Enact (ACT) Q2 FY26 earnings call: guidance and Q&A

Asked about the expected trend of the base premium yield for the rest of the year, given recent slight declines, and commentary on competitive intensity.

Dean stated that the base premium rate outlook remains consistent with the initial 2026 guidance of 'relatively flat versus 2025,' possibly with a slight downward tilt. Rohit added that the MI market is dynamic but constructive, with competitive pricing still reflecting economic uncertainty and attractive risk-adjusted returns.

“I would say despite the modest first half pressure, our base premium rate outlook really remains consistent with our 2026 guidance that we gave at the beginning of the year that we expect it to be relatively flat versus 2025.”

asked by Mihir Bhatia · answered by Hardin Mitchell

Asked to quantify the ROE on new business today and compare it to prior vintages (2023, 2024).

Rohit declined to provide quantitative ROE guidance, citing company policy and the granular, opaque nature of their risk-adjusted pricing engine. He qualitatively stated that the ROEs are 'accretive to shareholder value.'

“Mihir, I think I'm going to have a tough time giving you any ROE guidance. We have not been providing ROE guidance either in a range or any kind of point estimate. I would say that we find the ROEs accretive to shareholder value.”

asked by Mihir Bhatia · answered by Rohit Gupta

Inquired about the expected trend of default rates, factors driving current strength, and future expectations.

Dean confirmed strong credit performance across new delinquencies and cures, consistent with seasonal trends. He noted that newer books, originated in a purchase-heavy market with less HPA, are expected to produce more delinquencies as they age, but this was priced in. He also mentioned expected seasonal uptick in delinquency rates in H2 2026.

“I think it's reasonable to expect an uptick in Del grade from at least first half levels in the short term from a del grade perspective.”

asked by Mihir Bhatia · answered by Hardin Mitchell

Asked when delinquencies are expected to peak due to the seasoning of the portfolio.

Dean reiterated that H2 2026 would likely see a seasonal uptick in delinquency rates, followed by a pivot in 2027 with positive impacts on cures and new delinquencies. He emphasized that the macroeconomic trajectory would be a significant influence beyond seasonality.

“So from a timing perspective, I think you're going to see a little bit of pressure to del rate over the course of the second half of 2026 and then from there, a lot of that's going to be dictated by macroeconomic drivers...”

asked by Bose George · answered by Hardin Mitchell

Discussed the multifaceted impact of HPA on credit, TAM expansion, and affordability, asking where the company sees itself in this cycle.

Rohit explained that affordability is key, driven by home prices, interest rates, and income growth. He noted that while HPA helps the back book, high rates combined with elevated prices create affordability challenges. He suggested that relief in rates, bringing them into the 6% range, could bring sidelined consumers back to the market.

“I think the fact that we are operating in a higher rate environment in addition to continued elevated prices leads to that affordability challenge that you're referring to.”

asked by Rick Shane · answered by Rohit Gupta

Followed up on prior concerns about temporary rate buydown loans from 2023-2024, asking if the company's underwriting strategy was validated given sustained higher rates.

Rohit confirmed that temporary buydown consumers were qualified at the fully indexed rate, and their performance has not deteriorated. He also noted that permanent buydowns have no rate shock and continue to perform well.

“So for temporary buydowns, we have not seen a deterioration in performance. The performance has held up pretty well.”

asked by Rick Shane · answered by Rohit Gupta

Asked if the expense guidance includes amortization or only acquisition and operating expenses.

Daniel Kohl clarified that the expense guidance includes both operating expenses and amortization on the P&L.

“No, that's a good question. It includes both operating expenses and the amortization on our P&L.”

asked by Rowland Mayor · answered by Daniel Kohl

Asked about the factors driving the increase in capital return guidance from $500 million to $550 million-$600 million, specifically if regulatory approvals were a factor.

Dean stated the primary driver was strong business performance in H1 2026, which generated additional excess capital and confidence. He also noted that the market was slightly smaller than initially anticipated. He confirmed no change in the regulatory environment, which remains accommodative.

“What I would say as kind of the fundamental driver for the increase in guidance from our prior $500 million to our new range of $550 million to $600 million is really foundationally integrated into our business performance.”

asked by Rowland Mayor · answered by Hardin Mitchell