Radian and MGIC Recapitalion puts PMI Newcomers in Jeopardy
New entrants to the PMI industry are now in jeopardy of not succeeding.
In the last few years two startups Essent Guaranty and nmi, and one existing company CMG; have announced plans to expand in the private mortgage insurance industry. They counted on the existing companies, Radian and MGIC failing like the PMI companies did after the "Great Depression" but, things have changed fast.
Now, both MGIC and Radian have recapitalized, raising doubt now about the success of the upstarts. MGIC and Radian both have the operating platforms and sales network to defeat new challengers.
If I was a betting person, I would put my money on MGIC and Radian, along with AIG's United Guaranty to wipe the competition. They have the economie of scale in operations to be efficient and profitable.
It will take years for the startups to be a force in PMI industry. Essent Guaranty started in 2010 and, they only have a 2% marketshare.
Rick, PMI sold some it's assets to the startup, NMI. It filed BK and has been in liquidation and runoff, paying insured less than 60% of the owe amount. The regulatory authority in Arizona won't let it restart after that tpye of losses to insured.
I am afraid PMI is finished as a viable company. Once all the bills are paid, it's over for PMI.