NMI HOLDINGS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) – Marketscreener.com

Overview
Conditions and Trends Affecting Our Business
Macroeconomic Developments
Key Factors Affecting Our Results
New Insurance Written, Insurance-In-Force and Risk-In-Force
Net Premiums Written and Net Premiums Earned
•premium rates and the mix of premium payment type, which are either single, monthly or annual premiums, as described below;
•cession of premiums under third-party reinsurance arrangements.
Effect of reinsurance on our results
Excess-of-loss reinsurance
Insurance-linked notes
The following table presents the inception date, covered production period, current reinsurance coverage amount, current first layer retained aggregate loss and detail on the level of overcollateralization under each outstanding ILN Transaction. Current amounts are presented as of March 31, 2023.
ILN 2020-2 ILN 2021-1 ILN 2021-2 ILN ($ values in thousands)
Transaction Transaction Transaction Transaction Inception date
30, 2019 October 29, 2020 April 27, 2021 October 26, 2021 Covered production
6/1/2018 – 4/1/2020 – 10/1/2020 – 4/1/2021 –
6/30/2019 9/30/2020 (1) 3/31/2021 (2) 9/30/2021 (3)
929,536 $ 3,236,685 $ 6,591,872 $ 6,860,558
313,226 $ 206,188 $ 446,284 $ 509,763 Subordinated coverage (4)
191,044 $ 44,509 $ 74,062 $ 45,241
Each of the third-party reinsurance providers that is party to the XOL Transactions has an insurer financial strength rating of A- or better by S&P, A.M. Best or both.
The following table presents the inception date, covered production period, initial and current reinsurance coverage
Quota share reinsurance
The following table presents net premiums written and earned for the periods indicated:
Portfolio Statistics
As of and for the three months ended
10,719 $ 17,239 $ 16,611 $ 14,165 Percentage of monthly premium
2,797 $ 4,616 $ 4,386 $ 3,721 Insurance-in-force (1)
183,968 $ 179,173 $ 168,639 $ 158,877 Percentage of monthly premium
47,648 $ 46,259 $ 43,260 $ 40,522 Policies in force (count) (1)
Average loan size ($ value in thousands) (1) $ 311 $
310 $ 309 $ 306 $ 301 Coverage percentage (2)
$ 158,877
The tables below present our total primary IIF and RIF by FICO and LTV, and total primary RIF by loan type as of the dates indicated.
Geographic Dispersion
Insurance Claims and Claim Expenses
The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions for the periods indicated:
31, 2022
19
402
(1) Count includes seven and six claims settled without payment during the three months ended March 31, 2023 and 2022, respectively. (2) Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment.
(1) Defined as the gross reserve per insured loan in default. (2) Amount includes claims adjustment expenses.
The decrease in the risk-based required asset amount between the dates presented was primarily due to an increase in the risk ceded under our third-party reinsurance agreements, partially offset by the growth in our gross RIF and aggregate gross-risk based required asset amount.
Competition
LIBOR Transition
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