Enact Holdings, Inc. (ACT) Q2 2026 Earnings: Revenue $317M (+4.1%)
ACT — Q2 2026 Financial Report Analysis
Q2 · Fiscal year 2026 · Published by Pham Hop
Enact's Q2 2026 net income rose 4% to $175 million and diluted EPS 13% to $1.25, carried by investment income and buybacks while premiums stayed flat and the delinquency rate climbed to 2.59% from 2.32%.
Net premiums written
$240M
+0.6% YoY
Net income
$175M
+4.2% YoY
Diluted EPS
$1.25
+12.6% YoY
Loss ratio
14.0%
Book value per share
$39.06
+11.0% YoY
Net premiums written (NPW): insurance sold in the period, after the share passed on to reinsurers. Combined ratio: claims plus expenses per dollar of premium earned; below 100% means the insurance business itself made money before investment income. Loss ratio: the claims part alone.
This period vs a year ago
Same period last year
This period
Net premiums written▲+0.6%
≈$239M
$240M
Net income▲+4.2%
≈$168M
$175M
Diluted EPS▲+12.6%
≈$1.11
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Overview
Enact Holdings is a private mortgage insurer. When a homebuyer puts down less than 20%, the lender (and Fannie Mae or Freddie Mac, which buy most of these loans) usually requires insurance that pays part of the lender's loss if the borrower stops paying and the home is sold for less than the debt. The borrower pays the premium, typically monthly; Enact carries the risk. So Enact earns a slow, steady stream of premiums on a very large book of insured mortgages, and its profits swing mainly on how many of those borrowers fall behind and how many of those catch back up.
In the second quarter of 2026 (April–June), Enact earned $175 million, or $1.25 per diluted share, up from $168 million and $1.11 a year earlier. Premium income was flat at $245 million. The gain came from outside the insurance book: net investment income rose 11% to $73 million, and a 7% smaller share count turned 4% profit growth into 13% EPS growth. Underneath, credit got a little worse: more borrowers are behind on payments than a year ago, and a smaller release of old reserves pushed the loss ratio up from 10% to 14%.
At a glance
Diluted EPS $1.25, up 12.6% — but net income rose only 4.2%; the rest came from buying back shares.
Delinquency rate 2.59%, up from 2.32% — 24,330 insured loans were two or more payments behind at June 30, about 10% more than a year earlier, though the rate is still low in absolute terms.
Book value per share $39.06, up 11.0% — the value of shareholders' equity per share keeps climbing because Enact earns a 13% return on equity and retires shares.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total revenues
$317.3M
$304.9M
+4.1%
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$1.25
Book value per share▲+11.0%
≈$35.19
$39.06
Net premiums written
$240.3M
$239.0M
+0.6%
Net premiums earned
$244.7M
$245.3M
-0.3%
Net investment income
$73.2M
$65.9M
+11.1%
Losses incurred
$33.3M
$25.3M
+31.5%
Loss ratio
14%
10%
+4 pts
Expense ratio
21%
22%
-1 pt
Net income
$174.8M
$167.8M
+4.2%
Diluted EPS
$1.25
$1.11
+12.6%
Adjusted operating EPS (non-GAAP)
$1.26
$1.15
+9.6%
Return on equity (annualized)
13.0%
13.0%
flat
Book value per share
$39.06
$35.20
+11.0%
Primary insurance in-force
$274.0B
$269.8B
+1.6%
New insurance written
$15.2B
$13.3B
+15%
Persistency rate
80%
82%
-2 pts
Primary delinquency rate
2.59%
2.32%
+0.27 pts
PMIERs sufficiency
161%
165%
-4 pts
Source: Q2 2026 Form 10-Q (income statement, reinsurance note, MD&A key metrics) and the Q2 2026 earnings release for adjusted operating EPS and ROE.
The numbers that matter for a mortgage insurer
A few terms carry this business, so briefly:
Insurance in-force (IIF) is the total unpaid balance of all the mortgages Enact currently insures — $274.0 billion. Premiums are charged as a small percentage of it, so IIF is the closest thing Enact has to a revenue base. It grew only 1.6% year over year, and the number of insured policies actually fell 1.3% to 940,648.
New insurance written (NIW) is new mortgages insured in the quarter: $15.2 billion, up 15%, which the 10-Q attributes to "larger estimated purchase and refinance mortgage insurance markets" in the quarter. 87% was for home purchases rather than refinancing.
Persistency is the share of last year's insured loans still on the books a year later. It slipped to 80% from 82%. High persistency is good for Enact — every loan that stays keeps paying premiums — and it has been high because most borrowers locked in cheap mortgages years ago and have no reason to refinance. Enact says about 12% of its loans carry a rate at least 0.5 percentage points above June's 6.5% average mortgage rate, i.e. the pool that could refinance away if rates fall.
