Enact Reports Third Quarter 2026 Results; Announces $0.24 Quarterly Dividend

Enact’s Q3 profit fell, but capital returns and ratings upgrades signal ongoing financial strength.

What the company is saying

Enact Holdings, Inc. presents its third quarter 2026 results as evidence of business resilience and disciplined risk management. President and CEO Rohit Gupta emphasizes the company’s ability to deliver sustainable value and facilitate homeownership, highlighting execution against strategic priorities. The narrative stresses continued capital returns, with a $33 million dividend paid and $175 million in share repurchases during and after the quarter, and a new $0.24 per share dividend declared for December 2026. The company points to a recently signed quota share reinsurance agreement for the 2028 book year and notes that 95% of NIW was monthly premium policies, with 93% purchase originations. Management attributes the 7% sequential decline in new insurance written to lower refinance activity, and explains that lower net premiums earned are primarily due to higher ceded premiums from quota share reinsurance. The announcement also highlights AM Best’s upgrades of insurance financial strength and issuer ratings, presenting this as external validation of stability. The tone is measured, with forward-looking statements about a targeted $600 million capital return in 2026 caveated by dependency on business performance, markets, and regulatory approval.

What the data suggests

Net income declined to $159 million ($1.15 per diluted share) from $175 million last quarter and $163 million a year ago, while adjusted operating income dropped to $164 million ($1.19 per share) from $177 million and $166 million, respectively. New insurance written was $14 billion, down 7% sequentially and flat year-over-year, with persistency at 81%. Primary insurance in-force was stable at $275 billion, up 1% year-over-year. Net premiums earned fell to $242 million, reflecting higher ceded premiums from reinsurance, partially offset by growth in adjacencies and IIF. Losses incurred rose to $47 million, with the loss ratio increasing to 20% from 14% last quarter and 15% a year ago. Operating expenses improved to $50 million, with the expense ratio steady at 21%. Net investment income increased to $74 million, but net investment losses widened to $(6) million. Return on equity fell to 12.0%, and adjusted operating ROE to 12.4%. PMIERs sufficiency declined to 158% ($1.8 billion above requirements), mainly due to a $200 million EMICO dividend to EHI. The company ended the quarter with $286 million in cash and $427 million in invested assets, up $52 million. Share repurchases totaled $175 million during and after the quarter, leaving $200 million under the authorization. The company’s capital and liquidity position remains strong, but profitability and capital ratios are trending modestly downward.

Analysis

The announcement is a standard quarterly financial update with a neutral tone and no exaggerated language. Nearly all key claims are realised and supported by detailed numerical disclosures, including net income, adjusted operating income, loss ratios, capital returns, and capital sufficiency. The only forward-looking claims are the anticipated total 2026 capital return (which is caveated as subject to business performance, market conditions, and regulatory approval) and the reinsurance agreement for the 2028 book year, which is a factual disclosure of a signed agreement rather than an aspirational projection. There is no evidence of narrative inflation or overstatement; the language is proportionate to the results, which show modest deterioration in profitability and capital ratios. Capital outlays (dividends, share repurchases) are matched by immediate or near-term shareholder returns, not long-dated uncertain benefits. The gap between narrative and evidence is minimal.

Risk flags

• ●Profitability is under pressure, with net income and adjusted operating income both declining sequentially and year-over-year, and the loss ratio rising to 20%. This trend, if sustained, could limit future capital return capacity.
• ●Capital sufficiency, as measured by PMIERs, dropped to 158% ($1.8 billion above requirements) from 161% ($1.9 billion) last quarter, primarily due to the $200 million EMICO dividend. While still robust, continued capital outflows could erode this buffer.
• ●New insurance written fell 7% sequentially, driven by lower refinance activity, and remained flat year-over-year. Persistent weakness in origination volumes could weigh on future revenue and earnings.
• ●The anticipated $600 million capital return for 2026 is subject to business performance, market conditions, and regulatory approval, introducing uncertainty around the final amount and timing of distributions.
• ●While AM Best’s ratings upgrades are positive, the company’s increased reliance on quota share reinsurance (ceding 35% of a portion of expected 2028 NIW) could impact future earnings quality and risk profile, depending on execution and market conditions.

