Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2025, for Radian Group Inc. (Radian), a leading U.S. private mortgage insurer. As of year-end, the Company operated one reportable segment: Mortgage Insurance. In September 2025, Radian announced a strategic transformation to become a global multi-line specialty insurer, entering into a definitive agreement to acquire Inigo, a Lloyd's specialty insurer. The acquisition closed on February 2, 2026. Concurrently, Radian announced the planned divestiture of its Mortgage Conduit, Title, and Real Estate Services businesses, which were reclassified as discontinued operations effective Q3 2025.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Net Income (Continuing Ops) | $618.2 million | $660.3 million |
| Diluted EPS (Continuing Ops) | $4.39 | $4.28 |
| Adjusted Pretax Operating Income | $801.7 million | $867.2 million |
| Net Premiums Earned | $941.9 million | $939.2 million |
| Net Investment Income | $248.8 million | $264.8 million |
| Provision for Losses | $66.8 million | $(2.2) million (Benefit) |
| Insurance in Force (IIF) | $282.5 billion | $275.1 billion |
| Available Liquidity (Holding Co.) | $1.8 billion | $885 million |
| Debt-to-Capital Ratio | 18.3% | 18.7% |
Material Changes vs. Prior Period
- Profitability: Net income from continuing operations decreased by 6.4% to $618.2 million, primarily due to a reduction in favorable reserve development on prior-year defaults and an increase in current-year new primary defaults. However, diluted EPS increased to $4.39 due to significant share repurchases (13.4 million shares in 2025).
- Loss Reserves: The provision for losses turned positive at $66.8 million in 2025, compared to a benefit of $2.2 million in 2024. This shift reflects a reduction in favorable development on prior-year defaults and a 2% increase in new primary defaults.
- Investment Income: Net investment income declined by 6.1% to $248.8 million, driven by lower average investment balances following the redemption of $450 million in senior notes in late 2024 and slightly lower yields.
- Portfolio Growth: New Insurance Written (NIW) increased to $55.2 billion, driving IIF growth to $282.5 billion. The 12-month Persistency Rate remained flat at 83.6%.
- Capital Structure: The Company increased holding company liquidity to $1.8 billion to prepare for the Inigo acquisition, utilizing a $600 million intercompany note from Radian Guaranty and drawing on its credit facility.
Guidance, Outlook, and Risks
- Strategic Transformation: Radian is transitioning from a monoline mortgage insurer to a global multi-line specialty insurer following the Inigo acquisition. Inigo's results will be consolidated starting Q1 2026.
- Divestitures: The Mortgage Conduit, Title, and Real Estate Services businesses are held for sale, with divestiture expected by Q3 2026. Results for these units are reported as discontinued operations.
- Outlook: Management expects the in-force portfolio premium yield to remain stable in 2026. However, net premium yield may fluctuate due to Single Premium Policy cancellations and reinsurance impacts. The outlook for the mortgage insurance business remains positive, supported by strong credit performance and low claims levels.
- Key Risks:
- Regulatory: Compliance with GSE eligibility requirements (PMIERs) and state insurance regulations remains critical. The Inigo acquisition subjects the Company to new U.K. regulatory frameworks (PRA/FCA).
- Acquisition Integration: Risks include diversion of management attention, unknown liabilities, and integration challenges with Inigo.
- Divestiture Execution: Risks related to the inability to complete the sale of non-core businesses on anticipated timelines or terms.
- Interest Rates: A decline in interest rates could increase refinancing activity, lowering Persistency Rates and future revenue from Monthly Premium Policies.
Investor Verification Checklist
- Inigo Acquisition Accounting: Verify the preliminary fair value of assets acquired and liabilities assumed once the initial accounting is completed in Q1 2026.
- PMIERs Cushion: Monitor the impact of the $600 million intercompany note on Radian Guaranty's PMIERs Cushion, which decreased to $1.6 billion (41% over minimum) at year-end.
- Dividend Restrictions: Confirm the status of dividend approvals from the Pennsylvania Insurance Department, as Radian Guaranty requires prior approval for all dividends for a period of at least three years following the intercompany note issuance.
- Loss Reserve Sensitivity: Review the sensitivity of loss reserves to changes in Claim Severity and Default to Claim Rate assumptions, particularly given the shift from favorable to unfavorable reserve development in 2025.
- Divestiture Timeline: Track progress on the sale of Mortgage Conduit, Title, and Real Estate Services businesses to ensure completion by Q3 2026.