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Reinsurance | 3 Months Ended
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Mar. 31, 2026
Reinsurance Disclosures [Abstract] |
Reinsurance | Reinsurance We have in place reinsurance agreements executed under quota share reinsurance (“QSR”) Transactions and excess-of-loss (“XOL”) Transactions as discussed below. The effect of all of our reinsurance transactions on our consolidated statement of operations is shown in table 7.1 below.
Reinsurance |  |  |  |
Table | 7.1 |  |  |  |  |  |  |  |
|  |  | Three Months Ended March 31, |  |
(In thousands) |  | 2026 |  | 2025 |  |  |  |
Premiums earned: |  |  |  |  |  |  |  |
Direct |  | $ | 286,927 |  |  | $ | 284,821 |  |  |  |  |
Assumed |  | 3,980 |  |  | 3,561 |  |  |  |  |
Ceded: |  |  |  |  |  |  |  |
Ceded - quota share reinsurance (1) |  | (37,769) |  |  | (29,943) |  |  |  |  |
Ceded - excess-of-loss reinsurance |  | (17,775) |  |  | (14,720) |  |  |  |  |
Total ceded |  | (55,544) |  |  | (44,663) |  |  |  |  |
Net premiums earned |  | $ | 235,363 |  |  | $ | 243,719 |  |  |  |  |
Losses incurred: |  |  |  |  |  |  |  |
Direct |  | $ | 45,270 |  |  | $ | 16,017 |  |  |  |  |
Assumed |  | (2) |  |  | 5 |  |  |  |  |
Ceded - quota share reinsurance |  | (12,026) |  |  | (6,431) |  |  |  |  |
Losses incurred, net |  | $ | 33,242 |  |  | $ | 9,591 |  |  |  |  |
Other Reinsurance Impacts: |  |  |  |  |  |  |  |
Profit commission on quota share reinsurance (1) |  | $ | 29,103 |  |  | $ | 28,695 |  |  |  |  |
Ceding commission on quota share reinsurance |  | 13,374 |  |  | 11,727 |  |  |  |  |
(1)Ceded premiums earned are shown net of profit commission. Quota Share Reinsurance We have entered into QSR Transactions with panels of third-party reinsurers to cede a fixed percentage of premiums earned and received and losses incurred on insurance covered by the transactions. We receive the benefit of a ceding commission equal to 20% of premiums ceded before profit commission. We also receive the benefit of a profit commission through a reduction of premiums we cede. The profit commission varies inversely with the level of losses on a “dollar for dollar” basis and can be eliminated at annual loss ratios higher than we have experienced on our QSR Transactions. Ceded losses incurred are impacted by the delinquencies covered by our QSR Transactions, our estimates of payments that will be ultimately made on those delinquencies, and claim payments covered by our QSR Transactions. Each of our QSR Transactions typically have annual loss ratio caps of 300% and lifetime loss ratio caps of 200%. We can elect to terminate the QSR Transactions under specified scenarios without penalty upon prior written notice, including if we will receive less than 90% (80% for the Credit Union QSR Transaction) of the full credit amount under the PMIERs, full financial statement credit or full credit under applicable regulatory capital requirements for the risk ceded in any required calculation period. Under the terms of our QSR Transactions, ceded premiums, ceding commissions, profit commission, and ceded losses paid and LAE paid are settled net on a quarterly basis. The ceded premiums due, after deducting the related ceding commission and profit commission is reported within Other liabilities on the consolidated balance sheets. The reinsurance recoverable on loss reserves related to our QSR Transactions was $73.2 million as of March 31, 2026 and $65.1 million as of December 31, 2025. The reinsurance recoverable balance is secured by funds on deposit from the reinsurers (which does not include letters of credit), the minimum amount of which is based on the greater of 1) a reinsurer's funding requirements under PMIERs or 2) ceded reserves and unpaid losses. Each of the reinsurers under our QSR Transactions has an insurer financial strength rating of A- or better (or a comparable rating) by Standard and Poor's Rating Services, A.M. Best, Moody's, or a combination of the three. Table 7.2 below provides additional detail regarding our QSR Transactions in effect as of March 31, 2026.