Bottom line

Enact’s Q3 2026 results show a modest deterioration in profitability and capital ratios, with net income, adjusted operating income, and return on equity all declining versus both the prior quarter and prior year. Despite these headwinds, the company is maintaining aggressive capital returns, having paid a $33 million dividend, repurchased $175 million in shares, and declared another $0.24 per share dividend for December. Liquidity and capital buffers remain strong, though PMIERs sufficiency is trending down due to internal capital movements. The company’s business mix is shifting further toward purchase originations and monthly premium policies, but new insurance written is flat year-over-year and down sequentially. The reinsurance agreement for 2028 and AM Best ratings upgrades provide some strategic and reputational support, but future capital returns are not guaranteed and depend on operational performance and external factors. Investors should focus on the sustainability of earnings, the trajectory of origination volumes, and the company’s ability to preserve capital strength while continuing large shareholder distributions. The most important takeaway is that while Enact remains financially solid, profitability pressures and capital outflows bear close monitoring.

Announcement summary

(NASDAQ:ACT) Enact Holdings, Inc. reported financial results for the third quarter of 2026. Net income for the quarter was $159 million, or $1.15 per diluted share, compared to $175 million, or $1.25 per diluted share, in the second quarter of 2026 and $163 million, or $1.10 per diluted share, in the third quarter of 2025. Adjusted operating income was $164 million, or $1.19 per diluted share, versus $177 million, or $1.26 per diluted share, in the prior quarter and $166 million, or $1.12 per diluted share, in the prior year period. New insurance written (NIW) totaled $14 billion, down 7% sequentially due to lower refinance activity and flat year-over-year, with 95% monthly premium policies and 93% purchase originations. The primary persistency rate was 81%, up from 80% in the previous quarter and down from 83% a year ago. Approximately 89% of loans in the portfolio carry mortgage rates below 7%. Primary insurance in-force (IIF) was $275 billion, nearly unchanged from $274 billion in the prior quarter and up from $272 billion a year ago. Net premiums earned were $242 million, down from $245 million in both the prior quarter and prior year, primarily due to higher ceded premiums from quota share reinsurance, partially offset by premium growth in adjacencies and IIF growth. Losses incurred were $47 million with a loss ratio of 20%, compared to $33 million and 14% in the prior quarter and $36 million and 15% in the prior year. The quarter included a $37 million reserve release, compared to $37 million in the prior quarter and $45 million a year ago. Operating expenses were $50 million with an expense ratio of 21%, compared to $52 million and 21% in the prior quarter and $53 million and 22% in the prior year, driven by favorable ceding commissions and expense management. Operating expense guidance, excluding reorganization costs, was adjusted to the lower end of the $205 million to $210 million range. Net investment income was $74 million, up from $73 million in the prior quarter and $69 million a year ago. Net investment losses were $(6) million, compared to $(2) million in the prior quarter and $(3) million a year ago. Annualized return on equity was 12.0% and annualized adjusted operating return on equity was 12.4%. During the quarter, Enact announced a quota share reinsurance agreement with a panel of highly-rated reinsurers to cede approximately 35% of expected new insurance written for the 2028 book year. The company paid a $33 million, or $0.24 per share, dividend in the quarter. EMICO completed a $200 million dividend to EHI, primarily to support capital returns and financial flexibility. Enact held $286 million in cash and cash equivalents and $427 million in invested assets as of September 30, 2026, with combined cash and invested assets up $52 million from the prior quarter. AM Best upgraded the insurance financial strength rating for EMICO and EMIC-NC to A from A-, and the long-term issuer rating for EHI to bbb from bbb-, with stable outlooks. PMIERs sufficiency was 158% and $1.8 billion above requirements, compared to 161% and $1.9 billion in the prior quarter and 162% and $1.9 billion a year ago, with the decrease primarily due to the EMICO dividend to EHI. The company repurchased approximately 2.4 million shares at an average price of $48.19 for a total of $118 million in the quarter, and through November 3, 2026, repurchased an additional 1.3 million shares at an average price of $45.68 for $57 million. Approximately $200 million remains under the $500 million repurchase authorization. The Board declared a $0.24 per common share dividend, payable December 17, 2026, to shareholders of record on November 25, 2026. Enact anticipates a total 2026 capital return of approximately $600 million, with the final amount and form dependent on business performance, market conditions, and regulatory approval.

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