Enact is the pure-play private mortgage insurer that Genworth spun out in 2021 - a company that writes and assumes residential mortgage guaranty insurance across the United States through its principal subsidiary, Enact Mortgage Insurance Corporation, operating under a single segment since 1981. The company sits today in the middle of an unusually clean setup for an insurer: a credit book producing a 14% loss ratio, a PMIERs sufficiency cushion of roughly $1.9 billion, and a management team choosing, quarter after quarter, to hand the surplus back. The second quarter was the loudest expression of that choice yet. Enact raised its quarterly dividend 14% to $0.24, repurchased about $93 million of stock in the quarter and another $30 million through July, hiked full-year capital-return guidance to between $550 million and $600 million, and watched its largest insurance subsidiary upstream a $150 million dividend to make it all possible. On a ~$6.8 billion market cap, that guidance approaches 9% of market value returned in a single year.
But there is a second, quieter line running through the quarter, and it is the one the payout increase does not answer. Persistency - the share of the in-force book that stays put instead of lapsing into refinance or cancellation - slipped to 80%, down two points from a year ago, and net premiums earned went flat at $245 million. Roughly 12% of the mortgage portfolio sits at least 50 basis points above June's average mortgage rate of 6.5%, the pipeline of loans most exposed to a refi reset. Growth in this quarter came from new insurance written of $15.2 billion, up 15%, not from the compounding of the existing book. The investor question is straightforward: does the payout machine keep running because credit stays benign, or does a rolling in-force book force the company to keep buying growth with new business that carries more severity risk, even as the cheap legacy layers slip away? The answer shows up in persistency, loss ratio, and the flat premium line - and the next reports will read them.