Quota Share Reinsurance
Table | 7.2 |  |  |  |
Quota Share Contract | Covered Policy Years | Quota Share % | Annual Loss Ratio to Exhaust Profit Commission (1) | Contractual Termination Date
2020 QSR and 2021 QSR | 2021 | 14.8 | % | 69.0 | % | December 31, 2036
2021 QSR and 2022 QSR | 2021 | 11.1 | % | 69.0 | % | December 31, 2036
2021 QSR and 2022 QSR | 2022 | 13.8 | % | 67.5 | % | December 31, 2037
2022 QSR and 2023 QSR | 2022 | 14.5 | % | 67.5 | % | December 31, 2037
2022 QSR and 2023 QSR | 2023 | 15.0 | % | 62.0 | % | December 31, 2034
2023 QSR | 2023 | 10.0 | % | 58.5 | % | December 31, 2034
2024 QSR | 2024 | 30.0 | % | 56.0 | % | 'December 31, 2035
2025 QSR | 2025 | 40.0 | % | 63.0 | % | 'December 31, 2036
2026 QSR | 2026 | 40.0 | % | 62.0 | % | December 31, 2037
Credit Union QSR | 2020-2025 | 65.0 | % | 50.0 | % | December 31, 2039
2026-2030 (2) | 65.0 | % | 60.0 | % | December 31, 2044
(1)We will receive a profit commission provided the annual loss ratio on policies covered under the transaction remains below this ratio. (2)We can elect early termination of the QSR Transaction beginning on December 31, 2028, and quarterly thereafter. Table 7.3 provides additional detail regarding optional termination dates and optional reductions to our quota share percentage which can, in each case, be elected by us for a fee. Under the optional reduction to the quota share percentage, we may reduce our quota share percentage from the original percentage shown in table 7.2 to the percentage shown in table 7.3.
Quota Share Reinsurance
Table | 7.3 |  |  |
Quota Share Contract | Covered Policy Years | Optional Termination Date (1) | Optional Quota Share % Reduction Date (2) | Optional Reduced Quota Share %
2020 QSR and 2021 QSR | 2021 | December 31, 2027 | January 1, 2028 | 12.3% or 10%
2021 QSR and 2022 QSR | 2021 | December 31, 2027 | January 1, 2028 | 9.4% or 7%
2021 QSR and 2022 QSR | 2022 | June 30, 2028 | July 1, 2028 | 11.5% or 9.2%
2022 QSR and 2023 QSR | 2022 | June 30, 2028 | July 1, 2028 | 12.1% or 9.7%
2022 QSR and 2023 QSR | 2023 | June 30, 2026 | July 1, 2026 | 12.5% or 10%
2023 QSR | 2023 | June 30, 2026 | July 1, 2026 | 8% or 7%
2024 QSR | 2024 | December 31, 2027 | December 31, 2027 | 23% or 15%
2025 QSR | 2025 | December 31, 2027 | December 31, 2027 | 30% or 20%
2026 QSR | 2026 | December 31, 2028 | December 31, 2028 | 30% or 20%
(1)We can elect early termination of the QSR Transaction beginning on this date, and semi-annually thereafter. (2)We can elect to reduce the quota share percentage beginning on this date, and semi-annually thereafter. Excess of Loss Reinsurance We have XOL Transactions with panels of unaffiliated reinsurers executed through the traditional reinsurance market (“Traditional XOL Transactions”) and with unaffiliated special purpose insurers (“Home Re Transactions”). Under our XOL Transactions, we retain the first layer of aggregate losses, after which the reinsurers provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. Traditional XOL Transactions The reinsurance premiums ceded under the Traditional XOL Transactions are based off of the remaining reinsurance coverage levels. The reinsured coverage levels are secured by funds on deposit from reinsurers (which does not include letters of credit), the minimum amount of which is based on the greater of 1) a reinsurer's funding requirements under PMIERs or 2) ceded reserves and unpaid losses. Each of the reinsurers under our Traditional XOL Transactions has an insurer financial strength rating of A- or better (or a comparable rating) by Standard and Poor’s Rating Services, A.M. Best, Moody’s, or a combination of the three. We can elect to terminate our Traditional XOL Transactions under specified scenarios without penalty upon prior written notice, including if we will receive less than the full credit amount under the PMIERs, full financial statement credit or full credit under applicable regulatory capital requirements for the risk ceded in any required calculation period. Insurance Linked Notes The Home Re Entities financed the coverages by issuing mortgage insurance-linked notes (“ILNs”) to unaffiliated investors in an aggregate amount equal to the initial reinsurance coverage amounts. Each ILN is non-recourse to any assets of MGIC or affiliates. The proceeds of the ILNs, which were deposited into reinsurance trusts for the benefit of MGIC, will be the source of reinsurance claim payments to MGIC and principal repayments on the ILNs. The reinsurance premiums ceded to each Home Re Entity are composed of coverage, initial expense and supplemental premiums. The coverage premiums are generally calculated as the difference between the amount of interest payable by the Home Re Entity on the remaining reinsurance coverage levels, and the investment income collected on the collateral assets held in a reinsurance trust account and used to collateralize the Home Re Entity’s reinsurance obligation to MGIC. The amount of monthly reinsurance coverage premium ceded will fluctuate due to changes in the reference rate and changes in money market rates that affect investment income collected on the assets in the reinsurance trust. As a result, we concluded that each Home Re Transaction contains an embedded derivative that is accounted for separately as a freestanding derivative. The fair values of the derivatives at March 31, 2026 and December 31, 2025, were not material to our consolidated balance sheet and the change in fair value during the three months ended March 31, 2026 and March 31, 2025 were not material to our consolidated statements of operations. (See Note 5 - “Investments” and Note 6 - “Fair Value Measurements”.) Payment of principal on the related ILNs will be suspended and the reinsurance coverage available to MGIC under the transactions will not be reduced by such principal payments until a target level of credit enhancement is obtained or if certain thresholds or “Trigger Events” are reached, as defined in the related ILNs transaction agreement. As of March 31, 2026, there were no "Trigger Events". The following table provides a summary of our XOL Transactions that were in effect as of March 31, 2026.
