MGIC INVESTMENT CORP (MTG)

CIK: 0000876437. SIC: 6351 Surety Insurance. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Finance, Insurance, And Real Estate > Insurance Carriers > SIC 6351 Surety Insurance

SEC company page: https://www.sec.gov/edgar/browse/?CIK=876437. Latest filing source: 0000876437-26-000010.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000876437.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000876437.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000876437-26-000022.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-04-29. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following is management’s discussion and analysis of the financial condition and results of operations of MGIC Investment Corporation for the first quarter of 2026. As used below, “we” and “our” refer to MGIC Investment Corporation’s consolidated operations. This form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. See the “Glossary of terms and acronyms” for definitions and descriptions of terms used throughout this MD&A. Our revenues and losses could be affected by the Risk Factors referred to under “Forward Looking Statements and Risk Factors” above, and they are an integral part of the MD&A.

Forward Looking and Other Statements

As discussed under “Forward Looking Statements and Risk Factors” above, actual results may differ materially from the results contemplated by forward looking statements. These forward looking statements speak only as of the date of this filing and are subject to change without notice. We are not undertaking any obligation to update any forward looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. Therefore, no reader of this document should rely on these statements being current as of any time other than the time at which this document was filed with the Securities and Exchange Commission.

MGIC Investment Corporation - Q1 2026 | 31

Overview

Through our primary operating subsidiary, Mortgage Guaranty Insurance Corporation (“MGIC”), we provide mortgage insurance to lenders throughout the United States and to government sponsored entities to protect against loss from defaults on low down payment residential mortgage loans. Primary mortgage insurance provides mortgage default protection on individual loans and covers a percentage of the unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure or sale approved by us, of the underlying property.

As of March 31, 2026, we had $302.7 billion of primary insurance in force and $81.2 billion of primary risk in force.

PMIERs

We operate under the requirements of the GSEs PMIERs and must maintain compliance with these requirements to be eligible to insure loans delivered to or purchased by that GSE. The PMIERs include financial requirements, as well as business, quality control and certain transaction approval requirements. The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs.

The financial requirements of the PMIERs require a mortgage insurer’s "Available Assets" (generally only the most liquid assets of an insurer) to equal or exceed its "Minimum Required Assets" (which are generally based on an insurer's book of risk in force and calculated from tables of factors with several risk dimensions, reduced for credit given for risk ceded under reinsurance agreements and subject to a floor amount). Based on our application of the PMIERs as of March 31, 2026, MGIC’s Available Assets totaled $5.8 billion, or $2.9 billion in excess of its Minimum Required Assets.

MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs; however, if our Available Assets fall below our Minimum Required Assets, we would not be in compliance with the PMIERs. Our ability to continue to comply with PMIERS financial requirements could be affected by several factors, including:

•Amendments to PMIERs, or changes to the way the GSEs interpret the existing PMIERs.

•An increase in the number of loan delinquencies. The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans, and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases. If we are required to hold more capital relative to our insured loans it could adversely affect our business and results of operations.

•The credit we receive for the investments in our investment portfolio. Under PMIERs, specified assets are excluded, limited or haircut for purposes of being counted as Available Assets.

•Changes to the amount of credit we receive for risk ceded under our QSR and XOL Transactions. Our reinsurance transactions enable us to earn higher returns on our Minimum Required Assets than we would without them because they generally reduce the Minimum Required Assets we must hold under PMIERs. For additional information see our risk factors titled "Our underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring" and "Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

•Failure to meet certain transactional approval conditions imposed by PMIERs. Such failure may restrict or delay us from taking certain actions that would be advantageous to our investors.

GSE Reform

FHFA placed the GSEs into conservatorship on September 7, 2008 and the FHFA has the authority to control and direct their operations. Given that the Director of the FHFA serves at the pleasure of the President, the agency's agenda, policies and actions may be influenced by the then-current administration.

Congress and executive branch officials have periodically proposed various plans for the reform of the GSEs, including through privatization and/or termination of FHFA's conservatorship. However, it is unclear what reforms will ultimately be implemented, if any, and what the time frame for any such reforms will be. The potential impact of any such plan on our business and financial results remains uncertain.

For additional information about the business practices of the GSEs, see our risk factor titled “Changes in the business practices of Fannie Mae and Freddie Mac ("the GSEs"), federal legislation that changes their charters or a restructuring of the GSEs could reduce our revenues or increase our losses” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

State Regulations

The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to its RIF (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage

MGIC Investment Corporation - Q1 2026 | 32

decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a MPP. MGIC’s “policyholder position” includes its net worth or surplus and its contingency reserve.

As of March 31, 2026, MGIC’s risk-to-capital ratio was 9.6 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.8 billion above the required MPP of $2.1 billion. The calculation of our risk-to-capital ratio and MPP reflect full credit for the risk ceded under our reinsurance transactions. It is possible that under the revised State Capital Requirements discussed below, MGIC will not be allowed full credit for the risk ceded under such transactions. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the PMIERs, MGIC may terminate the reinsurance transactions, without penalty.

