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Segment Reporting | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Segment Reporting | 4. Segm ent Reporting In 2024, our Chief Executive Officer (Radian’s chief operating decision maker) made certain changes to the way that he organizes and assesses the performance of our operating segments, which resulted in updates to our quantitative and aggregation analyses in accordance with the accounting standard regarding segment reporting. Whereas in prior years we aggregated our Title, Real Estate Services and Real Estate Technology businesses and reported them as a single reportable segment named homegenius, effective for 2024 we are reporting the results of operations for these individual businesses and our Mortgage Conduit business, none of which meet the reportable quantitative thresholds, in the All Other category, along with certain corporate and other activities. This reflects the way our Chief Executive Officer is currently evaluating these businesses individually, given that these businesses offer distinct products and services and are managed separately. This approach is also aligned with materiality considerations consistent with current accounting guidance. As a result of the change described above, we now have one reportable segment, Mortgage Insurance, which derives its revenue from mortgage insurance and other mortgage and risk services, including contract underwriting solutions provided to mortgage lending institutions and mortgage credit investors. In addition to this reportable segment, in All Other we report activities that include: (i) income (losses) from assets held by Radian Group, our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segment; and (iii) the operating results from certain other immaterial activities and operating segments, including our Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses. We have reflected this change in our segment operating results for all periods presented, as shown below. We allocate corporate operating expenses to our Mortgage Insurance business and our immaterial operating businesses included in All Other based primarily on their respective forecasted annual percentage of total revenue, which approximates the estimated percentage of management time spent on each business. In addition, we allocate all corporate interest expense to our Mortgage Insurance segment, due to the capital-intensive nature of our Mortgage Insurance business. We do not manage assets by operating segments. See Note 1 for additional details about our Mortgage Insurance business. Adjusted Pretax Operating Income (Loss) Our senior management, including our Chief Executive Officer, uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of Radian’s businesses and to allocate resources to them, including during the annual budget and forecasting process. Our Chief Executive Officer then reviews budget-to-actual variances on a monthly basis using this primary measure of segment profit or loss to assess performance and allocate capital and personnel to each business. Adjusted pretax operating income (loss) is defined as pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments, except for those investments and other financial instruments attributable to our Mortgage Conduit business; (ii) amortization and impairment of goodwill and other acquired intangible assets; and (iii) impairment of other long-lived assets and other non-operating items, if any, such as gains (losses) from the sale of lines of business, acquisition-related income (expenses) and gains (losses) on extinguishment of debt. Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss). These adjustments, along with the reasons for their treatment, are described below. (1) Net gains (losses) on investments and other financial instruments. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities, our tax and capital profile and overall market cycles. Unrealized gains and losses arise primarily from changes in the market value of our investments that are classified as trading or equity securities. These valuation adjustments may not necessarily result in realized economic gains or losses. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized and unrealized gains or losses and changes in fair value of other financial instruments. Except for certain investments and other financial instruments attributable to specific operating segments, we do not view them to be indicative of our fundamental operating activities. (2) Amortization and impairment of goodwill and other acquired intangible assets. Amortization of acquired intangible assets represents the periodic expense required to amortize the cost of acquired intangible assets over their estimated useful lives. Acquired intangible assets are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. We do not view these charges as part of the operating performance of our primary activities. (3) Impairment of other long-lived assets and other non-operating items, if any. Impairment of other long-lived assets and other non-operating items includes activities that we do not view to be indicative of our fundamental operating activities, such as: (i) impairment of internal-use software and other long-lived assets; (ii) gains (losses) from the sale of lines of business; (iii) acquisition-related income and expenses; and (iv) gains (losses) on extinguishment of debt. The reconciliation of adjusted pretax operating income (loss) for our reportable segment to consolidated pretax income is as follows.
Reconciliation of adjusted pretax operating income (loss) to consolidated pretax income |
|  | December 31, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Mortgage Insurance adjusted pretax operating income |  | $ | 827,363 |  |  | $ | 829,824 |  |  | $ | 1,131,943 |
Reconciling items |  |  |  |  |  |  |  |  |
All Other adjusted pretax operating income (loss) |  |  | (24,358 | ) |  |  | (43,397 | ) |  |  | (79,226 | )
Net gains (losses) on investments and other financial instruments (1) |  |  | (4,316 | ) |  |  | 9,427 |  |  |  | (80,780 | )
Amortization and impairment of goodwill and other acquired intangible assets |  |  | — |  |  |  | (15,285 | ) |  |  | (4,308 | )
Impairment of other long-lived assets and other non-operating items (2) |  |  | (27,399 | ) |  |  | (13,082 | ) |  |  | (14,850 | )
Consolidated pretax income |  | $ | 771,290 |  |  | $ | 767,487 |  |  | $ | 952,779 |
(1) Excludes net gains (losses) on investments and other financial instruments that are attributable to our Mortgage Conduit business, which are included in adjusted pretax operating income (loss). (2) For 2024, amount includes: (i) $19 million from impairments of internal-use software, due to strategic decisions made in 2024 to discontinue certain products; (ii) $4 million related to loss on extinguishment of debt; and (iii) $4 million from impairments of lease-related assets. For 2023, amount includes $9 million and $5 million r elated to impairments of our lease-related assets and internal use software, respectively. For 2022, amount is primarily related to impairments of our lease-related assets. See Note 13 for more information on our operating leases. Revenue and Other Segment Information The following tables reconcile reportable segment revenues to consolidated revenues and summarize interest expense, depreciation expense, allocation of corporate operating expenses and adjusted pretax operating income for our reportable segment as follows.
