes above 100, it's unlikely to compete for a prolonged period because eventually, you are eroding shareholder value and you are obviously decreasing your asset base. And so if it continues to be our high level for a prolonged period, I think quite quickly, capital depart and we enter a new hard market. And if you look at carriers like us that are more or ritual than say in last 5 years, the carriers have done really well over a 40-, 50-, 60-year period, are those that can be considered in a soft market but very ambitious on in a hard market. And so for us, if there is a period where the market is soften, we will be considered, but then also looking around the corner to start, be excited again because actually, what follows the soft market typically is a hard market and a hard market is when actually you could create a campaign shareholder value over the medium to long-term.

And so I know it's a long-winded answer to your question, having to use that ranges, but I think it's the mindset to how to look at the market cycle.

All right. Good answer. Thank you very much, indeed. Look, I think we sadly ran out of time. We are around. So again, over lunch if you want to ask questions, you're very welcome. I would just say at a personal level, I appreciate the engagement. It's really nice to have questions. I was worried there was going to be a tumbleweed moment here where we're going to certainly just stare with each other. So that is the end of the Q&A, and it is my pleasure to welcome the fantastic Dan Kobell as CFO of Radian.

Good morning. So as you've heard today, Radian has 2 leading insurance businesses and everything we do ties back to a simple framework. We manage capital with discipline to generate earnings from our businesses and build value in how we deploy it, which leads to our North Star of delivering attractive returns over the long term across market cycles.

This slide shows how our 2 insurance businesses contributed to this goal in the first quarter of this year. We typically report our balance sheet on a consolidated basis, this view shows summary balance sheet metrics for our 2 segments: Mortgage and Specialty. In the first quarter, our mortgage segment delivered a 15% return on its segment-level equity. While our specialty segment return on equity was 15.1%. We are pleased to have two high-quality insurance businesses, both serving attractive markets, accessed through world-class teams, both well capitalized and resilient, both aligned strategically and culturally and both positioned to deliver attractive returns.

Looking at the capital strength of our two businesses in more detail. Radian Guaranty, our mortgage subsidiary, is subject to two capital frameworks and continues to be well capitalized under both of them. Under PMIERs, which you heard Megan and Steve described earlier, we maintained a $1.6 billion buffer as of the first quarter, 41% above the required level. Our statutory capital total was $5.7 billion, which has grown by $1 billion over the last 5 years and is among the highest in the industry. Our statutory risk-to-capital ratio of just over 10:1 is as low as it has been in 20 years. This strong capital position is foundational. It supports both the resiliency of the business, and our ability to generate and deploy capital at the group level.

And Radian Guaranty has continued to be a powerful capital generator. Since 2021, it has produced over $4.3 billion of statutory net income. And given the strong capital levels that it continues to hold, most of these earnings have become available to our holding company, Radian Group. Of the $4.3 billion in earnings, $3.5 billion or 80% has become available to Radian Group through a combination of quarterly distributions and the $600 million intercompany note that we executed in 2025.

The remaining 20% of earnings has remained within Radian Guaranty to further bolster capital levels in support of our growing Mortgage Insurance in Force portfolio. This balance between distribution and retention of earnings allows us to both support growth and maintain resilience. And the test of any insurance business is how it performs under stress. Our mortgage insurance business is well positioned to navigate a severe macroeconomic downturn.

This slide illustrates the expected performance of our mortgage business through a severe scenario that includes an increase in unemployment to approximately 10% and a 20% decline in home prices, both consistent with the environment that we saw during the Great Financial Crisis. As shown, we would still expect to maintain positive earnings and grow book value throughout this scenario. In addition, we project that our PMIERs capital position would remain strong, well above the required level and Radian Guaranty would be positioned to continue paying dividends to our holding company.

In this scenario, we would expect Return on Equity for our mortgage business to recover to prestress levels within 2 or 3 years. This resilience is critical. It allows us to lean in and continue deploying capital when opportunities are most attractive in the cycle. Okay. Now turning to Inigo. Our Specialty segment is well capitalized with $3.7 billion of assets, like Radian Guaranty, Inigo is held to multiple capital frameworks. Both the Solvency II and Lloyd's capital requirements are calibrated to an extreme loss event, and Inigo is well capitalized relative to both standards.

As a Lloyd's syndicate, it benefits from the Lloyd's markets financial strength ratings and Lloyd's business using ratings of AA- for S&P and Fitch, and A+ for A.M. Best. The Lloyd's market offers a unique capital structure that provides both stability for customers and flexibility for carriers. Inigo's capital requirement at Lloyd's is divided into two equal sized tiers, each with their own degree of flexibility. Tier 1 capital was primarily funded through cash and investments. However, there are also Tier 1 capital facilities that are available to financially strong syndicates to use in meeting their capital requirements subject to Lloyd's approval.

Tier 2 capital has a greater degree of flexibility and can include bank letter of credit facilities, which allow for an increased level of flexibility at an attractive cost. Today, Inigo uses a letter of credit facility for approximately 40% of our total Lloyd's capital requirement. With Radian's financial strength as a parent company, we have the opportunity to explore increasing the letter of credit facility towards the 50% limit as well as considering potential Tier 1 capital facilities, both subject to Lloyd's approval.

The availability of these flexible capital structures combined with the financial strength that Radian already enjoys across the enterprise, offer attractive options to capitalize our specialty business at an attractive cost. We look forward to updating you on our progress as we position the specialty business for even greater capital strength and efficiency in the years ahead. A key differentiator for Radian is how we assess and manage risk at the enterprise level, and how we use nearly 50 years of data to inform our risk decisions.

Our enterprise risk and capital management function works across the insurance businesses to set and manage risk tolerances, assess the performance of our business through a variety of scenarios and evaluate new opportunities in the context of our existing risk exposures. While day-to-day underwriting decisions continue to be made within each business, this enterprise function allows us to take a holistic view of how we deploy capital to drive returns and safeguard the business against evolving risks.

Across both businesses, we maintain an extensive outwards reinsurance program to reduce our net exposures and manage our capital positions. In both mortgage and specialty, we use traditional reinsurance, including quota share and excess of loss programs to significantly reduce our net exposures, as you heard both Steve and Russell mentioned earlier. In addition, we access the capital markets for efficient risk transfer through structured transactions, including Radian's Eagle Re Mortgage Insurance-Linked Notes program, and Inigo's Montoya Re Cat Bond program.

We also maintained a disciplined and thorough counterparty management framework working with highly rated reinsurers and closely monitoring any concentrated exposure. In addition to expanding our addressable market, Inigo adds meaningful diversification to our earnings profile. As shown here, Mortgage Insurance loss ratio have shown almost no correlation to Lloyd's loss ratios over the past 15 years. Although we do prepare for an event that would impact both of our businesses simultaneously. This lack of correlation reduces the likelihood of this occurring and provides an additional layer of risk management.

In addition, the low correlation of the two underwriting cycles enhances our ability to manage capital across both businesses and lean into market opportunities. Another important pillar of strength for Radian is our investment portfolio. Following the Inigo acquisition, Radian's enterprise investment portfolio stands at $7.1 billion, and is comprised of well diversified high-quality securities with an average rating of A+. The strength of our investment portfolio and our strong liquidity profile allow us to pursue opportunities to generate incremental value, including by optimizing our strategic asset allocation and total duration profile.

In the first quarter, we generated $70 million of net investment income from our portfolio or an annualized run rate of approximately $280 million in earnings. As we have discussed before, we have a number of options at Radian for deploying the capital we generate. On this slide, we show the 5 primary options that we have evaluated over the past several years. Our highest priority is supporting the organic growth of our 2 insurance businesses and pursuing attractive risk-adjusted returns in both the mortgage and specialty business.

In addition, in the ordinary course, we continue to evaluate options for accretive M&A, including potential transactions that offer access to new markets, provide earnings growth and further increase the diversification of our company. Our return threshold for M&A is high given the strength of our existing businesses and our overall return targets. In addition to growth, we are also mindful of our overall financial leverage profile and consider debt reduction as a potential use of excess capital as appropriate. After considering these uses, we have been disciplined about returning excess capital to our stockholders.

We've done this in two methods in a programmatic way through our attractive ongoing quarterly dividend and opportunistically through share repurchase, which we believe is an effective and efficient way to return excess capital to stockholders. As shown on this slide, we have executed on all of these areas since 2021. Our mortgage insurance in-force portfolio has grown by $36 billion as we continue to write significant levels of high-quality new insurance business priced with insight and discipline, as Steve noted earlier. We executed the $1.7 billion acquisition of Inigo earlier this year, a transaction that transformed our company and has already provided significant financial benefits as reflected in our first quarter results.

We reduced our long-term debt by $350 million, reducing the interest expense that we pay and improving the financial strength of the company. We also returned $710 million in capital to our stockholders through quarterly dividends, paying the highest yielding dividend among our mortgage insurance peers. And we purchased $1.6 billion of our shares reducing our share count and driving $700 million of accretion in book value. And executing on these priorities, we have used our capital to make Radian a stronger and more diversified company, one with double the revenue, higher earnings, lower debt and a much larger addressable market.

During this time, our financial strength has been recognized by our rating agencies, S&P, Moody's, and Fitch, each of which has upgraded Radian Group to an investment-grade financial strength rating. Taken together, these actions have made Radian a more diversified company with stronger earnings power and a broader opportunity ahead. The timing of how we deploy our capital may not be linear. At Radian, we evaluate the macroeconomic environment around us and are disciplined in the level of liquidity that we maintain.

The embedded earnings in our mortgage insurance for portfolio and the visibility that we have into the resulting capital flows from Radian Guaranty, provide us with a degree of predictability in our capital planning. And that allowed us to restart our share repurchase program in the first quarter of this year shortly after the Inigo transaction. This capital strength and flexibility enabled us to take advantage of an opportunity to return capital via share repurchase at an attractive value. And Radian has a strong history of returning capital to share repurchase.

Since 2018, we have purchased 43% of our shares using a total of $2.3 billion. The 94 million shares that we purchased would have a book value as of the first quarter of $3.3 billion, demonstrating the significant value that has accrued to our shareholders from this activity. Over this time period, we purchased shares at a range and valuation levels from a discount to book value up to a 40% premium above book value.

In every case, the purchases have been accretive, and we continue to believe that our shares trade meaningfully below their intrinsic value. These repurchases have helped drive significant growth in key metrics, including earnings and book value per share. And the expected financial accretion from the Inigo acquisition further enhances the potential return from share repurchase into the future.

At Radian, we have built a model designed to generate capital consistently, manage it with discipline and build value over time. With two complementary, uncorrelated businesses and a flexible capital framework, we are well positioned to deliver attractive returns over the long term and across market cycles.

And now I'll turn it over to Rick for some closing comments.

All right. So I'm going to do something that's going to make some people in this room very nervous. Where is Emily at. So going to go a little off-script, all right? So I want to just kind of step back and reflect upon what you've heard today a little bit. And then I'm going to go back to the podium and kind of stick my landing, okay? What a difference 4 months makes? Think about it, 4 months, we took these two individuals, Meghan and Steve, I remember we tapped them on the shoulder and said, we want you to lead our Mortgage Insurance business.

Work as a team, work as a group, what they've done over the last 4 months, take our MI team completely reimagine the business into the future, create excitement about an opportunity to build that business going forward and bring us today. So we're -- it's a great business. But the future that they're creating, I couldn't be more excited, more proud of. So thank you. Four months ago -- almost 4 months ago, after spending a year this past year together, we brought this Inigo team on board to Radian Group. You can kind of see the energy from that group, except for Richard.

All right. But you can see that energy that brings. It brings an entrepreneurial spirit. It brings a growth mindset. It brings a global market, all right, to our business expands our opportunities. 4 months, that's the transformation that Radian has gone through. And along that side, we asked Dan and Rob, where Rob is? Rob is hiding somewhere, there he is, to lead our financial functions. And so change, yes. Forward leaning, yes. Opportunity, yes. So I couldn't be more proud of Meghan and Steve, could be more proud to have the Inigo team part of Radian, and Dan and Rob have done a great job. But the teams come together.

And that energy, I hope you feel through today, kind of the teams coming together towards a forward view, and that's what gets me excited. When I kind of look and sit there and listen to this whole story that I hear day after day after day. And maybe sometimes I play into that story, I get excited. So I hope that you all got to feel for how this company has really kind of transformed from what it was even 6 months ago to today in terms of opportunity, in terms of leadership, in terms of team.