At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, for additional information about matters that could negatively impact our compliance with State Capital Requirements refer to our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

In 2023, the NAIC adopted a revised Mortgage Guaranty Insurance Model Act. The updated Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements. It is uncertain when the revised Model Act will be adopted in any jurisdiction. The provisions of the Model Act, if adopted in their final form, are not expected to have a material adverse effect on our business. It is unknown whether any changes will be made by state legislatures prior to adoption, and the effect changes, if any, will have on the mortgage guaranty insurance market generally, or on our business. Wisconsin, where MGIC is domiciled, has begun the process to replace current Mortgage Insurance regulations with the Model Act; however it is expected that modifications will be made before formal adoption.

Mortgage Insurance Earnings and Cash Flow Cycle

In general, the majority of any underwriting profit that a book generates occurs in the early years of the book, with the largest portion of any underwriting profit realized in the first year following the year the book was written. Subsequent years of a book may result in either underwriting profit or underwriting losses. This pattern generally results from the fact that relatively few of the losses ultimately incurred on delinquencies occur in the early years of a book, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases, primarily due to loan prepayments, and increasing losses. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors may result in delinquencies not following the typical pattern.

Key Factors Affecting Our Results

Our current and future business, results of operations and financial condition are impacted by macroeconomic conditions, such as interest rates, home prices, housing demand, level of employment, inflation, pandemics, restrictions on and costs of mortgage credit, and other factors. For additional information on how our business may be impacted by such circumstances refer to our Risk Factors published in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Premiums Written and Earned

Premiums written and earned during a given period are primarily driven by the insurance in force during all or a portion of the period. A change in the average IIF in the current period compared to an earlier period is a factor that will increase (when the average in force is higher) or reduce (when it is lower) premiums written and earned in the current period, although this effect may be enhanced or mitigated by the following factors:

•NIW: Increases IIF and is influenced by the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mort

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

As used below, “we” and “our” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as a separate entity, as the context requires. References to "we" and "our" in the context of debt obligations refer to MGIC Investment Corporation. See the "Glossary of terms and acronyms" for definitions and descriptions of terms used throughout this annual report. The risk factors contained in Item 1A discuss trends and uncertainties affecting us and are an integral part of the MD&A.

The following is a discussion and analysis of the financial conditions and results of operations for the years ended December 31, 2025 and 2024, including comparisons between 2025 and 2024. Comparisons between 2024 and 2023 have been omitted from this Form 10-K, but can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.

Forward Looking and Other Statements

As discussed under “Forward Looking Statements and Risk Factors” in "Item 1. Business - A. General" of this Report, actual results may differ materially from the results contemplated by forward looking statements. We are not undertaking any obligation to update any forward looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. Therefore, no reader of this document should rely on these statements being current as of any time other than the time at which this document was filed with the Securities and Exchange Commission.

MGIC Investment Corporation 2025 Form 10-K | 44

Overview

The following discussion highlights factors influencing our financial results and results of operations and may not contain all of the information that is important to readers of this Annual Report. It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein.

Through MGIC, the principal subsidiary of MGIC Investment Corporation, we serve lenders throughout the United States helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality through the use of private mortgage insurance. As of December 31, 2025 MGIC had $303.1 billion of primary IIF.

Business Environment

Mortgage Insurance Market

The strong credit quality of our insurance portfolio reflects several years of favorable housing fundamentals, and in our view, favorable risk characteristics on our recently insured loans. Our IIF increased during the year as a result of an increase in NIW offset partially by cancellations. Refer to "Mortgage Insurance Portfolio" for information on our NIW mix during 2025.

Our NIW is affected by the total mortgage originations, the percentage of total mortgage originations using PMI, and our market share within the PMI industry.

The total amount of mortgage originations is generally influenced by the level of new and existing home sales, interest rates, the percentage of homes purchased for cash, and the level of refinance activity. PMI market share of total mortgage originations is influenced by the mix of purchase and refinance originations. PMI market share is also impacted by the market share of total originations of the FHA and VA, and other alternatives to mortgage insurance, including GSE programs that may reduce or eliminate the demand for mortgage insurance.

The increase in total mortgage originations in 2025 as compared with 2024 reflects a modest decrease in interest rates during 2025 contributing to an increase in refinance and purchase originations during the year. Total mortgage originations are forecasted to be higher in 2026, compared with 2025.

E - Estimated, F- Forecast

Source: Fannie Mae and MBA estimates/forecasts as of January 2026. Amounts represent the average of all sources.

Competitive Environment

The private mortgage insurance industry is highly competitive and is expected to remain so. We compete against five other private mortgage insurers, as well as governmental agencies, principally the FHA and VA.

The total estimated mortgage insurance volume is shown below.

Estimated Total of PMI, FHA, USDA, and VA Primary Mortgage Insurance

(in billions)

Year Ended December 31, 2025

Year Ended December 31, 2024

Primary mortgage insurance

$818

$727

Source: Inside Mortgage Finance - February 19, 2026 or SEC filings.