Delinquency rate is the share of insured loans two or more payments behind. Not every delinquency becomes a claim — most "cure" when the borrower catches up, modifies the loan or sells the home. In the first half of 2026, 25,858 loans newly fell behind and 25,746 cured; only 641 went to a paid claim.
Premium rate. The net earned premium rate — premiums kept after reinsurance, divided by average IIF — was 0.34%, down from 0.35%. On a $274 billion book, that one basis point is roughly $27 million of annual premium.
This explains the flat premium line: IIF grew a little, but the price per dollar insured edged down and Enact passed more premium to reinsurers (ceded premiums rose to $35.1 million from $32.1 million), which is how it buys protection against a bad housing year.
Why the loss ratio rose from 10% to 14%
The loss ratio — losses booked as a share of premiums earned — rose four points, but the underlying cost of new delinquencies did not change. Losses tied to the current year were $66.5 million, against $66.8 million a year earlier. The 12,299 primary loans that newly defaulted in the quarter (up from 11,567) added $68 million of expected losses, versus $69 million a year ago.
What changed is the size of the reserve release. Enact sets aside money when a loan goes delinquent; when more of those borrowers catch up than expected, it releases part of that money back into profit. In Q2 it released $37 million ("driven by cure performance and loss mitigation activities"), against $48 million a year earlier. A smaller gift from old reserves, not worse current losses, is most of the loss ratio increase.
That said, the direction of credit is slowly worse. Delinquent loans rose to 24,330 from 22,118 a year earlier, and the 10-Q attributes the rise in new delinquencies to "the normal loss development pattern on newer books" — loans written in the last few years are moving into the age when defaults typically rise. Claims paid on primary loans in the first half nearly doubled to $43.7 million from $22.9 million, and 641 loans went to claim versus 397. Those are small figures against $599 million of loss reserves, but the trend is up.
Takeaway: Enact's per-share growth this quarter came from investment income and a 7% smaller share count, not from insurance: premiums were flat, and the only reason losses are still tiny is that borrowers who fell behind in past years keep catching up faster than Enact expected. As those reserve releases shrink and delinquencies on newer loans rise, the loss ratio has more room to go up than down.
What the headline numbers hide
Buybacks did most of the EPS work. Net income rose 4.2% but diluted EPS rose 12.6%, because the diluted share count fell to 140.3 million from 150.7 million after repeated buybacks (2.2 million shares repurchased in Q2 alone, for about $93 million). A lower tax rate (20.5% vs 21.8%) added a little. Pretax income grew just 2.5%.
Profit growth came from the investment portfolio. Net investment income rose $7.3 million on higher yields and a larger portfolio — more than the entire $7.0 million increase in net income. The insurance line (premiums minus losses and expenses) earned less than a year ago.
GAAP vs adjusted is a small gap. Adjusted operating income ($177.4 million) excludes $2.2 million of realized investment losses and about $1.0 million of reorganization costs, net of tax. The adjustment is small and in the ordinary direction; adjusted EPS grew 9.6% versus 12.6% for GAAP EPS, because last year's quarter had larger investment losses ($7.3 million).
Cash conversion is clean. Operating cash flow for the first half was $342.6 million, essentially equal to net income of $342.6 million.
One balance-sheet line to watch. Premiums receivable rose to $66.7 million from $44.1 million a year earlier (and $47.4 million in March) while earned premiums were flat. The 10-Q does not explain it; it may be timing, and it is small against $245 million of quarterly premiums, but it is the one working-capital item moving faster than sales.
Capital cushion edging down. PMIERs sufficiency — how much capital Enact holds above the level Fannie Mae and Freddie Mac require of approved mortgage insurers — was 161% ($1.9 billion of excess), down from 165% a year ago, as Enact pays out more to shareholders. Still a large margin.
Capital returns
Enact paid $63 million in dividends and $187 million in buybacks in the first half, and raised its quarterly dividend to $0.24 from $0.21 in May. Management raised its full-year 2026 capital return expectation to $550–600 million, meaning roughly $300–350 million more over the second half. It bought back another 0.7 million shares in July, and about $345 million remained on its $500 million authorization at July 31. Genworth, Enact's majority owner, sells shares into the buyback too: Enact paid it $75.3 million for repurchased shares in Q2.
Outlook
Enact gives no earnings guidance beyond the capital return range. Its 10-Q describes the environment as volatile — inflation of 3.5% in June, mortgage rates still high and housing affordability "challenged" — while unemployment dipped to 4.2%. For Enact, unemployment is the variable that matters most: people generally stop paying mortgages when they lose income, not when home prices stall.
Our read: earnings look set to keep growing modestly per share, but through buybacks and investment income rather than insurance growth. With IIF growing under 2% and the premium rate drifting down, premium revenue is unlikely to rise much. The two things to watch in Q3 are whether the delinquency rate keeps climbing past 2.59%, and whether reserve releases keep shrinking — if both happen together, the loss ratio could move toward the high teens even without a recession. A drop in mortgage rates would help new business but would lower persistency as borrowers refinance away.