Obviously, Mike and I, are going through our transition, which I couldn't be happier about, and we're excited for Mike to kind of take that leadership role into the future. This is an exciting time. So I just wanted to kind of reflect what a difference 4 months can make. Now for those who I've made uncomfortable, I will move back over here and go through. So we've covered a lot today, and I stand between you and lunch, all right? And I hope you get to enjoy lunch, but I'm going to close on this.

Today, you've heard how Radian has evolved into a global multiline specialty insurer, built on a strong foundation, strategically advantaged by a set of core enterprise competencies executing one clear strategy as we have said throughout the day through two complementary businesses. I think it's important to mention that we've also -- we also complement each other through our distinct business models, one more established and scaled the other earlier in its development and more entrepreneurial.

Together, the combination brings out the best of each. This is already having an impact as our teams work together and learn from each other, we acquired a great company Inigo with excellent talent, but the combination of these two businesses is what is truly special and why I'm so excited about the future of Radian Group. And importantly, you've heard directly from many members of the exceptional team responsible for executing our plans. All positions us with the strategic capability to manage capital to generate earnings and build value, and you heard Dan talk about that.

I guess I have to flip slides too, right? That was that slide I was just talking about. Now we'll go to this one. What we believe is equally important is where we are today. We have delivered strong operating performance. We have built a more resilient and diversified earnings profile for the future. We have meaningfully expanded our opportunities start with the acquisition of Inigo. And as you've heard we believe that our valuation represents a compelling investment entry point.

Our strategy is clear. Our businesses are strong. Our team is unmatched in my opinion. We are confident in our direction, we are confident in our team, and we believe we are well positioned to deliver long-term value for stockholders. Thank you again for being with us today, and we look forward to continuing the conversation. Lunch is in the pre-function area, which is at the other end of the hall and then join us again back here at 12:45 for the fireside chat between Mike and I. Thank you very much.

[Break]

Yes. Thank you for coming back, everybody. That was lunch.

It was good. Did you get all your questions answered? For those of you who had questions, hopefully. All right. Well, so Mike and I are going to do a little back and forth, so you can learn a little bit more about Mike. And I feel like I know a lot, but I'm going to try to learn a little bit more right now. Yes, you're in trouble.

So look, as many of you have heard today, we've known each other for a while. We were both a lot younger when we first met. But I think it's an exciting time for you to join. And I just -- I'm kind of curious as to why are you excited about this opportunity? What's -- you've been here all of four days. And I felt like after four days, I knew everything, Mike. I don't know about you. How are you doing?

No, it's been incredible, and I'm super appreciative of the opportunity to overlap with you, Rick, and to be able to learn from you. And it's actually like a great way to get to know everybody and ensure that we have a smooth transition. And so that's been wonderful. I mean, I think I'll probably like reiterate a couple of things that we saw during the presentation that I'm really excited about, that struck me. I think it starts with a really strong foundation. I mean, we've got this -- you saw the stats of mortgage insurance business that just grows year-over-year-over-year, steady growth in book value, great consistency.

But historically, we've had more capital than we had places to put it. And with the acquisition of Inigo and having access to this large specialty insurance market, all of a sudden, it's a whole new world. And Dan showed the slide that showed the way we think about capital allocation. And historically, again, it was mortgage insurance. And if we had excess, maybe we buy back stock, maybe we pay a dividend, maybe we pay down debt. Now we have mortgage insurance.

We have specialty insurance. We can still buy back stock. We can still pay dividends. We can still pay down debt. And by the way, we could also hang on to some of that capital and let the spring coil a little bit and see if there's another platform that we want to add to it. So when you put all that together, it's just a -- we've talked about the transformation of Radian, it really does feel like a transformational time. And I think the company has never been better positioned.

One thing just to add to your comment that you're going to learn is that transparency. We have to capital flow from Radian Guaranty to Radian Group that creates kind of this flywheel approach of just kind of managing capital, and how we invest it. And so I think many of our investors have kind of seen that over the years, but it's really a powerful thing, and the combination of that with Inigo and other opportunities, I think, just creates a great platform going forward. So Mike, look, I've followed your career. You've gone -- you don't like to be characterized as a mortgage guy because your -- by background, you've worked with some of the largest financial institutions.

It was by accident, didn't happen at all.

Mike and I have talked about that over the years because before I came to Radian, I would have been that mortgage guy. But from a -- from your career, you worked at some of the largest, most sophisticated institutions; you've been part of transforming businesses. I know you're highly interested in technology, and how that plays into it. Kind of how do you think about the opportunity from a Radian perspective? And what do you bring with -- from those experiences to Radian? How do you think about translating that background into what you want to bring to Radian?

Yes, a few thought. I mean, for those of you that aren't familiar with my background, I spent most of my career at JPMorgan Chase, and it was a wonderful journey. I described it as like the pre-crisis, we were a good global bank and kind of the crisis, it kind of showed, and/or was the catapult for us becoming the biggest and best bank in the industry. I started out, I described it, as a happy retail banker, and most of our -- across all of our consumer businesses other than mortgage.

Mortgage was the place where talented people went, and then I never saw them again. And I got the call at some point to lead servicing there, and then ultimately lead the business. Went to Wells Fargo, where I led the consumer lending businesses, which included home lending, auto, credit card, personal lending, student lending business that we ended up selling.

And then to Mr. Cooper, where it's -- for those who aren't familiar with it, and certainly, the non-U.S. crowd probably isn't, but we were the largest mortgage servicer in the industry, servicing about $1.5 trillion in mortgages, and ended up selling the company to Rocket last year. But across all of those businesses, it has been about risk-based capital allocation. So it's the -- Mr. Cooper buying servicing, it was, should we do it through our correspondent channel, should we do it co-issue market, should we acquire in the open market, or should we do it directly from customers?

And each of those had different return profiles, and we flexed in and out of them as the environment changes. Certainly, at a bank, lending for your balance sheet, it's very much -- the better times being out of different markets. So it's not mortgage insurance, it's not specialty insurance, but if it's not siblings of those businesses, it is at the very least first cousins that have the same concept.

The one other thing I'll say is, and it's been interesting even talking to so many people in the insurance industry here who have said, "Oh, wow, the banking industry seems like they're more advanced in using data and technology to enhance the business." And I kind of feel like I've been a dissatisfied banker for much of my career, saying, "Can't we do even more with data and technology to make the business better."

And I think that will be an opportunity for Radian. As far as I can see, the technology is developing so rapidly, and how do we have the ability to deploy data, deploy technology, but do it in practical ways, they're going to create real value for our shareholders?

Yes. As you heard, and I know, Richard, what do you referred Blood Brothers or something like that. One of the things that struck me when we first met the Inigo team, which was just over a year ago, Dan, right, May 7 of last year, I think, is the common language that spoke between the companies around data and analytics and in the way kind of pricing, to use a P&C term, rate adequacy, to use the MI term, EV, just kind of thinking about optimizing risk-adjusted returns.

When I think about your background from a banking point of view, as you and I have talked about it, that capital allocation framework that you've used there. It does apply to this business. And the way we use it, and the deep analytics that come along with it, is, I think, one of the great complementary aspects of these two businesses. So I think you're going to have some fun with that.

Yes. Well, I'll put the question back to you. You've led the company for nearly 10 years. Like, what are the accomplishments you're most proud of? What have you seen from Radian over that period?

Look, as you kind of go through this process in life and you think about kind of retiring at this point in my career. There's a lot that I reflect upon. There's a lot that I think about that there's things you think you might have done differently. There's things you think that you're very proud of. So, we'll focus on the things I'm proud of. But I think, look, every part of the journey is just really interesting. But the things that I kind of reflect back over the past 10 years, I think about the team.

And that may sound just kind of -- of course, you think about the team. But about the team that we have in place today, the team, the quality, the people, their character, the values that we live by. And then we brought this really great team from Inigo alongside a team that had similar values at Radian, and we put these two teams together. So, when I kind of hang up the cleats, or whatever to put the paddle down, or something like that.

I think you leave the shoes in the middle of the mat court.

Yes, okay. There you go. All right, all right. Take the helmet off, whatever it is. I'm going to look back and probably -- you reflect on things, I'm going to reflect upon the people that I encountered through this process and the team that I think is in place today. I have to say, the ability to watch our MI business, and where they're headed. As I mentioned earlier, what Megan and Steve have done in the last 4 months, 3.5 months to really reimagine that business with the team, truly excited about it, and I'm proud of them.

And then bringing this Inigo team across the finish line and bringing them into the Radian family, I think, is -- you kind of go across it. But I would also -- the last thing I would say, and again, I'm probably forgetting five other things, but I'll tell you about them as we go. The other thing I would just -- I'm very proud of is who the company is. We're -- we talk about values and Richard and Andrea talked about the values within Inigo.

And that day when we met in Philadelphia with the Inigo team, we felt a chemistry around culture, around values, around how we want to be recognized and operate as a company. But I think we're a highly responsible company. I think we value who we are as a company, and our position in our marketplaces, our position in our communities, our position -- responsibility we have to investors and our employees alike. So I'm proud of the company we are. So as I kind of reflect back, that's something.

No, that's awesome. And I vibe with that. To push you on, you have a lot of people who back the company through different cycles, a global pandemic, moments nobody could have predicted. And this -- maybe it's like selfish for me, so I can speed up my learning and finding things. But what did you learn through that you just couldn't have known Day 1 and...

Yes. Actually, you bring up the pandemic, everybody remember that thing called COVID. Remember, we all went home, and we worked from home. I remember -- I think Eric is in the room here, Eric and I flew to Florida that night after we made -- as a team, we made the decision and send everybody home to work, right? And you wonder if technology is going to work, you wonder when you're going to see each other next. We barely knew what Zoom was at the time, right? But it's a great example because the day after -- and we could tell a whole bunch of stories about COVID.

But I think the one thing that I learned at that point, I was reminded of -- is the resiliency of the team and their ability to overcome pretty much anything. And we know that was a great challenge, but the next 1.5 years was also very challenging. But I would say, since day 1, when I joined Radian, really not knowing anybody at all. I think what I've learned, and what you're going to learn is that -- and we've seen the same thing with the Inigo team.

This is a team that's committed to really figuring out how to work together as a team, highly resilient when things don't go the right way, kind of figuring out how to solve problems and kind of playing through the ups and downs of a business. And so I think we can learn all about capital models. We can learn all about risk parameters, and we can learn about a whole bunch of things about the business. But if you don't have the team in place to manage through that and demonstrate resiliency through good days and bad, companies aren't going to succeed.

And I've seen our team go through enormous challenges through cycles, through business challenges through self-inflicted wounds from time to time, right? You ever experience one of those? And they found their way through it. They worked their way through it. So I think you're going to learn that the team that you're going to take responsibility for leading is a team that just wants to do things the right way, wants to figure out how to solve problems, and is highly resilient and innovative and thoughtful in terms of their approach.

Yes. That's awesome.

Yes. So for you, so for you, there is understanding you made a little stock purchase.

Yes.

And I'm curious about your perspective of that. I think probably it's all been -- therefore all in the public domain, right? So...

That's for, we're good.

Yes. Yes, we're good. So I'd be curious about your perspective on that.

Yes. It was very important to me to be an owner of the company from day 1. I'm excited to do it. And the valuation made it easy and exciting. It's -- you saw in the presentations, you've got two businesses that are earning mid-teen ROEs through the cycle. And if I have the ability to invest money and know I was going to get 15% a year return, I would do that all day long because I know within 5 years, I'm going to have more than double my money. And...

You did the math. You're good at math.

Thank you. Yes, that's the -- it seemed like an important qualification for the job here. But it's -- but like on top of that, there was also the slide that Dan showed that showed our multiple, I think it showed 1x. We're actually, I think, trading a little bit below 1x right now versus the broader insurance industry benchmark, which I think was 1.9x.

So, in addition to the ability to earn good returns through the cycle, there's also an opportunity to re-rate to what we think is a more appropriate recognition of the value we create. So, it's a little bit of a reiteration of the excitement I have about the platform that we have. And it was fairly easy to be -- if I'm being honest, I set a certain amount of money as...

Beth would say we should always be honest.

Well, that's good. I try to always be honest. But I'd say a certain amount of money aside and I kind of -- I ended up with a little bit more shares than I thought I was going to. So that was nice.

Yes, yes, that worked out well. All right. So you've been here all of 4 days. And you talked about this a little bit earlier, but I just -- I think it's probably good to kind of go back to it. What's been your impression so far...

Yes. Well, you talked about it. My answer is actually kind of the same, which is the team. And I've had an opportunity day 1 and 2, I was in Wayne. I was -- came in yesterday and been here today, and as Richard introduced, a lot of the Inigo team is here. So, I got to meet a lot of people that I hadn't met before, other than to see like names on org chart boxes and things like that. And you have to be -- I'm impressed, and I hope you are impressed.