MGIC Investment Corporation 2025 Form 10-K | 45

PMI's market share is primarily impacted by competition from government mortgage insurance programs, particularly in segments of the market characterized by lower credit scores. The PMI industry's market share in 2025 decreased compared to the market share in 2024.

Estimated Primary MI Market Share

(% of total primary MI volume)

Year Ended December 31, 2025

Year Ended December 31, 2024

PMI

38.0%

41.1%

FHA

34.3%

33.5%

VA

26.8%

24.5%

USDA

0.9%

0.9%

Source: Inside Mortgage Finance - February 19, 2026 or SEC filings.

MGIC's estimated market share within the PMI industry is shown in the table below.

Estimated MGIC Market Share

(% of total primary private MI volume)

Year Ended December 31, 2025

Year Ended December 31, 2024

MGIC

19.4%

18.6%

Source: Inside Mortgage Finance - February 19, 2026 or SEC filings.

We believe that we currently compete with other private mortgage insurers based on premium rates, underwriting requirements, financial strength (including based on credit or financial strength ratings), customer relationships, name recognition, reputation, strength of management teams and field organizations, and the effective use of technology and innovation in the delivery and servicing of our mortgage insurance products.

Pricing Practices

Pricing has become a key competitive factor in the private mortgage insurance market, with an increasing number of customers prioritizing the lowest premium rate available for any particular loan. The industry has materially reduced its use of standard rate cards, which were fairly consistent among competitors, and correspondingly increased its use of (i) "risk-based pricing systems" that use a spectrum of filed rates to allow for formulaic, risk-based pricing based on multiple attributes that may be quickly adjusted within certain parameters, and (ii) customized rate plans pursuant to which rates may be available to customers for a defined period of time. We monitor various competitive and economic factors while seeking to balance both profitability and market share considerations in developing our pricing strategies. For information about competition in the private mortgage insurance industry, see our risk factor titled “Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and/or increase our losses" in Item 1A.

PMIERs

We operate under the requirements of the GSEs PMIERs and must maintain compliance with these requirements to be eligible to insure loans delivered to or purchased by that GSE. The PMIERs include financial requirements, as well as business, quality control and certain transaction approval requirements. The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs.

The financial requirements of the PMIERs require a mortgage insurer’s “Available Assets” (generally only the most liquid assets of an insurer) to equal or exceed its “Minimum Required Assets” (which are generally based on an insurer’s book of risk in force and calculated from tables of factors with several risk dimensions, reduced for credit given for risk ceded under reinsurance agreements, and subject to a floor amount). Based on our application of the PMIERs as of December 31, 2025, MGIC’s Available Assets totaled $5.7 billion, or $2.5 billion in excess of its Minimum Required Assets.

MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs; however, if our Available Assets fall below our Minimum Required Assets, we would not be in compliance with the PMIERs. Our ability to continue to comply with PMIERS financial requirements could be affected by several factors, including:

•Amendments to PMIERs, or changes to the way the GSEs interpret the existing PMIERs.

•An increase in the number of loan delinquencies. The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans, and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases. If we are required to hold more capital relative to our insured loans it could adversely affect our business and results of operations.

•The credit we receive for the investments in our investment portfolio. Under PMIERs, specified assets are excluded, limited or haircut for purposes of being counted as Available Assets.

•Changes to the amount of credit we receive for risk ceded under our QSR and XOL Transactions. Our reinsurance transactions enable us to earn higher returns on our Minimum Required Assets than we would without them because they generally reduce the Minimum Required Assets we must hold under PMIERs. For additional information see our risk factors titled "Our

MGIC Investment Corporation 2025 Form 10-K | 46

underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring" and "Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions." in Item 1A.

•Failure to meet certain transactional approval conditions imposed by PMIERs. Such failure may restrict or delay us from taking certain actions that would be advantageous to our investors.

GSE Reform

FHFA placed the GSEs into conservatorship on September 7, 2008 and the FHFA has the authority to control and direct their operations. Given that the Director of the FHFA serves at the pleasure of the President, the agency's agenda, policies and actions may be influenced by the then-current administration.

Congress and executive branch officials have periodically proposed various plans for the reform of the GSEs, including through privatization and/or termination of FHFA's conservatorship. However, it is unclear what reforms will ultimately be implemented, if any, and what the time frame for any such reforms will be. The potential impact of any such plan on our business and financial results remains uncertain.

For additional information about the business practices of the GSEs, see our risk factor titled “Changes in the business practices of Fannie Mae and Freddie Mac ("the GSEs"), federal legislation that changes their charters or a restructuring of the GSEs could reduce our revenues or increase our losses.” in Item 1A.

State Regulations

The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to its RIF (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a MPP. MGIC's "policyholder position" includes its net worth or surplus and its contingency reserve.

As of December 31, 2025, MGIC’s risk-to-capital ratio was 10.0 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.6 billion above the required MPP of $2.2 billion. The calculation of our risk-to-capital ratio and MPP reflect full credit for the risk ceded under our reinsurance transactions. It is possible that under the revised State Capital Requirements discussed below, MGIC will not be allowed full credit for the risk ceded under such transactions. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the PMIERs, MGIC may terminate the reinsurance transactions, without penalty.