Reportable segment revenue and other segment information |
|  | December 31, 2024 |
(In thousands) |  | Mortgage Insurance |  |  | All Other |  |  | Inter-segment |  |  | Adjustments (1) |  |  | Consolidated Total |
Net premiums earned |  | $ | 939,237 |  |  | $ | 12,046 |  |  | $ | — |  |  | $ | — |  |  | $ | 951,283 |
Services revenue |  |  | 1,025 |  |  |  | 49,646 |  |  |  | (401 | ) |  |  | — |  |  |  | 50,270 |
Net investment income |  |  | 201,453 |  |  |  | 91,240 |  |  |  | — |  |  |  | — |  |  |  | 292,693 |
Net gains (losses) on investments and other financial instruments |  |  | — |  |  |  | (5,798 | ) |  |  | — |  |  |  | (4,316 | ) |  |  | (10,114 | )
Income (loss) on consolidated VIEs |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | (2 | )
Other income |  |  | 5,649 |  |  |  | 582 |  |  |  | (78 | ) |  |  | — |  |  |  | 6,153 |
Total revenues |  |  | 1,147,364 |  |  | $ | 147,714 |  |  | $ | (479 | ) |  | $ | (4,316 | ) |  | $ | 1,290,283 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for losses |  |  | (2,248 | ) |  |  |  |  |  |  |  |  |  |  |  |
Policy acquisition costs |  |  | 27,316 |  |  |  |  |  |  |  |  |  |  |  |  |
Direct other operating expenses |  |  | 66,417 |  |  |  |  |  |  |  |  |  |  |  |  |
Allocated corporate operating expenses (2) |  |  | 144,251 |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 83,731 |  |  |  |  |  |  |  |  |  |  |  |  |
Other segment items |  |  | 534 |  |  |  |  |  |  |  |  |  |  |  |  |
Adjusted pretax operating income |  | $ | 827,363 |  |  |  |  |  |  |  |  |  |  |  |  |
Other segment information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct depreciation expense |  | $ | 7,974 |  |  |  |  |  |  |  |  |  |  |  |  |
Loss Ratio (3) |  |  | (0.2 | )% |  |  |  |  |  |  |  |  |  |  |  |
Expense Ratio (4) |  |  | 25.3 | % |  |  |  |  |  |  |  |  |  |  |  |
Reportable segment revenue and other segment information |
|  | December 31, 2023 |
(In thousands) |  | Mortgage Insurance |  |  | All Other |  |  | Inter-segment |  |  | Adjustments (1) |  |  | Consolidated Total |
Net premiums earned |  | $ | 909,363 |  |  | $ | 10,215 |  |  | $ | — |  |  | $ | — |  |  | $ | 919,578 |
Services revenue |  |  | 1,088 |  |  |  | 45,394 |  |  |  | (390 | ) |  |  | — |  |  |  | 46,092 |
Net investment income |  |  | 195,077 |  |  |  | 63,353 |  |  |  | — |  |  |  | — |  |  |  | 258,430 |
Net gains (losses) on investments and other financial instruments |  |  | — |  |  |  | 814 |  |  |  | — |  |  |  | 9,427 |  |  |  | 10,241 |
Other income |  |  | 5,372 |  |  |  | 27 |  |  |  | (20 | ) |  |  | 868 |  |  |  | 6,247 |
Total revenues |  |  | 1,110,900 |  |  | $ | 119,803 |  |  | $ | (410 | ) |  | $ | 10,295 |  |  | $ | 1,240,588 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for losses |  |  | (42,136 | ) |  |  |  |  |  |  |  |  |  |  |  |
Policy acquisition costs |  |  | 24,578 |  |  |  |  |  |  |  |  |  |  |  |  |
Direct other operating expenses |  |  | 71,150 |  |  |  |  |  |  |  |  |  |  |  |  |
Allocated corporate operating expenses (2) |  |  | 140,583 |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 86,188 |  |  |  |  |  |  |  |  |  |  |  |  |
Other segment items |  |  | 713 |  |  |  |  |  |  |  |  |  |  |  |  |
Adjusted pretax operating income |  | $ | 829,824 |  |  |  |  |  |  |  |  |  |  |  |  |
Other segment information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct depreciation expense |  | $ | 8,164 |  |  |  |  |  |  |  |  |  |  |  |  |
Loss Ratio (3) |  |  | (4.6 | )% |  |  |  |  |  |  |  |  |  |  |  |
Expense Ratio (4) |  |  | 26.0 | % |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2022 |