And if you're not, then you just need to get to know people better. Because you've got a team on the mortgage insurance side, that -- like I don't know if I met anyone who's been here less than a decade, yes, there is like -- there is a deep knowledge and understanding of this business.

And when you start to double-click into it and get deeper the things that Steve and Megan were showing, like, there is an analytics capability that is really, really good. I've been in some outstanding organizations in terms of the data and analytics, and it is something real that explains the better credit performance that you're seeing in the book. With the Inigo team, it's like I admit Russell and Stewart and Richard and they were amazing, and I love their story of like 3 guys who retired, learned that retirement didn't totally agree with them, and said went over.

They failed that.

Yes, they terribly failed their retirement and said, what if we can create a company that would be like the dream company that we would have worked at our whole career. And it sounds great. So with dinner last night, I was really trying to probe for whether that's real or not, and it is. And part of that is the culture, and part of that is the people. And this mindset, the curiosity, the commitment to analytics, the commitment to having a low ego, where you're focused on getting it right versus being right, getting the right answer versus like being the person who has like political clout in an organization is real on both sides of the business. And it's what gives me confidence, and I hope we'll give all of you confidence, that we are going to make good decisions and the way we allocate your capital.

So, I want to kind of back up a little bit because you and I have talked over a period of time here, even before this process of you joining Radian. We've known each other, as I said, for a while. We're -- give me the elevator pitch of why you came here. What just -- like, I know you've been excited because you and I have talked about it.

Yes. I said it upfront as well, which is it is great people, great culture, and a great platform...

But you didn't know any of that until you got here other than...

I said it looked good from the outside. I'm upgrading, it's great, but it was -- I've known you a long time. It gave me a little bit of an idea of -- I'm not surprised in terms of what I'm seeing in terms of the culture of the organization. So, yes, I did get increasingly excited as I spent time with you, as I spent time with the Board, as I spent time with the team. And yes, I couldn't be more excited. I think we have time for one more question, and I'm going to ask you, so, I don't have to answer it.

But seriously, you've made the comment to me and our team a number of times that a few months from now, you're going to transition to being our biggest cheerleader. And we want our cheerleaders to be happy. So what is -- what does success look like to you 5 years from now with the foundation you built? What do you want your legacy to be? How do we help carry that forward?

Well, I appreciate that. I think when you kind of look forward, you kind of take the platform you have today, Mike. And I've said this a number of times, I couldn't be more excited to pass the baton to you because I think you're the right person at the right time, and I'm excited about that. So with that -- I start excited. I hope I finish excited.

Me too.

You will do a great job. When I look at it, and I say, -- and Richard and many of us have spent time talking about this. I think the opportunity is that this is a very different business 5 years from now. I think it's much more of a global business. I think it's got an opportunity to leverage that great foundation of an MI business today that we've talked about. I spent a great deal of time. But I think it's going to leverage expanded opportunities and grow on a global scale across the broader insurance market, allocating capital very effectively to drive those risk-adjusted returns.

So, I think when we look at it, it will be a track record where not only myself, my grandchildren. I appreciate what you did. But the second thing is that investors appreciate that this is an opportunity for a story of compounding value, right? That consider -- through the cycle, there's going to be volatility. And I think the volatility creates opportunities. So, as you go forward and we look out 3, 5, 10, 20 years from now, right? I think Radian will be a much different business. I think it will be defined on a global scale.

I think the team will be -- continue to be unmatched on a different scale. And I think it will leverage the opportunity that it has today to go forward. So, personally, as I sit here today, I couldn't be more excited about, and I said it earlier in the closing comments about where the MI business stands and the opportunity for it to go forward in a really, kind of innovative, and transformative way. The addition of Inigo and the way we manage capital and the team and culture. But I think that's -- those are all the building blocks that kind of catapult this business forward, so 5, 10, 20 years ago, it is a global force different than it is today, and I think that opportunity is ahead of it.

So I will wrap then by saying, our job as a team is to make you proud and to make all of our shareholders proud. We're going to get after it. We hope you're as excited about the future of Radian as we are. And we really appreciate you all being here and look forward to interacting with you as we wrap. So thank you.

Thank you very much.

Hello, and welcome to the Annual Meeting of Stockholders of Radian Group Inc. Please note that today's meeting is being recorded. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Howard Culang. Mr. Culang, the floor is yours.

Good morning. My name is Howard Culang, I'm the Non-Executive Chair of the Board of Directors of Radian. I would like to welcome all of you to Radian Group's 2026 Annual Meeting of Stockholders is being held via live audio webcast.

I would like to call each stockholders' attention to the agenda that outlines the order of business for today's meeting. I will act as Chair of the meeting, and Elizabeth Diffley, who is EVP, Senior Corporate Counsel and Corporate Secretary of the company, will act as Secretary of the meeting. It's now approximately 9:00 a.m. and in accordance with the Notice of the 2026 Annual Meeting of Stockholders, which was sent to you with the Proxy Statement, I call the 2026 Annual Meeting of Stockholders to order.

If any stockholder would like to access a copy of the Annual Report or Proxy Statement, links to those documents are located in the Meeting Documents section at the right of your screen.

Before we proceed, it's my pleasure to introduce Rick Thornberry, Radian's Chief Executive Officer; and Daniel Kobell, Radian's Interim Chief Financial Officer. Also in attendance today are all of the members of our Board and several other members of senior management. John Beasley, representing PricewaterhouseCoopers LLP, company's independent registered public accounting firm, is also present this morning. Mr. Beasley will be available during the question period to answer any appropriate questions you may have.

And now to the business of the meeting. In fairness to all stockholders in attendance and in the interest of an orderly meeting, we ask that stockholders limit questions to those pertaining to the business of the meeting.

Would Ms. Diffley now report on the status of the meeting?

This meeting has been called by notice dated April 2, 2026, and the company has received proof that the notice of Internet availability of proxy materials was mailed and that the Notice of Annual Meeting, the company's 2025 Annual Report, the Proxy Statement and Proxy Card were filed and made available on or about April 2, 2026, to each stockholder of record as of the close of business on March 23, 2026, the record date for this meeting. A representative from Computershare Shareowner Services has been appointed as Inspector of Election to conduct the vote at this meeting and any adjournment or postponement. The Inspector of Election has advised us that a quorum exists for each matter.

Thank you, Elizabeth. On this basis, I declare a quorum present and this meeting duly convened and competent to proceed with the transaction of business. I now declare the polls open.

If you have already submitted your proxy, your shares will automatically be voted in accordance with your instructions on the proxy card, and you do not need to take any further action unless you wish to change your vote. All stockholders of record who have not yet voted or wish to change their vote, may do so now by clicking the link provided on your agenda to cast your vote.

Throughout this meeting, we may make forward-looking statements, which are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of these risks, please review the cautionary statements regarding forward-looking statements and the risk factors included in our 2025 Form 10-K and subsequent reports filed with the SEC. These are also available on our website.

Also, during this meeting, we may refer to certain non-GAAP financial measures, which may include adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity. A complete description of these measures and the reconciliation to GAAP can be found on the Investors section of our website.

Thank you, Elizabeth. There are 4 proposals to come before the meeting for stockholder approval. The Board of Directors has recommended that stockholders vote in favor of each of directors nominees and the other 3 proposals. The reasons for the Board's recommendations are set forth in the company's proxy statement.

First order of business is the election of directors. Is there a motion to elect each of the 11 nominees for Director?

My name is Noel Spiegel, and I am Chair of the Governance Committee of the company's Board of Directors. On behalf of the Board of Directors, I nominate for election as Director, each of the nominees set forth in the proxy statement.

The second order of business is to approve by an advisory nonbinding vote, the overall compensation of the company's named executive officers. Is there a motion to approve this proposal?

I move that the overall compensation of the company's named executive officers be approved.

Third order of business is the proposal to approve the Radian Group Inc. 2026 Equity Compensation Plan. Is there a motion to approve this proposal?

I move that the Radian Group Inc. 2026 Compensation Plan be approved.

The fourth order of business is the proposal to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm, for the fiscal year ending December 31, 2026. Is there a motion to ratify the appointment of PricewaterhouseCoopers?

I move that the appointment of PricewaterhouseCoopers LLP be ratified.

The online voting for each matter voted upon at this meeting is now closed. Will the Inspector of Election, please tabulate the votes.

With the Inspector of Election, please report the results of the vote.

Apologies. Mr. Chairman, having conducted the election and vote at the 2026 Annual Meeting of Stockholders of Radian Group Inc. I can report based on my preliminary tally that the stockholders have voted for, the election of each of the nominees for director; for, the approval of the overall compensation of the company's named executive officers; for, the approval of the Radian Group Inc. 2026 Equity Compensation Plan; and for, the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year ending December 31, 2026.

Based on the report of the Inspector of Election, I hereby declare that each of the nominees for Director has been duly elected and proposals 2, 3 and 4 have been approved. The Inspector of Election will certify the final results of the voting.

While this concludes the formal business of the meeting, at this time, I would like to introduce our CEO, Rick Thornberry, to give a brief report on the company. Following Rick's remarks, we will address any questions that relate to the business of the meeting that were submitted during the meeting.

Thank you, Howard, and thank you all for participating today. Before we close the meeting, I want to reflect on where we have been, what we have accomplished and where we are headed.

For nearly 5 decades, Radian has been one of the leading mortgage insurance companies in the United States. We have built a high-quality portfolio, a strong balance sheet and deep customer relationships while maintaining a consistent track record of delivering stockholder value. I am proud of that legacy.

Earlier this year, we took significant steps to build upon that success and position the company for long-term growth and value creation in 2026 and beyond. On February 2, we completed the acquisition of Inigo Limited, a highly respected Lloyd's of London specialty insurer. And with that, Radian became a global multiline specialty insurer. Inigo is a leading Lloyd's business built by world-class underwriters with deep expertise across global property, casualty and reinsurance. Lloyd's of London is the world's leading specialty insurance marketplace, and this acquisition gives us a meaningful seat at the table in a much larger global specialty market.

Importantly, Inigo's model aligns with our core strengths, disciplined underwriting, data-driven analytics, and strong risk management. As part of Radian, Inigo operates as a stand-alone business unit, retaining its leadership team and culture while benefiting from our capital strength and enterprise capabilities.

What excites me most is how naturally these businesses fit together, we expect our mortgage insurance segment to remain a powerful capital-generating engine that supports families across the U.S. achieve their dream of homeownership. Inigo brings a globally diversified specialty insurance portfolio that complements what we already do well by expanding our geographic reach, enhancing our ability to deploy capital across market cycles and adding uncorrelated risk diversification.

Importantly, the transaction reflects our capital discipline. Consistent with our long-term approach to balance sheet management and capital allocation, we funded the acquisition using existing liquidity and excess capital without raising new equity. None of this happens without the financial strength and flexibility we've built, including the strong results we delivered in 2025. So let me spend a moment there.

In 2025, our mortgage insurance business grew insurance in force to an all-time high of $282.5 billion, wrote $55 billion of new insurance and generated net income from continuing operations of $618 million. We grew book value per share by 13% and returned $576 million to stockholders through dividends and share repurchases. In 2025, Radian Guaranty distributed $795 million in dividends to Radian Group, giving us the liquidity to fund the Inigo acquisition from a position of strength.

In a broader context, from 2020 through 2025, we returned approximately $2.5 billion to stockholders through dividends and share repurchases, while maintaining a sound balance sheet, continuing to invest in the business. Our capital allocation philosophy has not changed, maintain financial strength, invest in growth, and return excess capital responsibly. We believe our ability to generate and redeploy capital with discipline through cycles is one of Radian's most important competitive advantages.

Building on this momentum, earlier this month, we reported our first quarter as a global multiline specialty insurer. I'm pleased to report that we're off to a strong start, with total revenues increasing 58% year-over-year to $466 million. Our mortgage insurance business saw new insurance written grow 42% year-over-year, while our specialty segment delivered $162 million in gross premiums written with only 2 months of Inigo's results reflected in our first quarter earnings. These results reflect the power of our strategy.

Looking ahead, we're focused on 3 clear priorities: delivering strong, consistent performance in our mortgage insurance franchise to help continue to advance the mission of affordable, sustainable and responsible homeownership, successfully integrating Inigo and advancing our transformation into a global specialty insurer and maintaining disciplined capital allocation, deploying capital where it earns attractive risk-adjusted returns, preserving financial strength and returning excess capital to stockholders over time.