At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, refer to our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis” in Item 1A for more information about matters that could negatively impact our compliance with State Capital Requirements.

In 2023, the NAIC adopted a revised Mortgage Guaranty Insurance Model Act. The updated Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements. It is uncertain when the revised Model Act will be adopted in any jurisdiction. The provisions of the Model Act, if adopted in their final form, are not expected to have a material adverse effect on our business. It is unknown whether any changes will be made by state legislatures prior to adoption, and the effect changes, if any, will have on the mortgage guaranty insurance market generally, or on our business. Wisconsin, where MGIC is domiciled, has begun the process to replace current Mortgage Insurance regulations with the Model Act; however it is expected that modifications will be made before formal adoption.

Regulatory and Legislative Developments

Credit Score Modernization

Recently, FHFA, the GSEs and industry stakeholders have undertaken efforts to modernize credit scoring. These efforts center on the transition to reportedly more inclusive models that leverage trended and alternative data. In 2022, FHFA announced the validation of two new credit score models – VantageScore 4.0 and FICO 10T. In 2025, FHFA announced that it would permit lenders to deliver mortgage loans to the GSEs using a credit score generated by either the Classic FICO model or the VantageScore 4.0 model but the implementation date remains to be determined. FHFA has indicated that FICO 10T remains an approved credit score model and is planned for future use by the GSEs.

MGIC Investment Corporation 2025 Form 10-K | 47

In 2025, the FHFA also announced that inclusion of VantageScore 4.0 credit scores will not change the GSEs' current credit reporting requirements; however, some industry stakeholders have recently advocated for allowing lenders the option to use a single credit report from one national credit bureau for borrowers above a stated minimum.

While we anticipate some operational impacts when the GSEs finalize their implementation efforts, we do not foresee a material adverse impact on our overall business and financial results

Business Outlook for 2026

Our outlook for 2026 should be viewed against the backdrop of the business environment discussed above.

NIW

Our NIW is affected by total mortgage originations, the percentage of total mortgage originations using PMI (the "PMI penetration rate"), and our market share within the PMI industry. As of January 2026, the total average mortgage origination forecasts from Fannie Mae and the MBA indicate mortgage originations of $2.3 trillion in 2026, compared to an estimated $2.0 trillion in 2025. Both purchase originations and refinance transactions are forecasted to increase in 2026 when compared to 2025. We are expecting NIW to remain relatively flat in 2026 compared to 2025.

The widespread use of risk based pricing systems by the PMI industry makes it more difficult to compare our rates to those offered by our competitors. We may not be aware of industry rate changes until we observe that our volume of NIW has changed. In addition, business under customized rate plans is awarded by certain customers for only limited periods of time. As a result, our NIW may fluctuate more than it had in the past.

IIF

Our IIF increased 2.6% in 2025 and is expected to remain relatively flat in 2026. Our book of IIF is an important driver of our future revenues, and its growth is driven by our ability to generate NIW and the retention of our IIF, as measured by our Annual Persistency. Interest rates influence both our NIW and Annual Persistency. Generally speaking, in a rising rate environment, total mortgage originations may decline; however, we would also expect policy cancellation rates to decline, and in turn increase Annual Persistency, although the impact generally lags the change in interest rates. As of January 2026, forecasts from Fannie Mae and the MBA indicate a decrease in interest rates in 2026 compared to 2025, and a slowdown in the rate of home price appreciation.

Results of Operations

Premiums

Our direct premiums written and earned are impacted by our IIF during the period and our in force premium yield. We expect our in force portfolio premium yield to remain relatively flat in 2026 and we expect our net premiums written and earned to decrease modestly in 2026, driven by an increase in ceded premiums. Premiums earned are also impacted by the amount of accelerated premiums from single premium policy cancellations, which generally decrease as refinance activity decreases.

Our net premiums written and earned are primarily impacted by the changes in the direct premiums written and earned and by the amount of premiums we cede under our quota share and excess of loss reinsurance transactions. The amount of premiums we cede in 2026 will be affected by changes in our reinsurance coverage. Premiums we cede under our quota share transactions are also impacted by the profit commission we receive. The amount of profit commission is variable year-to-year and is dependent on the amount of ceded losses incurred. Increases in ceded losses incurred will benefit our losses incurred line, but will result in lower profit commission and higher ceded premiums.

Factors that affect the amount of premiums we earn from our IIF are further discussed in our "Consolidated Results of Operations - Premium yield."

Investment Income

Net investment income is a material contributor to our results of operations. We expect net investment income in 2026 to be relatively flat compared to 2025. The amount of investment income will be impacted by the change in the yield we can earn on investments and the level of invested assets. The level of invested assets will primarily be impacted by the amount of cash we expect to use in financing activities relative to our cash from operations. The magnitude of any change in our invested asset level will be subject to the timing of our financing activities.

