v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting

5. Segment Reporting

In connection with the acquisition of Inigo during the first quarter of 2026, our Chief Executive Officer (Radian’s chief operating decision maker) implemented certain changes that caused the composition of our reportable segments and the allocations of certain expenses for segment measurements to change.

We now have two reportable business segments that are managed separately, Mortgage and Specialty. Our Mortgage segment primarily derives its revenue by providing private mortgage insurance on residential first-lien mortgage loans to mortgage lending institutions and mortgage credit investors. Our Specialty segment primarily derives its revenue by providing insurance and reinsurance lines of business, including property, casualty, financial lines and other specialty lines, to some of the world’s largest commercial and industrial enterprises.

The Company’s Mortgage and Specialty segments are managed by the Co-heads of Mortgage Insurance and the Chief Executive Officer of Inigo, respectively, who are responsible for the overall profitability of their respective segments and who are directly accountable to our chief operating decision maker.

In addition to these reportable segments, we report in a Corporate category activities that comprise: (i) income (losses) from assets held by Radian Group; (ii) interest expense from Radian Group’s borrowings, including the Intercompany Note with Radian Guaranty; and (iii) general corporate operating expenses not attributable or allocated to our reportable segments, related primarily to corporate oversight activities.

As further described in Note 18, we also report the results of our Mortgage Conduit, Title and Real Estate Services businesses as discontinued operations in our condensed consolidated statements of operations.

As of December 31, 2025, we previously reported our results from continuing operations as a single reportable segment, mortgage insurance, which included all the net investment income, interest expense and other operating expenses from our holding company. As described above, consistent with how our chief operating decision maker evaluates segment performance, all net investment income and interest expense from our holding company is now reported in our Corporate category, along with a portion of our holding company operating expenses estimated to relate to corporate oversight activities.

The remaining portion of our holding company operating expenses are allocated to our Mortgage segment, based on the estimated percentage of management time spent directly supporting that business. No holding company expenses are allocated to the Specialty segment or to discontinued operations. We have reflected these changes in our segment operating results for all periods presented, as shown below.

See Note 1 for additional details about our Mortgage and Specialty businesses.

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 our businesses.

The tables below present details on the operating results for our Mortgage segment and our Specialty segment, including a disaggregation of significant segment expenses as monitored by Radian’s chief operating decision maker.

Segment operating results and other information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30, 2026

 

 

Six Months Ended
June 30, 2026

 

($ in thousands)

 

Mortgage

 

 

Specialty

 

 

Total

 

 

Mortgage

 

 

Specialty (1)

 

 

Total

 

Net premiums earned

 

$

236,349

 

 

$

267,363

 

 

$

503,712

 

 

$

474,526

 

 

$

431,714

 

 

$

906,240

 

Net investment income (2)

 

 

55,614

 

 

 

24,902

 

 

 

80,516

 

 

 

108,941

 

 

 

41,801

 

 

 

150,742

 

Other income

 

 

1,258

 

 

 

1,082

 

 

 

2,340

 

 

 

2,921

 

 

 

2,409

 

 

 

5,330

 

Total revenues

 

 

293,221

 

 

 

293,347

 

 

 

586,568

 

 

 

586,388

 

 

 

475,924

 

 

 

1,062,312

 

Less: expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses

 

 

29,418

 

 

 

169,239

 

 

 

198,657

 

 

 

53,694

 

 

 

255,507

 

 

 

309,201

 

Amortization of deferred policy acquisition costs (3)

 

 

6,881

 

 

 

52,937

 

 

 

59,818

 

 

 

13,780

 

 

 

82,002

 

 

 

95,782

 

Other operating expenses (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and share-based employee expenses

 

 

37,221

 

 

 

15,927

 

 

 

53,148

 

 

 

67,232

 

 

 

25,964

 

 

 

93,196

 

Other non-employee operating expenses

 

 

17,931

 

 

 

22,510

 

 

 

40,441

 

 

 

35,060

 

 

 

36,954

 

 

 

72,014

 

Depreciation expense

 

 

1,803

 

 

 

605

 

 

 

