MGIC Investment Corporation (MTG) Business Profile

What it does

MGIC Investment Corporation is a holding company that provides private mortgage insurance, mortgage credit risk management solutions and related services through subsidiaries. Its principal insurance subsidiary is Mortgage Guaranty Insurance Corporation, known as MGIC. The corporation was organized in 1984, is headquartered in Milwaukee, Wisconsin, and is led by Chief Executive Officer Timothy Mattke.

Mortgage insurance protects a lender or other insured institution against part of the loss if a homeowner defaults. MGIC generally insures individual first mortgages on owner-occupied homes, including condominiums. It can also insure loans on second homes and investment properties. Coverage typically applies to a percentage of the unpaid loan balance, delinquent interest and certain expenses associated with a default and foreclosure or sale.

Lenders are MGIC’s customers and generally select the mortgage insurer. Insurance can help them make low-down-payment loans and sell them to Fannie Mae or Freddie Mac, the government-sponsored enterprises, or GSEs. Those enterprises generally require credit enhancement before buying a low-down-payment mortgage; private mortgage insurance is one way to meet that requirement.

MGIC also participates in credit risk transfer programs through an insurance subsidiary. These arrangements cover portions of the credit risk on pools of mortgages acquired by the GSEs. The company uses reinsurance to transfer some of its own mortgage credit risk to other insurers.

How it makes money

MGIC earns premiums for taking on mortgage default risk. A borrower or lender can pay the premium: most of MGIC’s primary insurance in force is borrower-paid. Under monthly plans, a payment buys one month of coverage; annual plans are paid in advance and renewed annually, while a single-premium plan provides coverage for a specified term exceeding twelve months. The monthly plan represented approximately 97% of new insurance written in 2025.

Premium rates vary with the coverage percentage and characteristics associated with the risk of a claim. These include the loan-to-value ratio, borrower credit score and debt-to-income ratio, property location and whether the property is a primary residence. MGIC generally charges more for a higher coverage percentage, although it cannot be certain that the higher rate adequately reflects the added risk.

Monthly and annual policies are renewable at the insured lender’s option at the rate fixed when the loan was initially insured. Coverage can end when a mortgage is repaid or refinanced, or when cancellation requirements are met. MGIC generally cannot terminate coverage itself, although non-payment, certain material misrepresentations and fraud can give it grounds to do so, subject to restrictions.

MGIC pays claims when covered loans default, and it purchases reinsurance that can reimburse it for specified losses. It also earns investment income on its investments.

In 2025, total revenue was $1.2 billion and net income was $738 million; in the third quarter of 2026, net income was $175 million and investment income was $61 million. The company’s third-quarter loss ratio was 10%, benefiting from $34 million of favorable loss reserve development as it re-estimated losses on prior delinquencies.

Customers and how it sells

MGIC’s customers are mortgage originators, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers and other lenders. These originators have historically determined where mortgage insurance is placed. A lender must apply for and receive a mortgage guaranty master policy before obtaining primary insurance from MGIC.

The company’s largest customer accounted for approximately 11% of direct earned premiums in 2025. Premium rates, underwriting requirements and claims-paying practices can affect relationships with customers. Borrowers may pay for the insurance, but the insured institution receives protection against covered losses.

MGIC employees sell insurance throughout the United States, Puerto Rico and Guam. At December 31, 2025, its principal mortgage insurance subsidiary was licensed in all 50 states, the District of Columbia, Puerto Rico and Guam. It wrote new insurance in each of those jurisdictions during 2025.

Fannie Mae and Freddie Mac are major purchasers of the mortgages underlying private mortgage insurance, and a substantial majority of MGIC’s new insurance written is for loans purchased by them. Their requirements affect which loans can be insured and the terms of coverage. MGIC also insures loans that are not sold to the GSEs; for those loans, the lender selects the coverage percentage from the options MGIC offers.

Suppliers and costs

MGIC’s business does not involve manufacturing. Its costs include claims and loss adjustment expenses, reinsurance and the expenses of underwriting and operating the business. It had 542 employees in FY2025. Underwriting and other expenses were $45 million in the third quarter of 2026, compared with $50 million in the third quarter of 2025.

Reinsurance is an important part of managing risk and capital. MGIC transfers portions of its risk under quota-share and excess-of-loss agreements; reinsurance can reduce the assets it must hold under GSE eligibility requirements. MGIC remains responsible for paying policyholder claims even if a reinsurer fails to reimburse it.