Losses Incurred

Losses incurred, net is impacted by the level of new delinquency notices. Generally, on our primary business, the third and fourth year after loan origination have been periods with the highest level of new delinquency notices. As of December 31, 2025, 44% of our primary RIF was written subsequent to December 31, 2022, 61% of our primary RIF was written subsequent to December 31, 2021, and 80% of our primary RIF was written subsequent to December 31, 2020. The pattern of claim frequency can be affected by many factors, including Annual Persistency and deteriorating economic conditions. Home price appreciation and pre-claim third-party sales have mitigated net losses and LAE in recent years; however, the positive impact of both factors has moderated relative to prior years. We expect net losses and LAE paid to increase; however, the magnitude and timing of their increase is uncertain.

MGIC Investment Corporation 2025 Form 10-K | 48

Underwriting and Operating expenses, net

We expect underwriting and operating expenses, net to be relatively flat in 2026 compared with 2025.

Income Taxes

We expect our 2026 effective tax rate to be approximately 21%.

Key Factors Affecting Our Results

Our current and future business, results of operations and financial condition are impacted by macroeconomic conditions, such as interest rates, home prices, housing demand, level of employment, inflation, pandemics, restrictions on and costs of mortgage credit, and other factors. For additional information on how our business may be impacted see our risk factor titled “Economic downturns and/or declines in home prices may lead to increased losses.”

The future effects of climate change on our business are uncertain. For information about possible effects, please refer to our risk factor titled “The effects of pandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition.”

Our results of operations are affected by:

Premiums Written and Earned

Premiums written and earned during a given period are primarily driven by the insurance in force during all or a portion of the period. A change in the average IIF in the current period compared to an earlier period is a factor that will increase (when the average in force is higher) or reduce (when it is lower) premiums written and earned in the current period, although this effect may be enhanced (or mitigated) by the following factors:

•NIW: Increases IIF and is influenced by the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mortgages from the FHA, the VA, and other mortgage insurers. Other alternatives to mortgage insurance also impact NIW, including GSE programs that may reduce or eliminate the demand for mortgage insurance.

•Cancellations: Reduce IIF and occur when borrowers refinance or achieve the required amount of home equity through loan amortization, loan payoffs, or home price appreciation. Refinance-related cancellations are influenced by the level of current mortgage interest rates compared to the mortgage coupon rates throughout the in force book, current home values relative to values when the loans in the in force book were insured and the terms on which mortgage credit is available. Policy rescissions also cause cancellations requiring us to return any premiums received, from the date of default, on the rescinded policies and claim payments. Cancellations of single premium policies, which are generally non-refundable, result in immediate recognition of any remaining unearned premium.

•Premium rates: Vary by product type, the risk characteristics of the insured loans, competitive pressures, the percentage of coverage on the insured loans, and PMIERs capital requirements. The substantial majority of our monthly and annual mortgage insurance premiums are under premium plans for which, for the first ten years of the policy, the amount of premium is determined by multiplying the initial premium rate by the original loan balance; thereafter, the premium rate resets to a lower rate used for the remaining life of the policy. The remainder of our monthly and annual premiums are under premium plans for which premiums are determined by a fixed percentage of the loan’s amortizing balance over the life of the policy.

•Premiums ceded, net of profit commission: Ceded premiums under our QSR and XOL Transactions, are primarily affected by the percentage of our IIF subject to our reinsurance transactions. The profit commission under our QSR Transactions also varies inversely with the level of ceded losses incurred on a “dollar for dollar” basis and can be eliminated at ceded loss levels higher than what we have experienced on our QSR Transactions. As a result, lower levels of losses incurred result in a higher profit commission and less benefit from ceded losses incurred; higher levels of losses incurred result in more benefit from ceded losses incurred and a lower profit commission (or for certain levels of accident year loss ratios, its elimination). See Note 7 – “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions.

Investment Income

Our investment portfolio is composed principally of investment grade fixed income securities. The primary factors that influence investment income are the size of the portfolio and its yield. As measured by amortized cost (which excludes changes in fair value, such as from changes in interest rates), the size of the investment portfolio is mainly a function of cash generated from (or used in) operations, such as net premiums written, investment income, net claim payments and expenses, and cash provided by (or used for) non-operating activities, such as debt or stock issuances or repurchases, and dividends.

Losses Incurred

Losses incurred are the current expense that reflects claim payments, costs of settling claims, and changes in our estimates of payments that will ultimately be made as a result of delinquencies on insured loans. As explained under “Critical Accounting Estimates” below, we recognize an estimate of this expense only for delinquent loans. The level of new delinquencies has historically followed a seasonal pattern, with new delinquencies in the first half of the year lower than new delinquencies in the latter half of the year. The state

MGIC Investment Corporation 2025 Form 10-K | 49

of the economy, local housing markets, pandemics, natural disasters, and various other factors may result in delinquencies not following the typical pattern. Losses incurred are generally affected by:

•The state of the economy, including unemployment and housing values, each of which affects the likelihood that loans will become delinquent and whether loans that are delinquent cure their delinquency.