2,408

 

 

 

3,605

 

 

 

1,009

 

 

 

4,614

 

Ceding commissions (3)

 

 

(8,608

)

 

 

—

 

 

 

(8,608

)

 

 

(16,827

)

 

 

—

 

 

 

(16,827

)

Total other operating expenses

 

 

48,347

 

 

 

39,042

 

 

 

87,389

 

 

 

89,070

 

 

 

63,927

 

 

 

152,997

 

Interest expense

 

 

754

 

 

 

3,533

 

 

 

4,287

 

 

 

1,224

 

 

 

5,823

 

 

 

7,047

 

Adjusted pretax operating income

 

$

207,821

 

 

$

28,596

 

 

 

236,417

 

 

$

428,620

 

 

$

68,665

 

 

 

497,285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciling items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate adjusted pretax operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate net investment income

 

 

 

 

 

 

 

 

3,930

 

 

 

 

 

 

 

 

 

13,152

 

Corporate other operating expenses

 

 

 

 

 

 

 

 

(16,723

)

 

 

 

 

 

 

 

 

(27,422

)

Corporate interest expense (5)

 

 

 

 

 

 

 

 

(27,775

)

 

 

 

 

 

 

 

 

(55,359

)

Net gains (losses) on financial instruments and foreign exchange

 

 

 

 

 

 

 

 

(5,789

)

 

 

 

 

 

 

 

 

(14,668

)

Amortization and impairment of other acquired intangible assets

 

 

 

 

 

 

 

 

(5,896

)

 

 

 

 

 

 

 

 

(9,805

)

Other purchase accounting adjustments, net (6)

 

 

 

 

 

 

 

 

(26,726

)

 

 

 

 

 

 

 

 

(50,056

)

Acquisition-related expenses and other non-operating items (7)

 

 

 

 

 

 

 

 

(6,721

)

 

 

 

 

 

 

 

 

(28,747

)

Pretax income from continuing operations

 

 

 

 

 

 

 

$

150,717

 

 

 

 

 

 

 

 

$

324,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key segment ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss Ratio

 

 

12.4

%

 

 

63.3

%

 

 

 

 

 

11.3

%

 

 

59.2

%

 

 

 

Expense Ratio

 

 

23.4

%

 

 

34.4

%

 

 

 

 

 

21.7

%

 

 

33.8

%

 

 

 

Combined Ratio

 

 

35.8

%

 

 

97.7

%

 

 

 

 

 

33.0

%

 

 

93.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment assets as of period end

 

 

 

 

 

 

 

 

 

 

$

6,504,057

 

 

$

4,021,418

 

 

 

 

 

 

 

(1)
Results are for the five-month period subsequent to the Closing Date.
(2)
For the three and six months ended June 30, 2026, the Mortgage segment includes $10 million and $20 million, respectively, related to the Intercompany Note that is reported as interest expense in Corporate category and eliminated in consolidation.
(3)
Ceding commissions represent fees paid by reinsurers to offset certain costs incurred by the primary insurer. We report such commissions based on the nature of the underlying costs. For the Specialty segment, ceding commissions primarily relate to reimbursement of acquisition costs and are reported in amortization of deferred policy acquisition costs. For the Mortgage segment, ceding commissions primarily relate to reimbursement of operating expenses and are reported primarily in other operating expenses.
(4)
For the three and six months ended June 30, 2026, the Mortgage segment includes $31 million and $51 million, respectively, of allocated holding company operating expenses, representing estimated time spent directly supporting the Mortgage business.
(5)
For the three and six months ended June 30, 2026, includes $10 million and $20 million, respectively, related to the Intercompany Note that is reported as net investment income in the Mortgage segment and eliminated in consolidation.
(6)
For the three and six months ended June 30, 2026, primarily includes $64 million and $118 million, respectively, of net VOBA asset and liability amortization, partially offset by $37 million and $68 million, respectively, of reversal of policy acquisition costs that are reflected in segment results but eliminated under purchase accounting on a consolidated basis.
(7)
Relates to acquisition-related expenses, which are included in other operating expenses on the condensed consolidated statement of operations.

