Enact Holdings, Inc.

Company Overview

Business Model: Enact Holdings, Inc. is a leading private mortgage insurance company operating in the United States housing finance market since 1981. The Company's core value proposition is to help people buy and keep their homes by providing residential mortgage guaranty insurance. This insurance covers a portion of the unpaid principal balance of Low Down Payment Loans (mortgage loans where the loan amount exceeds 80% of the home's value), protecting lenders and investors against losses from nonpayment. Enact Holdings, Inc. facilitates the sale of mortgages to the secondary market, including to private investors and government-sponsored enterprises (GSEs) such as Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, thereby expanding financing access for prospective homeowners, particularly first-time home buyers. Revenues are primarily generated through premiums collected for mortgage credit protection and investment income from a portfolio of high-quality, predominantly fixed-income assets. The Company also offers mortgage and credit-related insurance and reinsurance through subsidiaries, including Enact Re Ltd., and provides fee-based contract underwriting services to mortgage lenders.

Market Position: Enact Holdings, Inc. holds a leading position in the U.S. private mortgage insurance market, operating in all 50 states and the District of Columbia. The Company serves a large and diverse customer base of approximately 1,600 mortgage lenders, including national banks, non-bank lenders, local mortgage bankers, community banks, and credit unions. Since 2012, Enact Holdings, Inc. has maintained a market share of new insurance written (NIW) between 12.0% and 20.4% per quarter. Competition is primarily based on pricing, underwriting guidelines, customer relationships, service levels, financial strength ratings, and technology. The largest customer accounted for 22% of total NIW and 12% of total revenues in 2025, with the top five customers generating 33% of NIW in the same year.

Recent Strategic Developments:

• Credit Risk Transfer (CRT) Program Expansion: Enact Holdings, Inc. actively uses its CRT program to manage loss volatility and optimize capital. In 2025, the Company entered into two excess-of-loss reinsurance transactions providing approximately $225 million and $260 million in coverage for expected NIW from January 1, 2025, through December 31, 2025, and January 1, 2026, through December 31, 2026, respectively. An additional excess-of-loss transaction for $170 million in coverage was secured for expected NIW from January 1, 2027, through December 31, 2027. A quota share reinsurance agreement was also signed on September 23, 2025, to cede approximately 34% of expected NIW from January 1, 2027, through December 31, 2027.
• Capital Structure Enhancement: On September 30, 2025, Enact Holdings, Inc. established a new five-year, unsecured revolving credit facility for an initial aggregate principal amount of $435 million, replacing a previous $200 million facility. This facility, undrawn as of December 31, 2025, enhances financial flexibility for working capital, general corporate purposes, dividends, and capital contributions to insurance subsidiaries.
• Credit Rating Upgrades: Enact Mortgage Insurance Corporation received upgrades to its long-term financial strength and issuer credit ratings from Fitch Ratings, Inc. (from A- to A on January 17, 2025) and Moody’s Investor Service, Inc. (from A3 to A2 on August 6, 2025). S&P Global Ratings and A.M. Best affirmed their A- ratings with a positive outlook.
• Shareholder Capital Returns: The Company increased its quarterly dividend from $0.185 per common share in Q1 2025 to $0.21 per common share for Q2, Q3, and Q4 2025. Enact Holdings, Inc. repurchased 10,532,963 shares for approximately $382 million in 2025. A new share repurchase program authorizing up to an additional $350 million was announced on April 30, 2025, and a further $500 million program was authorized subsequent to year-end on February 3, 2026.

Geographic Footprint: Enact Holdings, Inc. operates across all 50 U.S. states and the District of Columbia. As of December 31, 2025, the largest state concentration of primary risk in-force (RIF) was California (12%), followed by Texas (9%) and Florida (8%). The Phoenix, AZ, Metropolitan Statistical Area (MSA) represented the largest MSA/Metro Division concentration at 3% of primary RIF. The Company's workforce is distributed with 51% in its Raleigh, North Carolina headquarters and 49% in field roles, primarily sales and underwriting. Enact Re Ltd., a wholly owned subsidiary, is based in Bermuda.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 88.8% (2025) vs. 96.1% (2024)
• Operating Margin: 69.5% (2025) vs. 73.1% (2024)
• Net Margin: 54.6% (2025) vs. 57.3% (2024)