•The product mix of the in force book, with loans having higher risk characteristics generally resulting in higher delinquencies and claims.

•The size of loans insured, with higher average loan amounts on delinquent loans tending to increase losses incurred.

•The percentage of coverage on insured loans, with deeper average coverage on delinquent loans tending to increase losses incurred.

•The distribution of claims over the life of a book. Historically, the first few years after loans are originated are a period of relatively low claims, with claims increasing substantially for several years subsequent and then declining. Annual Persistency, the condition of the economy, including unemployment and housing prices, and other factors can affect this pattern. For example, a weak economy or housing value declines can lead to claims from older books increasing, continuing at stable levels or experiencing a lower rate of decline. See further information under “Mortgage insurance earnings and cash flow cycle” below.

•Delinquencies covered by our reinsurance transactions would decrease losses incurred, net. See Note 7 – “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions.

•The rate at which we rescind policies or curtail claims. Our estimated loss reserves incorporate our estimates of future rescissions of policies and curtailments of claims, and reversals of rescissions and curtailments. We collectively refer to such rescissions and denials as “rescissions” and variations of this term. We call reductions to claims "curtailments."

Underwriting and Other Expenses

Underwriting and other expenses includes items such as employee compensation, fees for professional and consulting services, depreciation and maintenance expense, and premium taxes, and are reported net of ceding commissions associated with our QSR Transactions. Employee compensation expenses are variable due to share-based compensation, changes in benefits, and changes in headcount. See Note 7 – “Reinsurance” and Note 14 – “Segment Reporting” to our consolidated financial statements for a discussion of ceding commission on our QSR Transactions and discussion on significant segment expenses.

Interest Expense

Interest expense reflects the interest associated with our outstanding debt obligations discussed in Note 3 – “Debt” to our consolidated financial statements and under “Liquidity and Capital Resources” below.

Other

Certain activities that we do not consider being part of our fundamental operating activities may also impact our results of operations and are described below.

Gains (losses) on investments and other financial instruments:

•Fixed income securities: Investment gains and losses reflect the difference between the amount received on the sale of a fixed income security and the fixed income security’s cost basis, as well as any credit allowances and impairments on securities we intend to sell prior to recovery of its amortized cost basis. The amount received on the sale of fixed income securities is affected by the coupon rate of the security compared to the yield of comparable securities at the time of sale.

•Equity securities: Investment gains and losses reflect the periodic change in fair value.

•Financial instruments: Investment gains and losses on the embedded derivative on our Home Re Transactions reflect the present value impact of the variation in investment income on assets on the insurance-linked notes held by the reinsurance trusts and the contractual reference rate used to calculate the reinsurance premiums we estimate we will pay over the estimated remaining life.

Gains and losses on debt extinguishment:

•Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, and/or improve our debt profile. Extinguishing our outstanding debt obligations early through these discretionary activities may result in gains or losses primarily driven by differences in the payment of consideration from the carrying value, and the write off of unamortized debt issuance costs on the extinguished portion of the debt.

Refer to “Explanation and reconciliation of our use of Non-GAAP financial measures” below to understand how these items impact our evaluation of our core financial performance.

Mortgage Insurance Earnings and Cash Flow Cycle

In general, the majority of any underwriting profit that a book generates occurs in the early years of the book, with the largest portion of any underwriting profit realized in the first year following the year the book was written. Subsequent years of a book may result in either underwriting profit or underwriting losses. This pattern of results typically occurs because relatively few of the incurred losses on

MGIC Investment Corporation 2025 Form 10-K | 50

delinquencies that a book will ultimately experience typically occur in the first few years of the book, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases (primarily due to loan prepayments) and increasing losses. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors may result in delinquencies not following the typical pattern.

Cybersecurity

As part of our business, we maintain large amounts of confidential and proprietary information both on our own servers and those of cloud computing services. This includes personal information of consumers and our employees. Personal information is subject to an increasing number of federal and state laws and regulations regarding privacy and data security, as well as contractual commitments.

Any failure or perceived failure by us, or by the vendors with whom we share this information, to comply with such obligations may result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.

All information technology systems are potentially vulnerable to damage or interruption from a variety of sources, including by cyber attacks, such as those involving ransomware. The Company discovers vulnerabilities and regularly blocks attempts at unauthorized access to its systems, through threats such as malware and computer virus attacks, unauthorized access, system failures and disruptions. Threats have the potential to jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction. We could be similarly affected by threats against our vendors and/or third-parties with whom we share information.

Globally, attacks are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools, techniques, and technological advances that may hinder the Company’s ability to identify, investigate and recover from incidents. Such attacks may also increase as a result of retaliation by threat actors against actions taken by the U.S. and other countries in connection with wars and other global events. The Company operates under a hybrid workforce model and such model may be more vulnerable to security breaches.

