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NMI Holdings (NMIH) Q2 Earnings Beat, Revenues Rise Y/Y

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NMI Holdings NMIH reported second-quarter 2020 operating net income per share of 40 cents, which beat the Zacks Consensus Estimate by 25%. The bottom line declined 32.2% year over year.

The quarterly results reflect the impact of additional claims and claim expenses incurred on higher default experience in connection with the COVID-19 pandemic.

Operational Update

NMI Holdings recorded total operating revenues of $107 million, which increased 17.5% year over year on higher net premiums earned (up 18.9%) and other revenues (up nearly six fold). Revenues beat the Zacks Consensus Estimate by 0.8%.

Net investment income dropped 7.3% year over year to $7 million.

Primary insurance-in-force increased 21% to $98.9 billion.

New insurance written was $13.1 billion, up 8% year over year.

Net underwriting and operating expenses totaled $30.4 million, down 5.6% year over year. Insurance claims and claim expenses were $34.3 million, marking a nearly 12-fold increase and reflecting higher default experience attributable to the COVID-19 pandemic

Loss ratio was 34.7%, which deteriorated 3120 basis points year over year.

NMI Holdings Inc Price, Consensus and EPS Surprise

NMI Holdings Inc Price, Consensus and EPS Surprise
NMI Holdings Inc Price, Consensus and EPS Surprise

NMI Holdings Inc price-consensus-eps-surprise-chart | NMI Holdings Inc Quote

Financial Update

Book value per share, a measure of net worth, grew about 24% to $14.82 as of Jun 30, 2020 from year ago quarter end.

NMI Holdings had $1.9 billion in cash and investments, up 76% year over year.

Annualized adjusted return on equity was 10.7%

Total PMIERs available assets were $1.7 billion and net risk-based required assets totaled $1.0 billion at quarter end

Zacks Rank

NMI Holdings currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation PGR, Cincinnati Financial CINF and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings.

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