I also want to recognize the people who make this all possible. Our teams across the U.S. and in England have shown exceptional commitment and agility through a truly transformative period as we sharpen our focus on our core strengths and grow globally, that includes the focused and important work underway to wind down our mortgage conduit business and complete the planned divestitures of our title and real estate services businesses. I am thankful for the dedication and professionalism of our teams. Our culture, grounded in accountability, collaboration and belonging will remain a critical differentiator as we move forward.

Earlier this year, we announced the addition of Seraina to our Board of Directors. Seraina brings more than 35 years of global insurance experience and a passion for leveraging emerging technologies. She is a wonderful addition to our already strong board.

Finally, before I close my comments, I want to recognize Greg Serio on his retirement from our Board after 14 years of service. On behalf of our entire team at Radian, we thank him for his commitment and dedication.

Nearly 50 years ago, Radian was founded with a clear sense of purpose, and that purpose has not changed. Today, we are building on that proud legacy to create something even greater, a global multiline specialty insurer with talent, capital and strategic vision to compete and win for decades to come. To all of you, thank you for your continued confidence and support. We are energized by what is ahead, and we are committed to successfully executing our strategy. Thank you.

Thank you, Rick. Now we will respond to questions that may have been submitted by stockholders during the meeting. If you are a stockholder of record and wish to ask a question, you may click on the message to submit your questions. If you've asked a question that was not answered during the meeting, we will follow up with you separately after the meeting.

I'll turn it back over to Rick now.

Okay. At this time, there are no questions, Howard. So I think we can...

Thank you, Rick. There being no further business to come before this meeting, the meeting is adjourned. I would like to express my appreciation to the stockholders who attended the meeting as well as those who submitted their proxies but were not able to attend.

This concludes the meeting. You may now disconnect.

Good day, and thank you for standing by. Welcome to the First Quarter 2026 Radian Group Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bob Lally, VP of Finance. Please go ahead.

Thank you, and welcome to Radian's First Quarter 2026 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website at radian.com. This press release includes certain non-GAAP measures that may be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity. A complete description of all our non-GAAP measures may be found in press release Exhibit F and reconciliations of these measures to the most comparable GAAP measures may be found in press release Exhibit G.

These exhibits are on the Investors section of our website. Today, you will hear from Rick Thornberry, Radian's Chief Executive Officer; and Dan Kobell, Senior Executive Vice President and Interim Chief Financial Officer. Before we begin, I would like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For more information regarding these risks and uncertainties as well as certain additional risks that Radian faces, you should refer to the risk factors included in our 2025 Form 10-K as well as subsequent reports filed with the SEC. These are also available on our website. Now I'd like to turn the call over to Rick.

Thank you for joining us today. This quarter marks an important and defining moment for Radian, our first as a global multiline specialty insurer. We believe this is the beginning of a new and exciting journey. I'm happy to report we are off to a strong start. In the first quarter, our Mortgage Insurance business continued to deliver strong operating performance. We resumed our opportunistic share repurchases, reflecting our continued commitment to disciplined capital management. And importantly, in early February, we successfully completed the closing of the Inigo acquisition, a highly strategic and complementary specialty insurance business, thereby bringing together 2 world-class teams focused on building Radian into the future as a more diversified insurance enterprise.

With the addition of Inigo, we now operate across 2 complementary noncorrelated insurance businesses, each with its own earnings and distinct risk and return dynamics. We believe this structure expands our growth opportunities and enhances our ability to deploy capital through an attractive risk-adjusted returns. Our financial performance this quarter reflects the first in which the earnings from both our Mortgage Insurance business and our newly acquired Specialty Insurance business, Inigo, are combined. It's important to note that the Inigo's financial results represent only the 2 months since the early February closing rather than the full quarter.

The performance of our Mortgage Insurance business from an earnings and capital generation perspective was consistent with the fundamentals that we have discussed in the past. Our high-quality Mortgage Insurance portfolio continues to demonstrate strong credit performance with significant embedded value. We continue to leverage our proprietary data and analytics and disciplined underwriting processes to add new business with attractive economic value, and we remain focused on improving the efficiency and effectiveness of our operational processes to enhance service and reduce costs, all of which we believe supports the important financial and strategic foundation that our Mortgage Insurance business provides today and into the future.

In terms of Inigo's results, as mentioned earlier, with the closing completed in early February, only 2 months of Inigo's results are included in this quarter. Even with only a partial quarter of ownership, Inigo contributed meaningfully to our results, reinforcing the benefits of operating with 2 distinct and complementary insurance segments. We are pleased that Inigo's performance this quarter is consistent with our expectations and reinforces the strategic and financial merits of the combination.

Coincidentally, today marks 1 year since Richard Watson and I, together with leaders from both organizations, first met. From that first discussion, the alignment from a strategic and financial perspective as well as the risk management approach and the cultural fit was clear. After our comprehensive due diligence confirmed that Inigo was the ideal strategic partner to help shape Radian's future, we moved quickly and decisively to complete the transaction in a timely and efficient manner. The execution of this deal underscores our ability to identify and capitalize on compelling opportunities to further strengthen our offering in a rapidly evolving market.

As a reminder, Inigo is a specialty insurance carrier that has a strong track record of profitable underwriting growth through the Lloyd's market across global specialty insurance and reinsurance products. As I've noted previously, the Inigo team operates as a stand-alone business within Radian retaining their strategic focus and culture. In today's dynamic and ever-changing market, Inigo differentiates itself through a strong culture and disciplined underwriting, leveraging data and analytics to drive prudent risk selection, a strong track record of profitability and value-driven growth. We believe the combination of Inigo's strategic approach with a highly experienced team, along with the ability to dynamically allocate capital to the highest value product lines positions our Specialty Insurance business to perform well through market cycles.

I am personally excited to bring these 2 companies together this quarter for what I believe represents the beginning of a new and exciting chapter for Radian. The strategic logic is straightforward. Mortgage Insurance provides a strong foundation that we expect will continue to generate consistent earnings, strong cash and capital generation and significant embedded economic value. Specialty Insurance adds access to a large and growing global market with different cycles and drivers that we expect will enhance diversification and resilience at the enterprise level. Together, these businesses create a more balanced and diversified earnings and capital profile, which we believe positions us to grow value more consistently through market cycles. This strategy is anchored in capabilities we have already proven, including underwriting discipline, data and analytics, customer engagement and capital management and extends those strengths across a broader set of growth opportunities.

From a Radian Group perspective, our role is to manage capital thoughtfully across both businesses, supporting growth where returns are compelling while maintaining discipline across the enterprise. From a capital perspective, our priorities remain unchanged. We expect to continue to maintain strong financial and liquidity positions, support organic growth in both businesses, deploy capital to achieve attractive risk-adjusted returns and return excess capital to stockholders thoughtfully and strategically.

As I noted, consistent with our disciplined capital management framework, we resumed our opportunistic share repurchases during the first quarter. Importantly, doing so demonstrates the strength of our balance sheet and continued capital generation even after completing a $1.7 billion acquisition of Inigo earlier this first quarter. The resumption of share repurchases reflect our conviction in the combined companies earnings power, capital flexibility and long-term value creation.

Before turning the call over to Dan, I want to emphasize one final point. This quarter is not about declaring victory. It's about establishing momentum. We believe the combination of a proven mortgage insurance foundation and a disciplined specialty insurance carrier and 2 highly experienced and talented teams positions Radian for a more resilient, more flexible and more valuable future. We are excited about the road ahead, confident in our strategy and focus on execution. With that, I will turn the call over to Dan to walk through the financial results in more detail.

Thank you, Rick. I'd like to begin by highlighting an important change in the way we manage and report our insurance businesses. Following the Inigo acquisition and the continued growth and diversification of Radian Group, we refined our segment reporting to better reflect the way we organize our business and assess performance. Going forward, our operations will be reported across 2 distinct insurance segments: Mortgage and Specialty. We believe this enhanced transparency will provide a clear view of the underlying performance and key drivers for each business.

In addition, we will report a corporate category that includes items not attributable to either of the 2 segments, such as holding company investment income, interest expense and certain corporate costs. These corporate expenses were previously reflected in our Mortgage segment and all periods have been restated to reflect the new reporting framework. With that context in mind, I'm pleased to provide additional details about our first quarter results which include 2 months of performance for Inigo.

On a GAAP basis, we generated net income from continuing operations of $129 million or $0.93 per share, with a return on equity of 10.8%. While the GAAP results include the impact of certain onetime costs related to the Inigo transaction as well as noncash amortization and purchase accounting adjustments, our adjusted operating results clearly reflect the immediate financial benefits of the acquisition. Adjusted net operating earnings per share grew to $1.27, a 22% increase from a year ago. Adjusted net operating return on equity grew to 14.7% this quarter, an increase of over 130 basis points from a year ago. We grew book value per share 10% year-over-year to $35.67. We also returned dividends to our stockholders over the past year that accounted for an additional 3% of book value.

On a consolidated basis, our total revenues grew 58% year-over-year to $466 million, reflecting continued growth in Mortgage segment revenue as well as the contribution from our new Specialty segment. Our net premiums earned are now diversified across our 2 insurance segments with our Specialty segment accounting for 41% of first quarter net earned premiums. Our total investment portfolio of $7.1 billion consists of well diversified and highly rated securities. At an enterprise level, we generated $70 million of net investment income this quarter, an increase of 14% from a year ago, driven by higher investment balances. Our investment portfolio has continued to be an important contributor to our earnings and the addition of Inigo's investment portfolio reinforces the strength.

Turning now to the key drivers of our segment results, beginning with our Mortgage segment. Our large, high-quality Mortgage Insurance in-force portfolio grew 3% year-over-year to $282 billion. New insurance written was $13.5 billion in the quarter, an increase of 42% year-over-year. Persistency remained strong in the quarter at 81.3%. As of the end of the first quarter, approximately half of our insurance in-force portfolio had a mortgage rate of 5.5% or lower. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term. Both our in-force and net premium yields were unchanged this quarter as we continue to generate consistent premiums from our valuable Mortgage Insurance portfolio.

Our mortgage provision for losses and related credit trends continue to be positive with strong cure activity. We reported approximately 13,600 new defaults in the quarter, a decline of 4% from the prior quarter. Cures increased this quarter to approximately 13,700, exceeding the number of new defaults and reducing our portfolio default rate to 2.51%.

Following the quarter, favorable trends continued into April, where cures again exceeded new defaults and our default rate declined further. Our cure trends have been consistently positive, meaningfully exceeding our initial default to claim expectations for these loans. Favorable development from prior period defaults was $36 million for our Mortgage segment, similar to recent quarters. Mortgage segment operating expenses were $41 million, a decline of 6% year-over-year. Our Mortgage segment expense ratio was 20%, down from 21% a year ago.

Now turning to our Specialty segment, which reflects only 2 months of performance for Inigo. Net premiums earned in our Specialty segment were $164 million, which are diversified across a range of attractive lines of business spanning both insurance and reinsurance. Within our Specialty segment, we specifically target business lines with attractive margin and where we can leverage proprietary data and advanced analytics to gain an underwriting advantage. Total loss provision within the Specialty segment was $86 million, which included $13 million of favorable net development for prior period reserves. While the current environment is more competitive, particularly in property insurance and reinsurance lines, underwriting profitability remains strong with a low level of natural catastrophe losses in the quarter.

Our Specialty segment reported a net expense ratio of 33% and a net combined ratio of 85%. As Rick noted, these results are consistent with our expectations. Inigo has demonstrated a commitment to prudent underwriting and achieved profitability during a period of significant growth. While we expect variability in our Specialty segment combined ratio over time, we intend to continue to prioritize profitability over volume and remain committed to disciplined, profitable growth. Additional details regarding our segments are available in press release Exhibit E.

Moving to our capital, available liquidity and related strategic actions. Radian Guaranty's financial position remains strong. In the first quarter, Radian Guaranty paid a $140 million dividend to Radian Group. Our PMIERs cushion was unchanged at $1.6 billion, significantly above the required PMIERs capital level. During the first quarter, our holding company received $46 million of capital from our entities that are currently held for sale. These returns of capital provided immediate liquidity to Radian Group and reduced the carrying value of these entities to $61 million as of quarter end.

Since the announcement of the planned divestitures in September of last year, we have returned $108 million of capital to our holding company from the entities held for sale, representing over 60% of their carrying value as of the end of the third quarter of last year. With regard to the divestitures themselves, we continue to make steady progress and expect this process to be completed by the end of the third quarter of this year.