While we have information security policies and systems in place to secure our information technology systems and to prevent unauthorized access to or disclosure of sensitive information, there can be no assurance with respect to our systems and those of our third-party vendors that unauthorized access to the systems or disclosure of the sensitive information, either through the actions of third parties or employees, will not occur. Due to our reliance on information technology systems, including ours and those of our customers and third-party service providers, and to the sensitivity of the information that we maintain, unauthorized access to the systems or disclosure of the information could adversely affect our reputation, severely disrupt our operations, result in a loss of business and expose us to material claims for damages and may require that we provide free credit monitoring services to individuals affected by a security breach.

Should we experience an unauthorized disclosure of information or a cyber attack, including those involving ransomware, some of the costs we incur may not be recoverable through insurance, or legal or other processes, and this may have a material adverse effect on our results of operations.

For additional information about our IT systems and cybersecurity, see our risk factor titled “Failed, disrupted, or inadequate information technology systems may materially impact our operations and/or adversely affect our financial results" and "We could be materially adversely affected by a cyber security breach or failure of information security controls." in Item 1A and Item 1C. Cybersecurity.

MGIC Investment Corporation 2025 Form 10-K | 51

Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures

Non-GAAP Financial Measures

We believe that use of the Non-GAAP financial measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors. These measures are not recognized in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance.

Adjusted pre-tax operating income (loss) is defined as GAAP income (loss) before tax, excluding the effects of net realized investment gains (losses), gain and losses on debt extinguishment, and infrequent or unusual non-operating items where applicable.

Adjusted net operating income (loss) is defined as GAAP net income (loss) excluding the after-tax effects of net realized investment gains (losses), gain and losses on debt extinguishment, and infrequent or unusual non-operating items where applicable. The amounts of adjustments to components of pre-tax operating income (loss) are tax effected using a federal statutory tax rate of 21%.

Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss) by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units.

Although adjusted pre-tax operating income (loss) and adjusted net operating income (loss) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items represent items that are: (1) not viewed as part of the operating performance of our primary activities; or (2) impacted by both discretionary and other economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, along with the reasons for their treatment, are described below. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these adjustments. Other companies may calculate these measures differently. Therefore, their measures may not be comparable to those used by us.

(1)Net realized investment gains (losses). The recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles.

(2)Gains and losses on debt extinguishment. Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, and/or improve our debt profile.

(3)Infrequent or unusual non-operating items. Items that are non-recurring in nature and are not part of our primary operating activities.

MGIC Investment Corporation 2025 Form 10-K | 52

Non-GAAP Reconciliations

Reconciliation of Income before Tax / Net Income to Adjusted Pre-Tax Operating Income / Adjusted Net Operating Income:

Years Ended December 31,

2025

2024

(in thousands)

Pre-tax

Tax Effect

Net

(after-tax)

Pre-tax

Tax Effect

Net

(after-tax)

Income before tax / Net income

$

928,537 

$

190,190 

$

738,347 

968,709 

205,715 

762,994 

Adjustments:

Net realized investment (gains) losses

75 

16 

59 

6,914 

1,452 

5,462 

Adjusted pre-tax operating income / Adjusted net operating income

$

928,612 

$

190,206 

$

738,406 

$

975,623 

$

207,167 

$

768,456 

Reconciliation of Net Income per Diluted Share to Adjusted Net Operating Income per Diluted Share:

Weighted average shares - diluted

235,099 

263,995 

Net income per diluted share

$

3.14 

$

2.89 

Net realized investment (gains) losses

0.00 

0.02 

Adjusted net operating income per diluted share

$

3.14 

$

2.91 

MGIC Investment Corporation 2025 Form 10-K | 53

Mortgage Insurance Portfolio

New Insurance Written

NIW in 2025 was $60.2 billion compared with $55.7 billion in the prior year. The increase for the year ended December 31, 2025 reflects a higher expected market position compared with the same period in the prior year.

Even when home prices are stable or rising, mortgages with certain characteristics have higher probabilities of claims. In general, these characteristics include mortgages with high LTV and DTI ratios and low credit scores, which are determined at the time of loan origination. When home prices increase, interest rates increase and/or the percentage of our NIW from purchase transactions increases, our NIW on mortgages with DTI ratios over 45% and LTVs over 95% may fluctuate. We consider a variety of loan characteristics when assessing the risk of a loan.

The following tables provide information about loan characteristics associated with our NIW.

Primary NIW by FICO Score

Years Ended December 31,

(% of primary NIW)

2025

2024

760 and greater

51.7 

%

50.9 

%

740 - 759

17.4 

%

17.4 

%

720 - 739

13.2 

%

13.5 

%

700 - 719

8.7 

%

9.1 

%

680 - 699

4.9 

%

5.2 

%

660 - 679

2.7 

%

2.8 

%

640 - 659

0.9 

%

0.8 

%

639 and less

0.5 

%

0.3 

%

Total

100.0 

%

100.0 

%

Primary NIW by Loan-to-Value

Years Ended December 31,

(% of primary NIW)

2025

2024

95.01% and above

14.7 

%

13.7 

%

90.01% to 95.00%

46.2 

%

47.3 

%

85.01% to 90.00%

28.6 

%

27.7 

%

80.01% to 85%

10.5 

%

11.3 

%

Total

100.0 

%

100.0 

%

Primary NIW by Debt-to-Income Ratio

Years Ended December 31,

(% of primary NIW)