Investment in Growth:

• R&D Expenditure: Not explicitly quantified as a separate line item. The Company invests in technology to drive operational excellence, including artificial intelligence and machine learning for risk and portfolio management.
• Capital Expenditures: Not explicitly quantified.
• Strategic Investments: In 2023, Enact Holdings, Inc. contributed $500 million to Enact Re Ltd. In 2024, the Company committed to fund approximately $10 million over the life of a limited partnership investment, with approximately $8.9 million remaining unfunded as of December 31, 2025.

Business Segment Analysis

Enact Holdings, Inc. operates as a single reportable segment, Mortgage Insurance. The Chief Executive Officer, as the chief operating decision maker, reviews the Company's financial performance and allocates resources on a consolidated basis. Consolidated net income is the primary measure of segment profit or loss used for evaluating performance, competitive analysis, and financial planning. All significant segment expenses are disclosed in the consolidated income statement, and segment assets are reported on the consolidated balance sheet.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Enact Holdings, Inc. repurchased 10,532,963 shares of common stock at an average price of $36.25 per share, totaling approximately $382 million, during the year ended December 31, 2025.
• Dividend Payments: The Company paid total dividends of $0.815 per common share, amounting to $120.8 million, in 2025. This included a $0.185 per share dividend in Q1 2025, followed by $0.21 per share in Q2, Q3, and Q4 2025.
• Dividend Yield: Based on the December 31, 2025, closing price of $239.06, the dividend yield was approximately 0.34%.
• Future Capital Return Commitments: Subsequent to year-end, on February 3, 2026, a new share repurchase program authorizing up to an additional $500 million of common stock was announced. The Company intends to continue paying regular quarterly cash dividends, subject to Board of Directors and Genworth Financial, Inc. approval.

Balance Sheet Position:

• Cash and Equivalents: $582,493 thousand as of December 31, 2025.
• Total Debt: $744,481 thousand in long-term borrowings as of December 31, 2025.
• Net Cash Position: $(161,988) thousand (net debt) as of December 31, 2025.
• Credit Rating: Enact Mortgage Insurance Corporation holds financial strength ratings of A2 (Stable) from Moody’s, A (Stable) from Fitch, A- (Positive) from S&P Global Ratings, and A- (Positive) from A.M. Best. Enact Re Ltd. is rated A- by A.M. Best and A- by S&P Global Ratings.
• Debt Maturity Profile: The 6.25% Senior Notes mature on May 28, 2029. The 2025 Revolving Credit Facility matures in September 2030.

Cash Flow Generation:

• Operating Cash Flow: $724,519 thousand for the year ended December 31, 2025.
• Free Cash Flow: Not explicitly stated.
• Cash Conversion Metrics: Not explicitly stated.

Operational Excellence

Production & Service Model: Enact Holdings, Inc. employs a rigorous approach to underwriting new insurance risk, leveraging decades of loan-level data. Underwriting principles require verified borrower capacity and willingness to meet obligations, along with well-supported collateral valuations. Guidelines incorporate credit eligibility requirements for FICO scores, LTVs, documentation, and Debt-to-Income (DTI) ratios, with all loans passing through an eligibility rules engine. The Company's underwriting guidelines are largely consistent with those of the GSEs, and it generally accepts GSE automated underwriting decisions subject to review. Underwriting is conducted through both non-delegated (individual loan review by dispersed staff and contract underwriters) and delegated (lender-performed underwriting based on Company guidelines) programs. In 2025, approximately 73% of new insurance written by loan count utilized delegated underwriting services. An independent quality assurance function conducts pre- and post-closing reviews, and the Company actively engages in loss mitigation efforts with customers, investors, and servicers to cure delinquencies and reduce claims.