Excess of Loss Reinsurance
Table 7.4a |  |  |  |
| Issue Date | Policy In Force Dates | Optional Call Date (1) | Legal Maturity
2026 Traditional XOL | January 1, 2026 | January 1, 2026 - December 31, 2026 | January 1, 2032 | 10 years
2025 Traditional XOL | June 1, 2025 | January 1, 2025 - December 31, 2025 | January 1, 2031 | 10 years
2024 Traditional XOL | April 1, 2024 | January 1, 2024 - December 31, 2024 | January 1, 2030 | 10 years
2023 Traditional XOL | April 1, 2023 | January 1, 2023 - December 29, 2023 | January 1, 2031 | 10 years
2022 Traditional XOL | April 1, 2022 | January 1, 2022 - December 30, 2022 | January 1, 2030 | 10 years
2021 Traditional XOL | December 1, 2025 | January 1, 2021 - December 31, 2021 | January 1, 2031 | 10 years
2020 Traditional XOL | March 1, 2025 | January 1, 2020 - December 31, 2020 | April 1, 2030 | 10 years
Home Re 2026-1, Ltd. | January 29, 2026 | January 1, 2022 - March 31, 2025 | January 25, 2031 | 10 years
Home Re 2023-1, Ltd. | October 23, 2023 | June 1, 2022 - August 31, 2023 | October 25, 2028 | 10 years
Home Re 2022-1, Ltd. | April 26, 2022 | May 29, 2021 - December 31, 2021 | April 25, 2028 | 12.5 years
Home Re 2021-2, Ltd. | August 3, 2021 | January 1, 2021 - May 28, 2021 | July 25, 2028 | 12.5 years
(1)We have the right to terminate the Home Re Transactions under certain circumstances, including an optional call feature that provides us the right to terminate if the outstanding principal balance of the related insurance-linked notes falls below 10% of the initial principal balance of the related insurance-linked notes, and on any payment date on or after the respective Optional Call Date. We can elect early termination of the Traditional XOL Transactions beginning on this date, and quarterly thereafter. Tables 7.4b and 7.4c provide additional information about our XOL Transactions in effect as of the dates indicated. Tables 7.4b and 7.4c exclude the 2026 Traditional XOL Transaction, which is still within its contractual fill-up period covering policies in force from January 1, 2026 through December 31, 2026. The 2026 Traditional XOL Transaction provides up to $184 million of reinsurance coverage on eligible NIW in 2026.
Table 7.4b |  | Remaining First Layer Retention
($ in thousands) | Initial First Layer Retention | March 31, 2026 | December 31, 2025
2025 Traditional XOL | $ | 95,966 |  | $ | 95,966 |  | $ | 95,966 |
2024 Traditional XOL | 125,016 |  | 123,596 |  | 124,458 |
2023 Traditional XOL | 70,578 |  | 68,299 |  | 69,060 |
2022 Traditional XOL | 82,523 |  | 76,952 |  | 78,023 |
2021 Traditional XOL | 142,291 |  | 142,291 |  | 142,291 |
2020 Traditional XOL | 68,343 |  | 68,288 |  | 68,288 |
Home Re 2026-1, Ltd. | 231,769 |  | 231,750 |  | N/A
Home Re 2023-1, Ltd. | 272,961 |  | 263,855 |  | 266,371 |
Home Re 2022-1, Ltd. | 325,589 |  | 317,741 |  | 318,906 |
Home Re 2021-2, Ltd. | 190,159 |  | 186,537 |  | 187,030 |
Table 7.4c |  |  |  | Remaining Excess of Loss Reinsurance Coverage (1)
($ in thousands) | Initial Excess of Loss Reinsurance Coverage (1) | Initial Funding Percentage (2) | Funding Percentage at 3/31/2026 (2) | March 31, 2026 | December 31, 2025
2025 Traditional XOL | $ | 151,851 |  | N/A | N/A | $ | 151,851 |  | $ | 151,851 |
2024 Traditional XOL | 187,220 |  | N/A | N/A | 178,796 |  | 187,220 |
2023 Traditional XOL | 96,942 |  | N/A | N/A | 59,066 |  | 64,217 |
2022 Traditional XOL | 142,642 |  | N/A | N/A | 97,362 |  | 100,274 |
2021 Traditional XOL | 250,000 |  | N/A | N/A | 250,000 |  | 250,000 |
2020 Traditional XOL | 250,592 |  | N/A | N/A | 250,592 |  | 250,592 |
Home Re 2026-1, Ltd. | 323,504 |  | 100 | % | 100 | % | 322,204 |  | N/A
Home Re 2023-1, Ltd. | 330,277 |  | 97 | % | 95 | % | 214,444 |  | 231,708 |
Home Re 2022-1, Ltd. | 473,575 |  | 100 | % | 100 | % | 188,763 |  | 207,641 |
Home Re 2021-2, Ltd. | 398,429 |  | 100 | % | 100 | % | 68,267 |  | 84,376 |