The company agreed to a 40% quota-share transaction covering eligible 2028 new insurance written and a separate 20% quota-share transaction covering eligible 2029 new insurance written. It also amended agreements covering 2023 new insurance written, which it expects will reduce their ongoing cost by approximately 35% beginning in 2027.

Loss reserves depend on estimates of how many delinquent loans will result in claims and the amount paid on those claims. MGIC establishes reserves for delinquent loans rather than for all loans it insures, so losses on currently performing loans may affect results as delinquencies emerge.

Competitive position

MGIC competes with other private mortgage insurers for business placed by lenders. It competes on premium rates, underwriting requirements, financial strength, customer relationships, reputation and the use of technology in delivering and servicing insurance. The company does not name the other private mortgage insurers with which it competes.

Government-backed programs also compete for low-down-payment mortgage business, principally those sponsored by the Federal Housing Administration and the Department of Veterans Affairs. Other alternatives include lenders retaining mortgages and accepting the credit risk themselves, credit risk transfers, and combining a first mortgage with a second loan rather than buying private mortgage insurance. MGIC participates through an affiliate in some GSE credit risk transfer programs that it also regards as competing with traditional mortgage insurance.

Pricing is a competitive factor: MGIC says an increasing number of customers prioritize the lowest premium available for a particular loan. Insurers have moved toward risk-based pricing systems and customized rate plans.

Our reading: MGIC’s customer relationships and ability to serve lenders across its licensed jurisdictions support its competitive position, but their strength as a moat is limited by customers’ ability to compare prices and underwriting terms. (item1, item7) Our reading: GSE eligibility and capital requirements create barriers to participation, but they also apply constraints to MGIC rather than protecting it from competition among eligible insurers and government programs. (item1, item1a)

Growth opportunities

MGIC’s opportunities to write insurance depend on mortgage originations, the proportion of those loans using private mortgage insurance and its share of that business. Home sales, interest rates and refinancing activity affect originations, while government insurance programs and other credit enhancements affect demand for private coverage.

The company wrote $60.2 billion of new primary insurance in 2025, compared with $55.7 billion in 2024. It wrote $17 billion in the third quarter of 2026, an increase of 3.6% from the third quarter of 2025. Insurance in force ended the third quarter of 2026 at $307 billion, up 2.2% from a year earlier. Market conditions have constrained growth in insurance in force in recent years.

Growth in insurance in force also depends on how long existing coverage stays in place. Mortgages can be repaid or refinanced, and eligible borrowers can request cancellation. At the end of the third quarter of 2026, annual persistency was 83%, flat compared with the prior quarter.

MGIC’s stated strategies include differentiating its customer experience, advancing digital and analytical capabilities, and acquiring, managing and distributing mortgage credit risk and related capital. The company also provides insurance and reinsurance on mortgage pools through GSE credit risk transfer programs. Its preference is to grow the core business organically and reinvest capital in it, although the company says market conditions have not supported that approach in recent years.

Structural risks

• Mortgage credit: Recession, unemployment, lower household income and declining home prices can increase delinquencies and claims. MGIC expects a slow increase in its delinquency rate as its book becomes more concentrated in newer loan vintages.
• GSE dependence: A substantial majority of new insurance covers loans purchased by Fannie Mae and Freddie Mac. Changes to their coverage, pricing, underwriting or cancellation practices, or to their structure, could reduce revenue or increase losses.
• Capital and eligibility: MGIC must meet GSE and state requirements to keep writing business. Rising delinquencies, changes in eligibility rules or reduced credit for reinsurance could increase required capital; loss of GSE eligibility would significantly reduce new business.
• Reinsurance: Coverage may become more costly or unavailable, and a reinsurer may be unable to pay amounts owed. MGIC remains liable to policyholders for covered claims.
• Reserves and cancellations: Actual claims may differ substantially from estimates, and losses on currently performing loans are generally not reserved until delinquencies arise. Repayments, refinancing or changes in cancellation practices can reduce insurance in force and future premiums.

Bottom line

Our reading

Our reading: MGIC is a mortgage credit insurer whose recurring premiums depend on lenders placing business with it and policies remaining in force. (item1, item7) Its reinsurance and capital resources help it manage exposure, but claims, eligibility requirements and demand for insurance remain tied to housing credit conditions and GSE policies. (item1, item1a)