Radian Group is no longer the single-product mortgage insurer the ticker still implies. Closing the Inigo purchase turned a Wayne holding company into a two-engine insurer that now reports Mortgage and Specialty as separate segments. That is the entire investment debate. The market still prices the equity as a mid-cycle private mortgage insurer. Management is asking investors to underwrite a London specialty franchise that has never reported a full year inside this capital structure.
The economic tension sits in the mix, not the headline growth. Mortgage still produced almost all of the adjusted pretax operating income even as Specialty supplied more than half of net premiums earned. That gap is the difference between a high-return seasoned mortgage book and a newly acquired Lloyd's platform that reserved for conflict exposure in the same period. Purchase accounting and related charges totaled $39 million. Adjusted operating earnings per share still edged higher. The print was $1.14.
The mortgage engine is doing what a mature private mortgage insurer is supposed to do. Primary insurance in force set a record at $284 billion, persistency held in the low eighties, and the default rate eased from the prior quarter. Radian Guaranty sent $200 million upstream and lifted the full-year ordinary-dividend plan to at least $650 million. The open question is whether Specialty can earn through a softening rate cycle without consuming the capital the mortgage franchise is still generating.