In the first quarter, we repurchased $50 million of our common stock or 1.5 million shares. In April, we purchased an additional $65 million of our shares, bringing total repurchase so far this year to $115 million or 3.3 million shares. We were pleased to resume opportunistic share repurchases and continue to believe that share repurchase provides an efficient and accretive way to return excess capital to stockholders, particularly as the shares trade significantly below our view of their intrinsic value.

During the first quarter, Radian Group also paid a quarterly dividend to stockholders totaling $35 million. As we noted last quarter, we drew $200 million on our revolving credit facility before the Inigo closing. During the quarter, we repaid $50 million, leaving $150 million outstanding at quarter end. We continue to expect to repay this borrowing in full during 2026. Our holding company liquidity at quarter end was $391 million. We expect dividends of at least $600 million from Radian Guaranty to Radian Group during 2026, including the $140 million dividend paid in the first quarter.

Finally, our holding company leverage ratio was 20.2% at quarter end and we expect it to be below 20% by year-end 2026. I will now turn the call back over to Rick.

Thank you, Dan. Before we take your questions, I would like to invite you to attend our first Investor Day as a global multiline insurer on June 4 in New York City. We look forward to providing more detail on our strategy, capital management framework and the opportunity created by operating across 2 complementary insurance businesses. I also want to thank our incredible team for their dedication and commitment as we execute this exciting and transformational plan. Operator, we would be happy to take questions.

[Operator Instructions]

And our first question comes from Bose George of KBW.

This is Graham, on for Bose. Congratulations on closing Inigo, first of all. But in Exhibit E, you show roughly $40 million of pretax income from Inigo. And then the January breakout, is another $14 million. Is that a good run rate, like roughly $55 million? Or is there some seasonality or additional expenses that we need to think about?

Yes. Thanks, Graham, for the question. So as you noted, we did provide some additional guidance. The quarterly results really just reflects the 2 months, February and March since the acquisition. So we provided the month of January in our press release as well for Inigo, just to give you a more complete quarter to help establish a baseline for some of the key items on the Specialty segment P&L.

As I noted earlier, we don't provide guidance on items like combined ratio, premium growth. Those are subject to outside factors, competitive pricing environment as well as loss experience, which is difficult to predict. There is some seasonality, as you alluded to in the business, both in terms of premiums and losses tend to see those recognized in line with where you'd expect the risk to take place during the year. But they'll generally move together. So on a net basis, not as much of an impact on the bottom line.

I'll just reiterate that as far as fourth quarter results, we're pleased with what we saw. It was in line with our expectations for the quarter. No surprises on either the top line or the bottom line. We're already seeing the financial benefits of the transaction play through in terms of the increase in earnings, 22% increase in operating earnings year-over-year. 130 basis points increase in return on equity. As far as full year guidance, again, I can't provide anything more for you, but I will say our Investor Day that we're going to have in about 4 weeks is a great opportunity to hear more from the Inigo team as far as their business and what they expect to see over the balance of 2026 and beyond.

Yes. And I would just reemphasize what you said, Dan, which is consistent with our expectations and from a quarterly performance point of view, so we look forward to continue to report as we go. And by the way, thank you for the congratulations. We appreciate that.

Thanks, Graham.

And our next question comes from Mihir Bhatia of Bank of America.

I wanted to start with the capital allocation outlook. Just how are you planning to balance share buybacks with debt paydown? And just remind us, any change to your debt-to-capital targets. I heard you on the 20%, but just longer term, any change? Where do you want to get that debt to capital ratio down to just given your adding specialty and potentially some volatility there?

Yes. So Mihir, thanks for the question. I'll start with the last point that you mentioned. As far as the debt-to-capital ratio, no change in our expectation there. We've noted we expect to repay the short-term draw on our credit facility during 2026, and that would take us back to the high teens from a leverage ratio perspective and certainly comfortable operating in that position. .

As far as capital management more broadly, I think I'll just start by talking about our holding company liquidity. So I noted last quarter, following the transaction closing, we had approximately $350 million of liquidity. From that point forward to the end of the first quarter, we paid down $50 million of the credit facility. We repurchased $50 million of shares and paid a $35 million dividend. And net of all that activity, our holding company liquidity still grew by approximately $40 million through the end of the quarter. We ended at $391 million.

So we were able to execute on all of those capital management priorities as far as programmatic capital return with the dividend, opportunistic capital return on share repurchase, reducing our leverage and then bolstering our holding company liquidity during the quarter. As we look forward for the balance of the year, I'd expect us to continue to execute on those priorities. As noted in the past, we have -- we expect approximately $600 million of dividends up from Radian Guaranty during 2026. When you kind of factor in all the items that we've spoken to as far as the credit facility, the shareholder dividend and then bolstering liquidity, I'd give you a range of between $200 million to $250 million that we would expect on a full year basis would be excess capital that would become potentially available for opportunistic repurchase.

And just a reminder, that is a full year number. So we've done -- through the first 4 months of the year, we've done $115 million, so effectively used half of that capacity. So that hopefully gives you a good sense of kind of what to expect for the balance of the year.

Yes. I would just -- I would add I was just going to add to the comments here just for a second. Just we've got a track record over the last 8.5 years that I think kind of speaks for itself, where we returned about $2.3 billion through share repurchases and over $3 billion, including dividends. So as Dan walked through in his remarks, following the closing of Inigo, we start to generate excess capital, which we've given kind of guidance as to that capital flowing back up to Radian Group.

And I think we saw an opportunity and given the financial strength of our business, the transparency of that capital flow from our MI business up the group and just the combination of the Specialty Insurance business during the quarter, we just -- our confidence in our ability to start to reenter the market from an opportunistic share repurchase just became an opportunity given where we saw the shares trading relative to how we view intrinsic value.

So I think just kind of going forward, we feel very strongly about the value of our company and the intrinsic value. And I think it's important to note that what we saw just in the first -- we just saw the first 2 months -- 2 months of the quarter for Inigo, and you can kind of see the strategic transformation starting to take shape in the combination of the 2 businesses from a financial profile point of view. So that all combined gives us kind of confidence as we go into the remainder of the year. And I think Dan walked through the numbers perfectly. So thank you.

Just on this topic, sorry. The one thing that I didn't hear you addressed was the $450 million, I think you have a senior note due next March. Just any comments on thoughts on that one?

Yes. So we do have a maturity, as you noted, coming up in March of 2027. Current expectation would be that we would refinance that. Again, we're comfortable with the leverage ratio where we are and kind of the high teens when you factor in the expected paydown of the credit facility. So that is our current expectation of how we would handle that maturity either later this year or early next year, kind of a refinance there.

Okay. And then just on the MI business, the claims severity has been increasing quite a bit. Just any comments on just the driver and where you expect that to settle out?

Yes. So on claim severity, we have seen that trend higher over the last several years and several quarters. I think what you see there is a couple of factors. One, you see more new loans that are kind of working their way into the default inventory and working their way to claim and those newer loans just have higher loan balances, higher risk in force on a per policy basis. You also see a little bit of a change in mix of -- in terms of the claims that are being paid and the mitigation benefits based on home price appreciation. Some of that has started to fluctuate and kind of decline a little bit over time, still very favorable to what we would expect. Typical severity pre-Covid was kind of 100% or above, and we're kind of in the 80% range. So still see that favorable to our expectations. Just a little bit of a fluctuation for those 2 factors that I mentioned.

Yes. And then just my last question, and I'll jump back in queue. Just -- obviously on the Specialty Insurance side. So I think a lot of us are still learning it, but we've heard a lot about softening of the pricing environment. Can you just talk about what -- where you're seeing the most pressure and how you're adjusting underwriting risk returns and where you're doing, maybe just allocating capital there?

Yes. Thank you for the question. I think a key point of this business is all about managing kind of through the cycle, both softening markets and hardening markets. So I think we've certainly seen -- and we expected it through our M&A due diligence kind of the markets to soften. And as we come into 2026, that expectation has been consistent -- or at least the softening market has been consistent with our expectation.

So I think as we go through and as we did our due diligence, we spent a great deal of time with the team kind of walking through their approach and process for that and really were impressed by not only their track records kind of going through multiple cycles, but just their whole philosophy and discipline about how they think about growth, value creation and profitability. So cycle management is a fundamental skill in this business and financial discipline is critically important.

So we -- I think it's important to note, too, that as you hear general comments about softening of market, there are still opportunities that can be identified, but it's also important to remember that pricing is coming off fairly high levels after the last 5 years. And so we see rate adequacy is still very good in many areas even with the pullback in pricing. But our focus is on managing the cycle well by remaining disciplined, by remaining agile and flexible, continuing to look for relative value and leveraging the data and analytics that we have, not to mention our strong customer relationship.

So I think with our priority being profitability, as opposed to any particular revenue growth target, we see the team working with that discipline. And I think there are similarities to how we think and talk about our MI business, where we leverage data and analytics, strong underwriting with a focus on profitability and economic value to really identify the opportunities to allocate capital to and construct our portfolio accordingly.

The interesting thing and the nice thing about the Specialty business is that there is product diversification across the business, which gives you a greater opportunity and a broader lens to kind of identify those opportunities and allocate capital where we see the highest risk-adjusted return. So given the experience of the team and working with them closely over the past several months, we're very confident in the team's ability to find value in this market and really to kind of navigate through the market cycle.

So I think again, going back to the earlier comment, the trends we've seen and the performance we've seen have been consistent with our expectations and kind of consistent with what we've learned and seen by working with the team over the last 12 months.

I'm showing no further questions at this time. I'd like to turn it back to Rick Thornberry for closing remarks.

Well, we thank you for your interest in Radian, and appreciate the questions. Most importantly, we look forward to hosting many of you at our upcoming Investor Day next month on June 4 and look forward to seeing as many of you as can join us for that event. And other than that, we appreciate the support, and look forward to talking to you in the future. Take care.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2025 Radian Group Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, [ Bob Lally, ] VP Finance. Please go ahead.

Thank you, and welcome to Radian's Fourth Quarter 2025 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website at radian.com.

This press release includes certain non-GAAP measures that may be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity. A complete description of all our non-GAAP measures may be found in press release Exhibit F and reconciliations of these measures to the most comparable GAAP measures may be found in press release Exhibit G. These exhibits are on the Investors section of our website.

Today, you will hear from Rick Thornberry, Radian's Chief Executive Officer; and Dan Kobell, Senior Executive Vice President and Interim Chief Financial Officer.

Before we begin, I'd like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For more information regarding these risks and uncertainties as well as certain additional risks that Radian faces, you should refer to the risk factors included in our 2024 Form 10-K and our third quarter 2025 Form 10-Q as well as the subsequent reports filed with the SEC.

Now I would like to turn the call over to Rick.

Good morning, and thank you for joining us. I am pleased to report another strong quarter for Radian, rounding out an outstanding year, both in terms of our financial performance, and the beginning of an exciting strategic transformation of our company with the acquisition of Inigo.

Our performance in 2025 demonstrates the strength of our core business and the disciplined execution of our strategy. We grew our mortgage insurance in force portfolio to an all-time high. We maintain strong credit performance and operational discipline. We continue to generate substantial capital, distributing $795 million from Radian Guaranty to our holding company and returned $576 million to stockholders through dividends and share repurchases. And we used risk distribution strategies to effectively manage our capital and proactively mitigate growth.

Most notably, earlier this month, we completed our strategic acquisition of Inigo, a highly respected specialty insurer underwriting through Lloyd's of London. Importantly, we funded this transaction entirely with available liquidity and excess capital with no new equity raise. This marks the defining milestone in Radian's history and the beginning of an exciting new chapter. We believe this is truly transformative for Radian's future. Building on a strong foundation as a leading U.S. mortgage insurer, we are now poised to expand and diversify into a global multiline specialty insurer.

We have the unique opportunity to leverage our high-performing mortgage insurance business which is expected to continue generating excess capital alongside a growing and global specialty insurance business. The acquisition significantly expands our expertise, capabilities and geographic reach, greatly increasing our total addressable market and position us to deploy capital strategically for attractive returns. We expect this transaction to double our annual revenues, be accretive to EPS and returns and provide greater strategic flexibility to deploy capital across multiple insurance lines through various business cycles.

Inigo has a proven track record in the Lloyd's market, fueled by a high-performing culture and an experienced team with a strong focus on their customers. Their business model and the approach align closely with our mortgage insurance business, particularly in their commitment to strong risk management through disciplined underwriting, leveraging data and analytics and disciplined capital allocation. As part of Radian, Inigo will operate as a stand-alone business unit in London, maintaining its management team, brand and culture. We are excited to welcome Inigo's CEO, [ Richard Watson, ] and his talented team to Radian and look forward to working together to build long-term and sustainable value for all our stakeholders as a global multiline specialty insurer.