(1)The initial and remaining excess of loss reinsurance coverage is reduced by the applicable funding percentage. (2)The funding percentage represents the aggregate outstanding note balances divided by the aggregate ending coverage amounts. At the time the Home Re Transactions were entered into, we concluded that each Home Re Entity is a variable interest entity (“VIE”). A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make sufficient decisions relating to the entity’s operations through voting rights or do not substantively participate in gains and losses of the entity. Given that MGIC (1) does not have the unilateral power to direct the activities that most significantly affect each Home Re Entity’s economic performance and (2) does not have the obligation, outside the terms of the reinsurance agreement, to absorb losses or the right to receive benefits of each Home Re Entity that could be significant to the Home Re Entity, consolidation of the Home Re Entities is not required. We are required to disclose our maximum exposure to loss, which we consider to be an amount that we could be required to record in our statements of operations, as a result of our involvement with the VIEs under our Home Re Transactions. As of March 31, 2026, and December 31, 2025, we did not have material exposure to the VIEs as we have no investment in the VIEs and had no reinsurance claim payments due from the VIEs under our reinsurance transactions. We are unable to determine the timing or extent of claims from losses that are ceded under the reinsurance transactions. The VIE assets are deposited in reinsurance trusts for the benefit of MGIC that will be the source of reinsurance claim payments to MGIC. The purpose of the reinsurance trusts is to provide security to MGIC for the obligations of the VIEs under the reinsurance transactions. The trustee of the reinsurance trusts, a recognized provider of corporate trust services, has established segregated accounts within the reinsurance trusts for the benefit of MGIC, pursuant to the trust agreements. The trust agreements are governed by, and construed in accordance with, the laws of the State of New York. If the trustee of the reinsurance trusts failed to distribute claim payments to us as provided in the reinsurance trusts, we would incur a loss related to our losses ceded under the reinsurance transactions and deemed unrecoverable. We are also unable to determine the impact such possible failure by the trustee to perform pursuant to the reinsurance trust agreements may have on our consolidated financial statements. As a result, we are unable to quantify our maximum exposure to loss related to our involvement with the VIEs. MGIC has certain termination rights under the reinsurance transactions should its claims not be paid. Table 7.5 presents the total assets of the Home Re Entities as of March 31, 2026 and December 31, 2025.
Home Re total assets |  |  |  |
Table | 7.5 |  |  |  |
(In thousands) |  | Total VIE Assets
Home Re Entity |  | March 31, 2026 |  | December 31, 2025
Home Re 2026-1 Ltd. |  | $ | 323,504 |  |  | N/A
Home Re 2023-1 Ltd. |  | 221,144 |  |  | 237,900 |
Home Re 2022-1 Ltd. |  | 196,027 |  |  | 214,788 |
Home Re 2021-2 Ltd. |  | 74,244 |  |  | 89,865 |
The reinsurance trust agreements provide that the trust assets may generally only be invested in certain money market funds that (i) invest at least 99.5% of their total assets in cash or direct U.S. federal government obligations, such as U.S. Treasury bills, as well as other short-term securities backed by the full faith and credit of the U.S. federal government or issued by an agency of the U.S. federal government, (ii) have a principal stability fund rating of “AAAm” by S&P or a money market fund rating of “Aaamf” by Moody’s as of the Closing Date and thereafter maintain any rating with either S&P or Moody’s, and (iii) are permitted investments under the applicable credit for reinsurance laws and applicable PMIERs credit for reinsurance requirements. Reinsurance transactions effective in subsequent periods QSR Transactions •We executed a 40% QSR Transaction with a group of unaffiliated reinsurers covering eligible NIW in 2027.

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