Supply Chain Architecture: Key Suppliers & Partners:

• Investment Management: Genworth Financial, Inc. serves as the primary investment manager for the insurance subsidiaries, while a third-party manager directs the investment portfolio of Enact Holdings, Inc. External asset managers are utilized for certain asset classes.
• Reinsurance Partners: A panel of highly-rated reinsurance partners (A- or better by S&P or A.M. Best, or A3 or better by Moody’s) provides traditional excess-of-loss and quota share reinsurance. Unaffiliated special purpose insurers (Triangle Re Entities) are used for collateralized reinsurance via insurance-linked notes.
• Technology Partners: The Company maintains long-standing relationships with mortgage industry technology platforms and service providers, supported by a dedicated integration team for customized loan delivery solutions.

Facility Network:

• Manufacturing: Not applicable for an insurance company.
• Research & Development: While no dedicated R&D facilities are specified, the Company invests in technology, including artificial intelligence and machine learning, for risk and portfolio management.
• Distribution: Products are distributed through a dedicated national sales force, inside sales representatives, and a digital marketing program.
• Headquarters: Leased headquarters in Raleigh, North Carolina (approx. 130,000 sq ft, lease expires December 2027).
• Other Office: Leased office in Washington, D.C. (approx. 2,022 sq ft, lease expires April 2026).

Operational Metrics:

• Delegated Underwriting: 73% of new insurance written by loan count in 2025 (71% in 2024).

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Enact Holdings, Inc. utilizes a dedicated sales force across the United States and inside sales representatives to foster direct customer relationships.
• Channel Partners: The Company forms strategic partnerships with other mortgage service providers to expand its distribution reach.
• Digital Platforms: Digital marketing programs and customer technology platforms, including an ordering and rate quote website, enable customers to easily access and order mortgage insurance products and communicate directly with the Company.

Customer Portfolio: Enterprise Customers:

• Enact Holdings, Inc. maintains active relationships with approximately 1,600 mortgage lenders, diversified by size, type, and geography, including large money center banks, non-bank lenders, national and local mortgage bankers, community banks, and credit unions.
• Customer Concentration: The largest customer accounted for 12% of total revenues and 22% of new insurance written (NIW) in 2025. The top five customers collectively generated 33% of NIW in 2025. No other single customer accounted for 10% or more of total revenues or NIW in 2025.

Geographic Revenue Distribution:

• California: Represented 12% of primary risk in-force (RIF) as of December 31, 2025.
• Phoenix, AZ MSA: Represented 3% of primary RIF as of December 31, 2025.
• The Company operates in all 50 U.S. states and the District of Columbia, with a diversified portfolio across these regions.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The U.S. residential mortgage market is one of the largest globally, with private mortgage insurance playing a critical role in facilitating secondary market sales, especially for Low Down Payment Loans. The market is influenced by macroeconomic factors (economic growth, unemployment, interest rates, home affordability), legislative and regulatory actions, and GSE policies. Private mortgage insurance penetration is higher for purchase originations due to typically higher LTV ratios. Recent trends indicate slower U.S. purchase mortgage originations due to elevated mortgage rates and affordability pressures, though these pressures eased slightly at the end of 2025 as rates declined and home price growth slowed.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: Enact Holdings, Inc. competes directly with five other active private mortgage insurers (Arch Capital Group Ltd., Essent Group Ltd., MGIC Investment Corporation, NMI Holdings, Inc., and Radian Group Inc.), as well as federal government agencies like the Federal Housing Administration (FHA) and the United States Department of Veterans Affairs (VA).

• FHA and VA: For the first three quarters of 2025, the FHA held a 35% share and the VA a 26% share of the mortgage insurance market. Competition with government agencies is primarily on price and less restrictive underwriting guidelines, which typically attract borrowers with lower FICO scores.
• Private Mortgage Insurers: Competition is based on pricing, underwriting guidelines, customer relationships, service levels, policy terms, loss mitigation practices, financial strength ratings, reputation, management strength, product features, and technology.

Emerging Competitive Threats: Competition also arises from GSEs, portfolio lenders who self-insure, reinsurers, and other capital markets participants utilizing financial instruments to mitigate risk. This includes GSE risk-sharing transactions, portfolio lenders holding credit risk without enhancement, and products like "simultaneous seconds" that combine first and second lien loans to avoid mortgage insurance.