I also want to share that our divestiture plan for our mortgage conduit, title and real estate services businesses is well underway and on track for completion by the third quarter of this year. I am very proud of these teams as they have effectively managed their businesses while working through this process.

Last week, we announced an important organizational update. These changes are intended to align our leadership team with our strategic focus, continuing to deliver strong operating performance in our mortgage insurance business, realizing the strategic value of the Inigo acquisition and maintaining strong financial management, including effective capital allocation. We promoted Steve Kelleher and Megan Bartholomew, both long-tenured radiant leaders who are well known to the market to co-head our mortgage insurance business. We also promoted Dan Kobell and Rob Quigley to highly experienced and accomplished financial executives with extensive financial management expertise. These appointments and the exceptional teams behind them, along with the addition of the highly talented Inigo team, position us well for the future with a strong and deep pool of talent. I am truly excited to see what this team can achieve together.

Before I turn the call over to Dan, I would like to take a moment to formally introduce him. Many of you have worked with Dan during his tenure at Radian, most recently as EVP of Finance, heading corporate planning, corporate development, treasury, Investments and Investor Relations. During his 11 years at Radian, he has been a leader across our finance team and his deep expertise in financial management and strong understanding of our business have been invaluable. Most recently, he was a key leader in the work done to identify and complete the Inigo acquisition. His experience and knowledge of Radian and now Inigo position them well for this important role.

Now I would like to turn the call over to Dan to review our financial results.

Thank you, Rick, for the warm welcome. I'm honored to step into this role and lead the finance function at Radian in close partnership with Rob Quigley. This is an exciting chapter in Radian's nearly 50-year history, and I look forward to engaging with all of you as we move forward together. I'm pleased to report additional details about our fourth quarter results, which reflect another quarter of strong performance.

For the quarter, we generated net income from continuing operations of $159 million or $1.15 per share. For the full year, net income from continuing operations was $618 million, or $4.39 per share. We were pleased to grow our net income from continuing operations per share in 2025 driven by a combination of strong earnings as well as an 8% reduction in our share count.

Additionally, in our mortgage insurance business, we saw growth in both insurance in force and new insurance written, with NIW growing 6% year-over-year. We generated a return on equity of 13.5% in the fourth quarter and 13.1% for the full year. We grew book value per share 13% year-over-year to $35.29. We also returned dividends to our stockholders in 2025 that accounted for an additional 3% of book value.

Turning now to the key drivers of our results. Our total revenues continued to be strong at $301 million in the fourth quarter and $1.2 billion for the full year. Slides 14 through 16 in our presentation include details on our mortgage insurance portfolio as well as other key factors impacting our net premiums earned.

We generated $237 million in net premiums earned in the quarter, which represents the highest level in over 3 years. Our large, high-quality primary mortgage insurance portfolio grew 3% year-over-year to another all-time high of $283 billion. Contributing to this growth was $55 billion of NIW in 2025, including $15.9 billion in the fourth quarter. These figures compare favorably to $52 billion in 2024 and $13.2 billion in the fourth quarter of the prior year.

Our proprietary mortgage data and analytics, which drive our MI pricing strategy, together with our disciplined and informed approach to risk management have contributed to a healthy and profitable portfolio. creating long-term economic value and generating strong returns for our shareholders.

As shown on Slide 14, our quarterly persistency rate remained strong at 82% in the fourth quarter, a small decrease from the prior quarter due to higher refinance activity. As of the end of the fourth quarter, approximately half of our insurance in force portfolio had a mortgage rate of 5.5% or lower. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term and we, therefore, continue to expect our persistency rate to remain strong.

As shown on Slide 16, the in-force premium yield for our mortgage insurance portfolio remained stable as expected, at 38 basis points. With strong persistency rates and the current industry pricing environment, we expect the in-force premium yield to remain generally stable in 2026.

As shown on Slide 17, our investment portfolio of $6.1 billion consists of well diversified and highly rated securities, generating net investment income of $249 million in 2025.

Our provision for losses and related credit trends continue to be positive with strong [ cure ] activity. On Slide 20, we provide trends for our primary default inventory. The number of new defaults in the fourth quarter was approximately 14,200, and as expected, the total number of defaults increased in the fourth quarter to approximately 25,000 loans at quarter end, resulting in a portfolio default rate of 2.56%. This increase in total defaults reflects normal seasonal trends and the expected continued seasoning of our large insurance in-force portfolio. As we have noted in the past, our new defaults continue to contain significant embedded equity which has been a key driver of recent favorable credit trends, including higher cure rates and reduced severity for policies that result in claims submission.

As shown on Slide 21, our cure trends have been consistently positive in recent periods, meaningfully exceeding our initial default-to-claim expectations for these loans. Cure rates in the fourth quarter exhibited typical seasonal trends, in line with similar periods from prior years.

Slide 22 shows the components of our provision for loss. We maintained our initial default-to-claim rate of 7.5% on new defaults, which resulted in $57 million of loss provision for new defaults in the fourth quarter. Throughout 2025, our provision for losses benefited from favorable reserve development on prior period defaults primarily due to more favorable cure trends than initially estimated. This continued in the fourth quarter with $35 million of positive reserve development. As a result, we recognized a net provision expense of $22 million in the fourth quarter.

Now turning to our other expenses. For the fourth quarter, our other operating expenses were $56 million, down from $62 million in the third quarter. For the year, our other operating expenses were $246 million, below our previously communicated annual expense guidance of $250 million for continuing operations. With the Inigo acquisition and following the planned divestiture of our mortgage conduit, title and real estate services businesses, we will continue to look for opportunities to enhance our efficiency as we simplify our business model to focus on mortgage and specialty insurance.

Moving to our capital, available liquidity and related strategic actions. Radian Guaranty's financial position remains strong. In 2025, Radian Guaranty distributed $795 million to Radian Group through dividends and returns of capital. We also continue to diversify our sources of capital and use a range of risk distribution strategies to effectively manage capital and proactively mitigate risk. During the fourth quarter, we completed an excess of loss reinsurance agreement covering approximately $373 million on certain policies written from 2016 through 2021. Our PMIER's cushion was $1.6 billion at year-end, significantly above our required PMIER's capital level. This capital buffer combined with our current reinsurance programs, positions Radian Guaranty well to withstand and remain well capitalized through a severe potential macroeconomic stress.

Moving to our discontinued operations. During the fourth quarter, we extracted $62 million of capital from our entities held for sale. These returns of capital provided immediate liquidity to Radian Group and reduced the net carrying value of these businesses to $110 million as of year-end. As we've mentioned in the past, we have engaged Citizens JMP and Piper Sandler to assist us in the divestiture process. We are making steady progress and continue to expect this process to be completed by the end of the third quarter of this year.

Moving to our holding company, Radian Group. In 2025, we repurchased approximately 13.5 million shares of our common stock at a total cost of $430 million. In preparation for the Inigo acquisition, which closed earlier this month, we significantly expanded our holding company liquidity to $1.8 billion at year-end, supported by a $195 million dividend in the fourth quarter and a $600 million intercompany note both from Radian Guaranty. In January, we drew $200 million on our revolving credit facility, further increasing holding company liquidity.

With these resources, we funded the Inigo acquisition with a purchase price paid at closing, net of certain adjustments of $1.67 billion. Inigo's estimated tangible equity at year-end was $1.16 billion, resulting in a net purchase price multiple of approximately 1.4x tangible equity. Following the Inigo purchase, our holding company liquidity was approximately $350 million.

In 2026, we expect dividends of at least $600 million from Radian Guaranty to Radian Group including a $140 million dividend later in the first quarter. We expect these dividends to allow Radian Group to repay the $200 million draw from the credit facility during 2026, while continuing to maintain sufficient liquidity. As the year progresses, we expect to continue to build our liquidity position at Radian Group and we will apply our disciplined capital allocation methodology to optimize the use of any excess capital, including potentially resuming share repurchases under our available share repurchase authorization. Finally, our leverage ratio declined to 18.3% at year-end, and we expect it to remain below 20% by year-end 2026.

I will now turn the call back over to Rick.

Thank you, Dan. Our results for the quarter and the year once again reflect the balance and agility of our company as well as the strength and flexibility of our capital and liquidity positions. Our mortgage insurance business remains a cornerstone of our success and of our commitment to supporting homeownership.

We appreciate the focus of the administration, FHFA and GSEs on making homeownership more affordable and sustainable. Our products enable qualified borrowers to access homeownership and began building equity years earlier than if they had to save for a large down payment. For nearly 50 years, we have helped millions of families purchase their homes or refinance their mortgages. We are proud to play this important role in the housing finance system and in building strong communities.

Finally, I want to express my gratitude to all Radian employees across every part of our company for their dedication and outstanding work throughout this pivotal year. Their commitment to excellence and our values has been the foundation of our success.

Operator, we would be happy to take questions.

[Operator Instructions] And our first question comes from Terry Ma of Barclays.

Maybe just to start off with Inigo, question for Dan. Kind of like you guys just recently closed it, any kind of updated thoughts on financial metrics or anything you kind of laid out initially a few months ago?

Yes. Thanks, Terry, for the question. So I would say broadly, no changes from what we laid out a few months ago. And I would say just generally, the simplest way to look at the financial accretion from the Inigo acquisition, using round numbers, it's a $1.7 billion acquisition. The funds we used for that acquisition were part of our investment portfolio at Radian between Radian Group and Guaranty. And they're earning, call it, a 4% or 5% yield. So we've now taken that $1.7 billion and deployed it into an operating business that we expect is going to earn a mid-teens return through the cycle.

There's going to be some volatility. It's actually been higher of late. But if you say it's mid-teens through the cycle, that's call it, a 10% step-up in yield on $1.7 billion, so you get to $170 million of incremental net income. And that's really the source of the financial accretion that we had in the transaction. We didn't have expense synergies or revenue synergies that we were relying on. So really fairly straightforward taking Inigo as it exists and putting it into Radian.

So from an execution risk perspective, I'd characterize it as fairly low. We have some light integration to do in terms of financial systems and reporting to be able to report our results on a consolidated basis and some areas that we'll kind of look at that makes sense at an enterprise level to kind of think about it on a consolidated basis, but really no change to what we provided in terms of financial guidance and feel very confident that we'll be able to deliver on that.

Got it. That's helpful. And then maybe just turning to credit. You called out the strong cure trends on Slide 21 of your deck. 90% of defaults curing within 1 year. Like as we kind of look forward, how sticky, can that 90% be as you have some of the more recent vintages kind of start to season and peak, which I imagine have probably less embedded equity as some of the earlier vintages.

Yes. So that's a good question, Terry. And that's certainly something we'll continue to monitor. As you noted, the vintages, if you go back kind of better seasoning now had significant home price appreciation and embedded equity continue to see in our new defaults, very significant embedded equity is still what's coming through. So the more recent vintages, we're starting to see that play through now, certainly going to be mindful of that. But the cure activity that we've seen has been very strong. As a reminder, we assume effectively 92.5% cumulative cure rate in terms of our reserving assumptions. So we take a fairly conservative view there relative to what we've seen over the last several years.

It remains to be seen in terms of how those more recent vintages play out because we're just not seeing that enter the default inventory in a significant number yet. But we continue to see those cure trends play out very consistently, very favorable to what our original expectations were. And as far as credit trends overall, not really seeing any pockets of concern from a geography perspective across different credit segments or at a vintage level, everything is playing out in line with or better than our expectations.

And our next question comes from Mihir Bhatia of Bank of America.

On the pricing environment, can you just compare returns on new business today versus a year ago?

I can start with that one and then Rick can jump in for some color on pricing. So as far as our premium yield is probably the best way to look at it. Our yield on an in-force basis has been very consistent. It's been around 38 basis points now for really 3 years, it's a pretty good indication that what we're bringing into the portfolio and what's exiting, there's a pretty good balance from a pricing perspective. We're not really seeing that in-force yield move. And as I noted in my prepared remarks that we expect that to be the case for 2026 as well. So fair amount of stability there in terms of the blended rate of what's coming into the portfolio and what's leaving. I don't -- leave it to Rick from a pricing competition perspective.

First off, I'd just say we're very happy with the volume and the quality of what we saw in the fourth quarter and throughout 2025 from an economic value point of view. I would say industry pricing has been relatively stable, and it's a normal competitive environment. So nothing really noteworthy there. As we've stated, for us, we don't focus on market share, we focus on economic value and being disciplined and consistent in our approach. And we continue to see really attractive opportunities to leverage our data and analytics to source NIW that has attractive economic value and risk-adjusted returns, so -- which we believe gives us the opportunity to construct a really high-value portfolio, as Dan mentioned in his earlier comments.