(In thousands) |  | Mortgage Insurance |  |  | All Other |  |  | Inter-segment |  |  | Adjustments (1) |  |  | Consolidated Total |
Net premiums earned |  | $ | 957,213 |  |  | $ | 23,918 |  |  | $ | — |  |  | $ | — |  |  | $ | 981,131 |
Services revenue |  |  | 7,390 |  |  |  | 85,158 |  |  |  | (332 | ) |  |  | — |  |  |  | 92,216 |
Net investment income |  |  | 171,221 |  |  |  | 24,437 |  |  |  | — |  |  |  | — |  |  |  | 195,658 |
Net gains (losses) on investments and other financial instruments |  |  | — |  |  |  | 47 |  |  |  | — |  |  |  | (80,780 | ) |  |  | (80,733 | )
Other income |  |  | 2,376 |  |  |  | 248 |  |  |  | (170 | ) |  |  | — |  |  |  | 2,454 |
Total revenues |  |  | 1,138,200 |  |  | $ | 133,808 |  |  | $ | (502 | ) |  | $ | (80,780 | ) |  | $ | 1,190,726 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for losses |  |  | (339,374 | ) |  |  |  |  |  |  |  |  |  |  |  |
Policy acquisition costs |  |  | 23,918 |  |  |  |  |  |  |  |  |  |  |  |  |
Direct other operating expenses |  |  | 92,756 |  |  |  |  |  |  |  |  |  |  |  |  |
Allocated corporate operating expenses (2) |  |  | 138,566 |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 84,440 |  |  |  |  |  |  |  |  |  |  |  |  |
Other segment items |  |  | 5,951 |  |  |  |  |  |  |  |  |  |  |  |  |
Adjusted pretax operating income |  | $ | 1,131,943 |  |  |  |  |  |  |  |  |  |  |  |  |
Other segment information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct depreciation expense |  | $ | 8,986 |  |  |  |  |  |  |  |  |  |  |  |  |
Loss Ratio (3) |  |  | (35.5 | )% |  |  |  |  |  |  |  |  |  |  |  |
Expense Ratio (4) |  |  | 26.7 | % |  |  |  |  |  |  |  |  |  |  |  |
(1) Represents non-operating items not included in segment results. See “Adjusted Pretax Operating Income (Loss)” above for more information. (2) Includes immaterial allocated depreciation expense. (3) Calculated as provision for losses expressed as a percentage of net premiums earned. (4) Calculated as operating expenses (which consist of policy acquisition costs and direct other operating expenses, as well as allocated corporate operating expenses) expressed as a percentage of net premiums earned. There was no single customer that accounted for more than 10% of our consolidated revenues (excluding net gains (losses) on investments and other financial instruments) in 2024, 2023 or 2022. There was no customer that accounted for more than 10% of NIW in 2024, 2023 or 2022. The table below, which represents total services revenue in our consolidated statements of operations for the periods indicated, provides the disaggregation of services revenue by revenue type.
Services revenue |
|  | Years Ended December 31, |
(In thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Mortgage Insurance |  |  |  |  |  |  |  |  |
Contract underwriting services |  | $ | 1,024 |  |  | $ | 1,088 |  |  | $ | 1,775 |
Loan fulfillment services |  |  | — |  |  |  | — |  |  |  | 5,615 |
All Other |  |  |  |  |  |  |  |  |
Real Estate Services |  |  |  |  |  |  |  |  |
Valuation |  |  | 15,768 |  |  |  | 14,555 |  |  |  | 30,002 |
Single family rental |  |  | 8,412 |  |  |  | 7,743 |  |  |  | 24,387 |
Asset management technology platform |  |  | 4,924 |  |  |  | 4,639 |  |  |  | 4,814 |
Real estate owned asset management |  |  | 4,455 |  |  |  | 3,960 |  |  |  | 3,091 |
Other real estate services |  |  | 20 |  |  |  | 30 |  |  |  | 115 |
Title |  |  | 13,185 |  |  |  | 11,464 |  |  |  | 18,687 |
Real Estate Technology |  |  | 2,482 |  |  |  | 2,613 |  |  |  | 3,730 |
Total services revenue |  | $ | 50,270 |  |  | $ | 46,092 |  |  | $ | 92,216 |

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