Competitive Response Strategy: Enact Holdings, Inc.'s strategy focuses on differentiating itself through best-in-class underwriting, investing in efficiencies and decision-making, maintaining strong capital levels, optimizing its Credit Risk Transfer program, and delivering attractive risk-adjusted returns through disciplined capital allocation. The Company continuously adjusts its underwriting and pricing strategies to manage risk and profitability while remaining competitive.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company faces risks from deteriorating economic conditions, severe recessions, or declines in home prices, which can adversely affect loss experience by increasing borrower defaults and reducing property values. Changes in interest rates can reduce new mortgage originations and refinances, impacting new insurance written (NIW) and earned premiums, while also affecting persistency rates and potentially increasing defaults. A decrease in Low Down Payment Loan originations or an increase in mortgage insurance cancellations (due to factors like declining interest rates or home price appreciation) could lead to a decline in revenue. Technology Disruption: Risks related to emerging and changing technology, including artificial intelligence, could impact results of operations or financial condition, particularly if the Company fails to anticipate or respond effectively to digital disruption or if its models prove inaccurate. Customer Concentration: Undue concentration by customer or geographic region increases exposure to loss of business or adverse performance. The largest customer accounted for 22% of NIW and 12% of total revenues in 2025, posing a risk if this customer reduces business or exits the market.

Operational & Execution Risks

Supply Chain Vulnerabilities: Reliance on third-party vendors for unique or cost-efficient products/services exposes the Company to risks if these vendors fail to meet obligations, provide inaccurate information, or experience disruptions. Geographic Concentration: Geographic concentration in the mortgage portfolio, such as California (12% of primary RIF) and the Phoenix, AZ MSA (3% of primary RIF), increases exposure to localized economic downturns and natural disasters. Capacity Constraints: The delegated underwriting program, which accounted for 73% of NIW by loan count in 2025, carries the risk of unanticipated claims if customers fail to adhere to guidelines. Failures by servicers to maintain appropriate servicing standards or disruptions to their businesses could also increase losses.

Financial & Regulatory Risks

Market & Financial Risks: Ineffective management of the investment portfolio, including unexpected losses or improper structuring to meet future liabilities, could impact operations. Loss reserves, based on management's estimates of claim rates and sizes, are subject to inherent uncertainties and may materially differ from actual claim payments. The premiums charged may not adequately compensate for the risks and costs of coverage. Foreign Exchange: Foreign currency translation is a component of accumulated other comprehensive income (loss), indicating exposure, though specific risk discussion is not provided. Credit & Liquidity: The Company may be unable to maintain or increase required capital in a timely manner, including through improved business performance, Credit Risk Transfer (CRT) transactions, or securities offerings. CRT transactions may not always be available, affordable, or adequate to protect against losses. Adverse rating agency actions could lead to loss of business and negatively affect financial condition. Regulatory & Compliance Risks: The business is extensively regulated, and changes in regulation (e.g., PMIERs, Basel III, Dodd-Frank Act, state insurance laws) could reduce profitability, limit growth, or impact eligibility to write new insurance. Inability to maintain sufficient regulatory capital (e.g., Risk-to-Capital ratio, PMIERs Available Assets) could result in business restrictions or impact financial strength ratings. Data Privacy: The Company collects, processes, stores, shares, and uses consumer information. Actual or perceived failures to protect this data or respect user privacy could damage reputation, deter lenders, and result in significant liabilities, fines, or regulatory actions.

Geopolitical & External Risks

Geopolitical Exposure: The U.S. economy faces uncertainty from geopolitical tensions, international trade, and escalating tariffs, which could impact housing markets and business. The occurrence of natural or man-made disasters or public health emergencies (including those exacerbated by climate change) could disrupt operations, increase delinquency rates, and adversely affect investment portfolio values. Trade Relations: International trade and escalating tariffs are noted as macroeconomic concerns impacting the U.S. economy. Sanctions & Export Controls: Not explicitly detailed as a specific risk, but trade restrictions are mentioned in the broader regulatory context.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: Enact Holdings, Inc. invests in technology to drive operational excellence, enhance customer experience, and support business objectives. Key areas include a proprietary risk modeling platform for evaluating returns and volatility under various economic scenarios, and a proprietary pricing platform for flexible, granular, and analytical risk selection and pricing. The Company also focuses on artificial intelligence and machine learning for risk and portfolio management. Innovation Pipeline: The Company is continuously upgrading and enhancing its systems and technology to expand capabilities, improve productivity, and enhance customer experience. This includes advancements in policy administration, billing, delinquency and claims processes, speed and efficiency of pricing and auto-decisioning, and optimal integration capabilities with customer loan origination and mortgage insurance ordering systems.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly mentioned in the filing.
• Licensing Programs: Not explicitly mentioned in the filing.
• IP Litigation: Not explicitly mentioned in the filing.