I think we use that -- those analytics this year to grow our insurance in force and find value to grow that portfolio to an all-time high to $283 billion. And I think we would expect fluctuations quarter-to-quarter, but I think we've been relatively consistent over time because we focus on really trying to find the most attractive EV segments of the market.

One thing I would just highlight because I think it's important to note that maybe compared to other MI companies that maybe are more heavily weighted to bid card structures, that we deem to be low-value structures and can effectively limit the ability for us to leverage our proprietary data and analytics platforms to select risk where we see economic value. For us, Today, over 80% of our current NIW is being sourced through our proprietary RADAR Rates platform, which is our black box pricing. And it really plays to our strength, where we're able to leverage our analytics to price and select the loans, we believe have the highest economic value based on loan and borrower attributes based on our long-term view of geographic trends and differences across the industry.

So I believe the combination -- as we've looked at this market the past year, we've seen very attractive opportunities from an economic value point of view. The combination of our industry-leading data and analytics and our view of customer from a quality of origination and servicing perspective, combined with our unwavering commitment to underwriting, I think really provides us with an advantage in terms of long-term portfolio construction. So -- we like this market. I think our team has done a really good job of leveraging our tools to find value in the marketplace, working closely with our customers.

Okay. Awesome. And then maybe just a quick 1 on Inigo. Is the mid- to high 80% combined ratio, a good run rate to think about for that business?

Yes. So we haven't provided any kind of forward guidance from an Inigo perspective. I think as we report our results starting with the first quarter on a combined basis, we'll have all the key drivers for both Inigo and our MI business and probably a segment reporting structure. We'll be able to provide more detail at that time. So nothing forward. I think the combined ratio range that you referenced, I think, is kind of where they've been certainly over kind of their 5 years of operation. So I understand if you want to kind of think about that as a good trend to use. But we'll provide updated guidance as we move forward.

And our next question comes from Bose George of KBW.

Actually I just wanted to first follow up on the question on the accretion. The $170 million is -- I think it's a pretax number, but can you just confirm that?

Yes. The way that I would explain that, Bose, I think of that as a pretax number.

Okay. great -- sorry, go ahead.

I was going to say, I think if you take that $170 million and you apply that to our equity base, using, call it, a 25% statutory tax rate in the U.K. for Inigo, you get to north of 200 basis points of ROE accretion. So I think that's the right math to use.

Okay. Perfect. And then in terms of the premium to book value, is there going to be intangibles that need to be amortized? Do you know the split yet between goodwill and intangibles?

Yes. So there will be intangibles and some of them will most likely be amortizing. We are in the process of doing all the purchase accounting related to the transaction, so that we don't have those numbers available and complete yet. But as I mentioned earlier, when we report our results for the first quarter, we will certainly have that and be able to kind of specify what the intangibles are and kind of what the amortization periods are going to look like for those.

Okay. Great. And then just 1 on the buybacks. You mentioned that we could see a resumption in back half of the year. So if you look out to 2027, could we see buybacks back at the pre-Inigo levels by next year?

I think given our -- by the way, Bose, thank you for the question. I think given kind of our strategic path forward with MI our business, Inigo combination and the divestiture process underway and the attractive financial metrics that we expect from the Inigo acquisition, I would just state that we think our shares are undervalued. Probably not the first time you've ever heard a public company CEO say that, but I think that's the position we take today.

And given the strength of our financial position heading into 2026, Dan walked through some of that in terms of the -- our current capital position and the transparency of future capital availability, we would expect to resume opportunistic share repurchases. And I think that's all based on the visibility of our MI business's embedded earnings from our insurance in force portfolio and the visibility of the capital return we have from Radian Guaranty to group. And truthfully, the we believe the combination with Inigo makes the value of our shares even more attractive.

So we look forward to demonstrating the value of the strategic transformation as we go forward to all of our stakeholders. But I think we see value in our shares.

I'm showing no further questions at this time. I'd like to turn it back to Rick Thornberry for closing remarks.

Thank you for joining us and for your interest in Radian. We look forward to reporting on our first combined results with Inigo next quarter, kind of exciting. And demonstrating how our transformation into a global multiline specialty insurer can create additional value for our customers, partners and stockholders. And we're excited to speak with many of you in the coming months and share more of our story as it continues to unfold. And again, look forward to that first quarter reporting cycle. So thank you and appreciate your interest and be well.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Third Quarter 2025 Radian Group Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Dan Kobell, EVP Finance. Please go ahead.

Thank you, and welcome to Radian's Third Quarter 2025 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website at radian.com. This press release includes certain non-GAAP measures that may be discussed during today's call. Including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity.

A complete description of all of our non-GAAP measures may be found in press release Exhibit F and reconciliations of these measures to the most comparable GAAP measures may be found in press release Exhibit G. These exhibits are on the Investors section of our website.

Today, you will hear from Rick Thornberry, Radian's Chief Executive Officer; and Sumita Pandit, President and Chief Financial Officer.

Before we begin, I would like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For a discussion of these risks, please review the cautionary statements regarding forward-looking statements included in our earnings release and the risk factors included in our 2024 Form 10-K and subsequent reports filed with the SEC. These are also available on our website.

Now I would like to turn the call over to Rick.

Good morning, and thank you all for joining us today. I am pleased to report another quarter of strong performance for Radian. Our mortgage insurance business continues to deliver excellent results, fueled by our large, high-quality in-force portfolio with strong persistency and credit performance. The performance of our portfolio reflects the excellent credit characteristics of the new business we are writing, leveraging our proprietary RADAR rates platform.

In addition to the strong performance of our mortgage insurance business, we continue to deploy capital with discipline and strategic focus. We have a long track record of consistently maintaining strong holding company liquidity, efficiently distributing capital from Radian Guaranty to Radian Group, and delivering value back to stockholders, including the highest yielding dividend in the industry.

Since 2017, we have returned nearly $3 billion of capital to stockholders through dividends and share repurchases, while continuing to explore opportunities for long-term growth that meet our return objectives, including our planned acquisition of Inigo.

Sumita will cover the highlights of our financial results, including the impact of our September announcement regarding the divestiture plan for our mortgage conduit, title and real estate services businesses. The process is well underway, and has attracted interest from numerous potential buyers for each of the 3 businesses.

We have engaged Citizens JMP to lead the sale of the title real estate services businesses and Piper Sandler to lead the sale of the mortgage conduit. As we noted in September, we expect to complete the divestiture process by the third quarter of next year.

Let me spend a few minutes now on the strategic rationale behind the decision to divest these businesses and to acquire Inigo a highly profitable specialty insurer. Over the past several years, we have been focused on building an even stronger Radian for long term. During this time, we have strengthened our capital liquidity position, growing our high-quality mortgage insurance portfolio, invested in our proprietary data and analytics platforms, and leverage the deep experience of our exceptional team.

As part of our ongoing commitment to long-term growth and value creation, we have spent considerable time evaluating different paths to strategically diversify our business. We concluded that the highest value path was to position our company for continued growth as a global multiline specialty insurer. This led to our decision to acquire Inigo. The purchase price of $1.7 billion will be cash funded from available liquidity sources and excess capital with no equity raised.

Along with liquidity at holdco, the funding for the deal includes a unique and creative financing structure of $600 million that will be provided by Radian Guaranty, the Radian Group through an intercompany note with a 10-year term. We believe the valuation for the deal is attractive at 1.5x projected 2025 tangible equity. This acquisition, along with the divestiture plan I mentioned earlier, provides us with a clear strategic path for the future as we transform from a leading U.S. mortgage insurer to a global multiline specialty insurer.

There are several reasons we were attracted to Inigo. The company was founded by highly respected industry veterans with decades of experience in the [ Lloyd's ] market, who turned their deep industry experience into a successful and scaled business. They have attracted an exceptional team who share the founder's entrepreneurial spirit and a shared commitment to radical simplicity and disciplined underwriting.

As we spent time with the team, we continue to be impressed by the people and the business they have built. We are excited to partner with this group of highly experienced leaders with a strong track record of building and managing successful specialty insurance and reinsurance businesses. This highly talented team will continue to lead Inigo post close. The Inigo team aligns well with our core strengths and the cultural match is strong. This makes them a natural fit that complements Radian's mortgage insurance business.

And similar to Radian, Inigo is driven by data science. It shapes everything they do, how they make decisions and how they think about risk. We share this data first mindset as well as an unwavering focus on disciplined underwriting. Our team is working closely with the Inigo team to complete this transaction which is on track to close in the first quarter of 2026.

As we look to the future, we are excited about what we can accomplish together. Radian's transformation from a leading U.S. mortgage insurer into a global multiline specialty insurer is expected to increase our addressable market for continuing operations by a factor of 12 providing flexibility to deploy capital across multiple insurance lines through various business cycles.

We believe this combination also offers meaningful capital synergies as we go forward. By allocating our capital across strong and uncorrelated businesses, we can focus on putting our capital to work where we see the greatest opportunity for economic value and profitable growth.

We look forward to updating you on the Inigo transaction, our divestiture progress and the execution of our go-forward strategy. Sumita will now cover the details of our financial and capital positions.

Thanks, Rick, and good morning to you all. As Rick mentioned in his opening remarks, Radian is committed to long-term growth and value creation, and we have spent considerable time evaluating different strategic parts. Our objective is to build on our foundation and core strengths. With this objective in mind, we determined that the right strategic path was to build Radian into the future as a global multiline specialty insurers by acquiring Inigo.

As a result of the strategic change in the third quarter of 2025, we've also announced a divestiture plan for our mortgage conduit title and real estate service businesses. We've reclassified these businesses as held for sale on our balance sheet and now reflect the results as discontinued operations in our income statement. All prior periods have been revised for these changes and the impact of the accounting changes are presented on Slide 38 of our earnings presentation.

Now let's discuss results of our continuing operations, which demonstrated another strong quarter of performance. In the third quarter, we achieved net income from continuing operations of $153 million or $1.11 per diluted share, the same as the second quarter. Net income inclusive of discontinued operations was $141 million in the third quarter. We generated a return on equity of 12.4%, including discontinued operations. The ROE for our continuing operations is 100 basis points higher at 13.4%.

The grew book value per share 9% year-over-year to $34.34. This book value per share growth is in addition to our regular stockholder dividends which were $35 million during the quarter.

Turning now to the key drivers of our results, which highlight the consistency, balance and resiliency of our mortgage insurance business model. Our total revenues continued to be strong in the third quarter at $303 million. Slide 15 through 17 in our presentation includes details on our mortgage insurance in force portfolio as well as other key factors impacting our net premiums earned.

We generated $237 million in net premiums earned in the quarter, which is the highest level in over 3 years. Our large high-quality mortgage insurance in-force portfolio grew to another all-time high of $281 million. We wrote $15.5 billion of new insurance written in the third quarter of 2025, a 15% increase compared to the same period last year. As shown on Slide 15, our persistency rate remained strong at 84% this quarter. We remain focused on writing NIW that we believe will generate future earnings and economic value while effectively maintaining the portfolio's health, balance and profitability.

As of the end of the third quarter, approximately half of our insurance imports portfolio had a mortgage rate of 5% or lower. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term, and we therefore continue to expect our persistency rate to remain strong.

As shown on Slide 17, the in-force premium yields for our mortgage insurance portfolio remained stable as expected at 38 basis points. With strong persistency rates on the current industry pricing environment, we expect the in-force premium meal generally remain stable for the remainder of the year as well.

As shown on Slide 18, our investment portfolio of $6 billion consists of well-diversified, highly rated securities and other high-quality assets. For the quarter, we generated net investment income of $63 million. Our provision for losses and related credit trends continue to be positive with strong cure activity and very low claim levels.

On Slide 21, we provide trends for our primary default inventory. The number of new defaults in the third quarter was approximately 13,400, a decline of 2% from the same period a year ago. As expected, the number of total defaults increased in the third quarter to approximately 24,000 loans at quarter end, resulting in a portfolio default rate of 2.42%. This increase in total defaults reflects normal seasonal trends and the expected continued seasoning of our large insurance imports portfolio. As we noted in the past, our new defaults continue to contain significant embedded equity, which has been a key driver of recent favorable credit trends, including higher cure rates and reduce severity for policies that result in claim submission.