 

Segment operating results and other information

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30, 2025

 

 

Six Months Ended
June 30, 2025

 

($ in thousands)

 

Mortgage

 

 

Mortgage

 

Net premiums earned

 

$

233,526

 

 

$

467,570

 

Net investment income

 

 

53,289

 

 

 

101,740

 

Other income

 

 

1,502

 

 

 

3,284

 

Total revenues

 

 

288,317

 

 

 

572,594

 

Less: expenses

 

 

 

 

 

 

Provision for losses

 

 

11,954

 

 

 

27,294

 

Amortization of deferred policy acquisition costs

 

 

7,205

 

 

 

13,593

 

Other operating expenses (1)

 

 

 

 

 

 

Salaries and share-based employee expenses

 

 

42,012

 

 

 

74,648

 

Other non-employee operating expenses

 

 

15,071

 

 

 

30,486

 

Depreciation expense

 

 

1,873

 

 

 

3,747

 

Ceding commissions

 

 

(7,075

)

 

 

(13,797

)

Total other operating expenses

 

 

51,881

 

 

 

95,084

 

Interest expense

 

 

877

 

 

 

1,302

 

Adjusted pretax operating income

 

$

216,400

 

 

$

435,321

 

 

 

 

 

 

 

 

Reconciling items

 

 

 

 

 

 

Corporate adjusted pretax operating income (loss)

 

 

 

 

 

 

Corporate net investment income

 

 

8,383

 

 

 

20,942

 

Corporate other operating expenses

 

 

(17,297

)

 

 

(31,618

)

Corporate interest expense

 

 

(16,551

)

 

 

(32,615

)

Net gains (losses) on financial instruments and foreign exchange

 

 

1,851

 

 

 

(150

)

Acquisition-related expenses and other non-operating items

 

 

—

 

 

 

(384

)

Pretax income from continuing operations

 

$

192,786

 

 

$

391,496

 

 

 

 

 

 

 

 

Key segment ratios

 

 

 

 

 

 

Loss Ratio

 

 

5.1

%

 

 

5.8

%

Expense Ratio

 

 

25.3

%

 

 

23.2

%

Combined Ratio

 

 

30.4

%

 

 

29.0

%

 

 

 

 

 

 

 

Segment assets as of period end

 

 

 

 

$

6,612,438

 

 

(1)
For the three and six months ended June 30, 2025, includes $32 million and $59 million, respectively, of allocated holding company operating expenses, representing estimated time spent directly supporting the Mortgage business.

As detailed below, the calculation of adjusted pretax operating income is presented for continuing operations only and therefore excludes income (loss) from discontinued operations, net of tax, for all periods presented herein.

While adjusted pretax operating income (loss) excludes from pretax income (loss) from continuing operations the effects of 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) from continuing operations. These adjustments to pretax income (loss) from continuing operations, along with the reasons for their treatment, are described below.

Net gains (losses) on financial instruments and foreign exchange. The recognition of realized gains or losses on financial instruments and foreign currency exchange gains or losses can vary significantly across periods as such amounts are influenced by discretionary actions, including the timing of individual securities transactions, as well as by market conditions, our tax and capital profile, foreign currency movements 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 and from changes in foreign exchange rates affecting monetary assets and liabilities. 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, foreign currency exchange impacts and changes in fair value of financial instruments.

Amortization of other acquired intangible assets. Amortization of other 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.

Other purchase accounting adjustments, net. Other purchase accounting adjustments include amortization related to VOBA and other impacts resulting from purchase accounting, such as the reversal of amortization related to Inigo’s historical deferred acquisition costs and capitalized software as of the acquisition date. These non-cash amounts arise from acquisition-related accounting requirements and do not necessarily reflect the underlying operating performance of the acquired business.

Acquisition-related expenses and other non-operating items. Acquisition-related expenses and other non-operating items include activities that we do not view to be indicative of our fundamental operating activities, such as: (i) acquisition-related income and expenses; (ii) impairment of internal-use software and other long-lived assets; and (iii) gains (losses) on extinguishment of debt.