Technology Partnerships: Enact Holdings, Inc. maintains long-standing relationships with leading mortgage industry technology platforms and service providers. A dedicated technology integration team enables rapid customization of loan delivery solutions for customers.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company emphasizes managing key employee succession and retention, including senior management, through succession plans and long-term compensation programs. Board Composition: The Board of Directors includes an Independent Capital Committee, composed entirely of independent directors, responsible for approving dividends and other capital transactions. Genworth Financial, Inc., as a beneficial owner of over 50% of common stock, retains the right to nominate a majority of the Company's directors.

Human Capital Strategy

Workforce Composition:

• Total Employees: As of December 31, 2025, Enact Holdings, Inc. had 419 full-time employees, all based in the United States.
• Geographic Distribution: 51% of employees work in the Raleigh, North Carolina office, while the remaining 49% are field-based, primarily in sales and underwriting roles.
• Skill Mix: The Company seeks key employees with expertise in actuarial, finance, legal, investment, risk, compliance, and information technology, among other professional areas.

Talent Management: Acquisition & Retention: Enact Holdings, Inc. focuses on attracting and retaining talent through comprehensive benefits and compensation packages, including salary, incentive bonuses, and long-term incentives designed to align employee and stockholder interests. Employee benefits include life and health insurance, paid time off, parental leave, childcare subsidies, retirement savings plans, financial planning services, an Employee Assistance Program, and a fitness reimbursement program. Diversity & Development: The Company offers professional development and career enrichment opportunities, including leadership training, professional skills development, and a mentor program. An employee-led council promotes an inclusive culture through company-wide events and education. Enact Holdings, Inc. also champions civic engagement through paid volunteer time, event sponsorships, and charitable gift matching.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: Enact Holdings, Inc. expresses a commitment to environmental sustainability. Supply Chain Sustainability: Not explicitly detailed in the filing.

Social Impact Initiatives:

• Community Investment: The Company supports civic engagement through paid employee volunteer time, event sponsorships, employee-directed charitable gifts with a 100% company match, and the Enact Foundation.
• Product Impact: The Company's mission to help people buy and keep their homes, and its role in expanding financing access for first-time home buyers, highlights its social benefit.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Purchase mortgage origination volumes typically increase in late spring and peak during summer, leading to higher new insurance written (NIW) in the second and third quarters. Refinancing volumes are primarily influenced by interest rates, not seasonal trends. Delinquency performance is generally more favorable in the first and second quarters, resulting in lower losses compared to the third and fourth quarters.
• Economic Sensitivity: Delinquency incidence is affected by factors such as housing price appreciation/depreciation, unemployment, borrower income levels, interest rates, creditworthiness, and macroeconomic conditions. A deterioration in economic conditions or a decline in home prices can adversely affect loss experience.
• Industry Cycles: The Company's proprietary risk modeling platform is sensitive to economic cycles and current housing market conditions, informing its evaluation of returns and volatility.