As shown on Slide 22, our cure trends have been very consistent and positive in recent periods, meaningfully exceeding our initial default to claim expectations. Cure rates in the third quarter exhibited typical seasonal trends in line with similar periods from prior years. We continue to closely monitor the recent news and stress seen in different credit asset classes, like credit cards and [ subprime motor ]. However, the loans in our portfolio and loans in the broader conventional market segment continued to perform well. Our outlook on the mortgage insurance business remains positive, and we will continue to monitor and make any adjustments to pricing as needed.

Let's turn to Slide 23. We maintained our initial default to claim rate of 7.5%, which resulted in $53 million of loss provision for new defaults in the third quarter. Positive reserve development on prior period defaults of $35 million, partially offset this provision for new defaults. As a result, we recognized a net expense of $18 million in the third quarter compared to $12 million in the second quarter.

Now turning to our other expenses where we continue to seek additional operating efficiencies. For the third quarter, our other operating expenses totaled $62 million, down from $69 million in the second quarter. Expenses in the third quarter included $9 million of nonoperating costs related to the Inigo acquisition. Excluding this acquisition-related expense, total operating expense was $54 million a $16 million decline from the prior quarter as reflected on Exhibit E.

We are revising our previous expense run rate guidance for Radian, which was $320 million and included expenses related to discontinued operations. We anticipate operating expenses for continuing operations to be approximately $250 million for the full year 2025. We expect this to represent our annual expense run rate as we move into 2026.

Moving to our capital available liquidity and related strategic actions. Radian Guaranty's financial position remains strong, it paid a $200 million dividend to Radian Group in the third quarter while maintaining a PMIERs cushion of $1.9 billion. In addition, we expect that Radian Guaranty will be $195 million dividend in the fourth quarter, bringing total distributions to Radian Group during 2025 to $795 million.

We expect to close the Inigo transaction in the first quarter of 2026, funding the $1.7 billion purchase price with our existing resources. Our available holding company liquidity grew to $995 million as of quarter end. We expect a $195 million dividend to be paid to our holding company in the fourth quarter, as I just noted, and expect $600 million to be paid from Radian Guaranty to Radian Group in the form of a 10-year intercompany note. With these payments, we expect our holding company liquidity to be approximately $1.8 billion at the beginning of 2026.

In addition, we expect dividends of at least $600 million from Radian Guaranty to Group during 2026. With these resources, we expect to fund the Inigo acquisition in the first quarter of the year and maintained sufficient liquidity at our holding company after the transaction closes.

We also just expanded our credit facility to $500 million. The facility is currently undrawn and is available for general corporate purposes, However, we expect that any draw of the facility will be repeated during 2026. Our leverage ratio declined to 18.7% this quarter, and we expect it to remain below 20% by year-end 2026.

We expect Inigo will continue to operate as a stand-alone business, complementing Radian's mortgage insurance business and we do not expect Inigo to have any funding needs from Radian Group or Radian Guaranty to achieve its 2026 business plan.

As Rick mentioned, this is an exciting time for Radian. This acquisition is expected to double our earned premiums in a market that is expected to grow at 8% and expand the total addressable market by 12x. This will enable Radian to strategically allocate capital across diverse insurance lines and focus on areas with the greatest potential for profitable growth.

Lastly, as shown on Slide 7, by combining Radian and Inigo, we expect to deliver mid-teen operating earnings per share accretion and approximately 200 basis points of ROE accretion starting in year 1.

I will now turn the call back over to Rick.

Thank you, Sumita. Our results in the quarter continue to reflect the balance and resiliency of our company, as well as the strength and flexibility of our capital and liquidity positions. They also reflect the resilience of our mortgage insurance business model. Over the years, our industry has helped millions of families purchase their home or refinance their mortgage and is well positioned to continue promoting affordable, sustainable homeownership through various economic cycles.

We are proud of the important role we play in the housing finance system and in building strong communities. We look forward to updating you on our progress as we transform from a leading U.S. mortgage insurer to a global multiline specialty insurer. And finally, I want to recognize and thank our team for the outstanding work they do every day.

And now operator, we would be happy to take questions.

[Operator Instructions] And our first question comes from Bose George with KBW.

Actually, first, I just wanted to ask, when you talk about the mid-teens accretion for 2026, should we add that 200 basis points to your current run rate ROE, which is a little over 13%. So I guess that would be a little over 15% in terms of the ROE and then your book value going into 2026, it looks like it will be about $35. So does that seem reasonable 15% on that $35?

Thanks for the question, Bose. So I think if you look at our ROE this quarter, on an operating basis, our ROE was 13.9%, that excludes the impact of some onetime items related to the Inigo transaction where we paid and will be paying advisory fees. I think from an accretion perspective, I think assuming a 200 basis points increase on top of that would be fair. I mean, I think the 13.9% is comparable to also what we had last year and is a good run rate for us to think about for our stand-alone MI business.

Keep in mind also that because we are currently -- we paused our share repurchases. So our denominator is a little bit more bloated as we accrue capital to pay for Inigo. I think the 13.9% ROE is probably a little lower than where we may be once that excess capital gets paid out to purchase any go. And so the 200 basis point decrease can be added to the 13.9% on operating ROE that we have presented in this quarter.

Okay. Great. That's very helpful. And then can you walk through the potential capital benefit from using the unearned premiums at Radian as capital at Inigo? Is that something that eventually could be a source of incremental accretion over the 200 basis points that you've discussed?

So I think in the future, we will be giving you more details, Bose, on exactly what are those opportunities that we see present to ourselves between the MI business as well as Inigo. I think as we mentioned in our presentation, at this stage, I think what we have discussed is that we do see potential synergies between the MI business and Inigo going forward, including some reinsurance that we could do between the 2 businesses. I think post close of Inigo, we plan to do an Investor Day early next year, and I think we'll be sharing more details about potential reinsurance opportunities that could potentially improve the accretion numbers further. I think the numbers that we have presented to you last month and now again in this earnings presentation assumes base case run rate assumptions and really is an addition of Inigo as it is operated today to Radian's numbers. We've not assumed these additional capital and operating efficiencies that we will discuss further with all of you as we close the transaction next year.

And our next question comes from Doug Harter of UBS.

As you look at divesting the noncore businesses, is there -- how should we think about capital that could be freed up from those businesses in addition to kind of the cost saves that you've already kind of highlighted in discontinued operations?

Yes. So I think as I mentioned, as of now, as of Q3 what we have done is we have reclassified discontinued operations as held for sale. If you look at our balance sheet and the carrying values for these 3 businesses, we carry these businesses at about $170 million or so as of the third quarter. We do not expect to have either like a huge gain or a huge loss versus those levels. I think the held-for-sale number is based on our best accounting estimate today of true value of those businesses.

I think we have given some indications to you in terms of what could be additional expenses that we incur in selling the businesses. I think Rick mentioned we've hired 2 banks. We've estimated a $7 million expense in selling the businesses today, there could be more or less going forward. But we think that the carrying value of $170 million is our best estimate as of today of the 2 value of those 3 businesses.

Great. I appreciate that. And then how are you thinking about the key steps that need to happen in order to kind of return -- start returning buyback -- or return to the buyback program. What are the key steps that we should be looking for in that?

Yes. So I think that's a good question. I think maybe just like walking you through our liquidity position and how to think through that math. So if you think about our Q3 ending liquidity, we ended the quarter with $995 million this quarter. We are expecting to pay another $195 million in the fourth quarter as dividends from guarantee to group. And our best estimate as of today is an additional $100 million of dividends in Q1 of next year. When you add all of that, that gets you to $1.29 billion liquidity number for holdco. We also will be drawing down on the intercompany note of $600 million at close -- when we close Inigo.

For next year, the estimate and guidance that we've given is that we expect at least a $600 million minimum dividend from our GI to group. So I think the best way to maybe think about our share repurchase and our liquidity overall is that within a few quarters of the Inigo purchase, we will again be in an excess liquidity position in group, as and when that happens, I think we'll revisit our share repurchase strategy. But I think assuming that it will happen pretty quickly given that we will be paying at least $600 million of dividends next year. That is a good run rate for you to assume as you think about when next year would be in that excess capital position in holdco for us to revisit our share repurchase strategy, which, as you know, we have paused right now because we are paying for the full $1.7 billion purchase price through internal resources and are not raising any new equity.

And our next question comes from Mihir Bhatia of Bank of America.

Maybe just 1 quick one. Just any update on the timing of the divestitures and where you are with that process? I think you had said Q3 2026 earlier?

Yes. Mihir, this is Rick. We're -- I think we're still sticking to the -- to be completed by third quarter of next year. But just to give you an update on the process, as we mentioned, we've hired the 2 banks to kind of facilitate the process, actually had a tremendous amount of inbound interest expressed across all 3 businesses, and that process is initiating as we speak, both in terms kind of sharing information with a broad group of potential interested parties.

So we expect the process to move quickly over the coming months and look forward to keeping you up to date as we go through this process. As we get into early next year, I think we'll have more of an update. But one of the things that I'm -- as we watch this process go, the 1 thing I'm proud of is our teams have stayed laser focused on running the business and continuing to serve our customers. And I think that positions each of those businesses well for the outcome that we're working towards. So -- but yes, we'll keep you posted as we go quarter-to-quarter. But right now, it's fully engaged process with the bankers and the teams and I think working very well.

Got it. And then maybe just staying -- maybe turning to the business itself. I guess, one question I was curious on was what would it take for you to move that claim rate below the 7.5% you're at? And the reason I ask is, I mean I think you had the slide with the the same triangles, the cure triangles, if you will. And as you note on the slide, 90% get cure within a year and like your cure rates are running in the high 90s. So just curious on like what you actually need to see happen to change that claim rate?

Yes. I think Mihir, as you're aware, we've made a change to that assumption in maybe your 2 or 3 quarters back when we were at 8% default to claim rate, and now we're at 7.5%. I think when we look at that assumption, we do want to make sure that we are making that assumption through the cycle. You're right that when you look at our core trends and the cure triangles that we show you on Slide 22. We do have almost 97% to 98% of our default curing within 12 quarters. But when we think about our through the cycle assumption, we think that these are more favorable than where we would expect this to play out in the long run.

And therefore, that 7.55 is our best estimate of that through-the-cycle performance. As of now, we feel really good about that assumption given the fact that we just updated this a few quarters back. and we don't expect to make changes to it in the near future. But again, it's a through-the-cycle assumption. And we think it's the right way for us to run the business. It's prudent and has a view that's through the cycle.

Sure. Maybe just one question on that though. Has something changed post-COVID. I don't know if it's like the policies and people just being more willing to do for bearings than before? Or are these claim rate trends pretty similar to what you were seeing in, let's say, 2018, 2019? I guess what I'm trying to understand is, has something changed in the housing mortgage servicing backdrop, which has enabled these cure rates to be so strong?

Yes. Mihir, that's a great question, and Sumita I could tag team on that one because it's something we ask ourselves each quarter, too. Are we seeing something fundamentally different than what has occurred in the past. I think since COVID, obviously, we've had a tremendous amount of home equity growth, which provides borrowers with a variety of different avenues to solve some sort of financial hardship, right? And I think it also helps servicers, counsel, borrowers, how to navigate that hardship, combined with the fact that we -- through COVID, there's muscle memory in terms of assisting the borrower through that hardship through forbearance programs and other things.

So I do think, to your point, pre-COVID, post-COVID the combination of home value increases and also kind of the muscle memory from some of the forbearance programs has proven to be positive. I would say, as we go further away from that home equity kind of accelerated growth rate we saw in '20 and '21, we get the more normalized kind of home appreciation maybe with different regional downturns. That part will normalize.

But I do think as an industry, the GSEs, servicers fundamentally have altered processes that are working to kind of get borrowers back on their feet. And from a reserving point of view, we spend time each quarter kind of assessing how we think that will impact the go forward. And what Sumita has said is how we think about it, which is we really -- on day 1, we have to take a multiyear view through the cycle. And I would just add to Sumita comments that today, we also continue to evaluate some of the uncertainty in the marketplace that's playing out currently that kind of influence that through-the-cycle view.

So I think definitely seen positives over the last 4 or 5 years. Some of that is probably sustainable. Some of it will normalize over time, and that's what we're really trying to evaluate.

Thank you. I'm showing no further questions at this time. I'd like to turn it back to Rick Thornberry for closing remarks.

Thank you. Appreciate everybody joining us today and for the questions. And as you can tell, we're excited about the path going forward with the acquisition of Inigo in the -- hopefully, in the new year. And we look forward to seeing as many of you and talking to as many of you as we can over the coming weeks, but we appreciate your time and your support. Take care. Enjoy the holidays. If we don't get a chance to see you before then, and we'll talk soon. Take care.

This concludes today's conference call. Thank you for participating, and you may now disconnect.