Planning & Forecasting: Enact Holdings, Inc. proactively manages exposures by setting and annually reviewing risk appetite, limits, and tolerances. Its senior management risk committee, chaired by the Chief Risk Officer, regularly reviews the risk profile, top risks, and emerging risks.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations: Enact Holdings, Inc.'s U.S. insurance operations are extensively regulated by state insurance laws, with the North Carolina Department of Insurance (NCDOI) serving as the lead regulator for its North Carolina-domiciled insurers. Mortgage guaranty insurance premium rates and policy forms are subject to state regulation. Mortgage guaranty insurers are generally limited to writing only mortgage guaranty insurance. While not subject to NAIC risk-based capital (RBC) requirements, certain states impose a risk-to-capital (RTC) ratio limit of 25:1. The Company also complies with the NAIC's Risk Management and Own Risk and Solvency Assessment Model Act (ORSA Model Act) and submits an annual group capital calculation (GCC) filing. International Compliance: Enact Re Ltd., the Bermuda-domiciled insurer, is subject to Bermuda law and regulated by the Bermuda Monetary Authority (BMA), adhering to Bermudian statutory accounting. PMIERs: As of December 31, 2025, Enact Holdings, Inc. met the Private Mortgage Insurer Eligibility Requirements (PMIERs) mandated by the GSEs, holding $5,015 million in available assets against $3,096 million in net required assets, resulting in a sufficiency ratio of 162% ($1,919 million above requirements). Updated PMIERs requirements, differentiating bonds by credit quality and liquidity and establishing limits for mortgage-backed assets, are phasing in between March 31, 2025, and September 30, 2026. Dodd-Frank Act: The Dodd-Frank Act impacts the Company indirectly through regulations on mortgage lenders (e.g., ability-to-repay requirements, Qualified Mortgage rules) and securitization risk retention provisions (Qualified Residential Mortgage rules). Basel III: U.S. federal banking regulators confirmed the role of mortgage insurance in prudential bank regulation for high loan-to-value mortgages. The proposed Basel III Endgame rule, which initially would have eliminated the 50% risk-based capital benefit for high-LTV portfolio mortgages with private mortgage insurance for large banking organizations, has been withdrawn and will be re-proposed with significant revisions.

Trade & Export Controls: The Company acknowledges macroeconomic concerns related to international trade and escalating tariffs. Legal Proceedings: Enact Holdings, Inc. is not subject to any pending material legal proceedings.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: The effective tax rate was 21.5% in 2025 and 21.6% in 2024, consistent with the U.S. federal corporate income tax rate.
• Geographic Tax Planning: Foreign income, primarily from Enact Re Ltd. (Bermuda-based subsidiary), is subject to U.S. federal income tax.
• Tax Reform Impact: The One Big Beautiful Bill Act (OBBBA) and the Bermuda Corporate Income Tax Act of 2023 (CIT), both effective January 1, 2025, did not have a material impact on the Company's financial position or results of operations for 2025.
• Consolidated Group: Enact Holdings, Inc. is a member of the Genworth Financial, Inc. consolidated group for U.S. federal income tax purposes and is jointly and severally liable for the group's federal income taxes. A tax sharing agreement with Genworth Financial, Inc. governs intercompany tax balances.

Insurance & Risk Transfer

Risk Management Framework: Enact Holdings, Inc. employs a robust risk management framework, including a Credit Risk Transfer (CRT) program, to mitigate future loss volatility and drive efficient capital management. This program is designed to protect future business performance and stockholder capital under stress scenarios by transferring risk from the balance sheet to highly-rated counterparties or investors through collateralized transactions. The CRT program also provides capital relief under PMIERs and state insurance capital requirements.

Insurance Coverage: The CRT program distributes risk through traditional reinsurance (excess-of-loss and quota share agreements) and insurance-linked notes (ILNs) issued via fully collateralized special purpose reinsurance vehicles (Triangle Re Entities).

• Excess-of-Loss (XOL) Reinsurance: These transactions cover a subset of loans in a given book year, with the Company retaining the first layer of aggregate loss exposure. XOL treaties typically have terms of ten years or more and provide unilateral commutation rights subject to performance triggers.
• Quota Share Reinsurance: Under these agreements, Enact Mortgage Insurance Corporation cedes a percentage of premiums earned, claims, and claims expenses on eligible policies in exchange for a ceding commission and a profit commission.
• Reinsurer Quality: Traditional reinsurance coverage is provided by a panel of partners rated A- or better by S&P or A.M. Best, or A3 or better by Moody’s. These reinsurers are contractually required to collateralize 20% to 30% of reinsurance exposures consistent with PMIERs.

Risk Transfer Mechanisms: The Company selects CRT transaction types and structures based on factors such as capacity, cost, flexibility, sustainability, and diversification. ILNs are fully collateralized by assets deposited in reinsurance trusts for the Company's benefit.