2025

2024

45.01% and above

27.0 

%

28.9 

%

38.01% to 45.00%

30.5 

%

31.6 

%

38.00% and below

42.5 

%

39.5 

%

Total

100.0 

%

100.0 

%

Primary NIW by Policy Payment Type

Years Ended December 31,

(% of primary NIW)

2025

2024

Monthly premiums

97.3 

%

97.6 

%

Single premiums

2.7 

%

2.4 

%

Total

100.0 

%

100.0 

%

MGIC Investment Corporation 2025 Form 10-K | 54

Primary NIW by Type of Mortgage

Years Ended December 31,

(% of primary NIW)

2025

2024

Purchases

90.9 

%

96.0 

%

Refinances

9.1 

%

4.0 

%

Total

100.0 

%

100.0 

%

The following table provides information about loans with one or more of the following characteristics associated with our NIW: LTV ratios greater than 95%, borrowers having FICO scores below 680, and borrowers having DTI ratios greater than 45%, each attribute as determined at the time of loan origination.

Primary NIW by Number of Attributes Discussed Above

Years Ended December 31,

(% of primary NIW)

2025

2024

One

36.2 

%

36.3 

%

Two or More

4.7 

%

5.0 

%

Insurance in Force and Risk in Force

The amount of our IIF and RIF is impacted by the amount of NIW, cancellations, and principal payments received on our primary IIF during the period. Cancellation activity is impacted by refinancing activity, policies cancelled when borrowers achieve the required amount of home equity, and cancellations due to claim payment. Refinancing activity has historically been affected by the level of mortgage interest rates and the level of home price appreciation. Cancellations generally move inversely to the change in the direction of interest rates, although they generally lag a change in direction. The following table presents a summary of the change in our IIF and RIF for the periods indicated.

Primary Insurance in Force and Risk in Force

Years Ended December 31,

($ in billions)

2025

2024

NIW

$

60.2 

$

55.7 

Cancellations, principal payments, and other reductions

(52.5)

(53.8)

Increase (decrease) in primary IIF

$

7.7 

$

1.9 

Direct primary IIF as of December 31,

$

303.1 

$

295.4 

Direct primary RIF as of December 31,

$

81.2 

$

78.8 

The composition of our primary RIF and IIF by policy year is shown below for the periods indicated.

Primary Insurance in Force and Risk in Force by Policy Year

As of December 31,

($ in millions)

2025

2024

Policy year

Insurance in force

Risk in Force

Insurance in Force

Risk in Force

2004 and prior

$

1,013 

$

288 

$

1,155 

$

327 

2005 - 2008

7,735

2,069

8,655

2,312

2009 - 2019

21,084 

5,582 

27,233 

7,225

2020

29,369 

8,109 

37,968 

10,375 

2021

56,502 

15,795 

69,839 

18,992 

2022

51,788 

13,992 

59,317 

15,865 

2023

33,023 

8,602 

38,978 

10,109 

2024

46,960 

12,266 

52,252 

13,608 

2025

55,610 

14,521 

— 

— 

Total

$

303,084 

$

81,224 

$

295,397 

$

78,813 

MGIC Investment Corporation 2025 Form 10-K | 55

The following table sets forth portfolio statistics associated with our primary IIF and RIF as of December 31, 2025.

Portfolio Statistics by Policy Year

Weighted Avg. Interest Rate

Delinquency Rate %

Cede Rate % (1)

% of Original Remaining IIF

Policy Year

2004 and prior

7.3 

%

12.4 

%

— 

%

N.M.

2005-2008

7.0 

%

9.3 

%

— 

%

3.2 

%

2009-2019

4.3 

%

4.2 

%

— 

%

5.4 

%

2020

3.2 

%

1.7 

%

5.0 

%

25.7 

%

2021

3.1 

%

2.2 

%

27.5 

%

47.9 

%

2022

4.9 

%

2.5 

%

30.9 

%

69.8 

%

2023

6.6 

%

2.0 

%

26.8 

%

71.8 

%

2024

6.6 

%

1.3 

%

30.6 

%

83.5 

%

2025

6.5 

%

0.3 

%

39.3 

%

94.6 

%

(1)Cede Rate % is calculated as the risk in force ceded to our QSR Transactions divided by the total risk in force.

Credit Profile of Our Primary RIF

Our 2009 and later books possess significantly improved risk characteristics when compared to our 2005-2008 books. We believe changes such as more rigorous underwriting standards, higher quality credit profiles, strengthened mortgage loan servicing, and government support to help borrowers stay in their homes, have led to improved credit performance on our 2009 and later books. For additional information on the composition of our primary RIF see "Our Products and Services - Business"

Annual Persistency

Our Annual Persistency was 84.8% at December 31, 2025 and December 31, 2024. Since 2018, our Annual Persistency ranged from a high of 86.3% at September 30, 2023 to a low of 60.7% at March 31, 2021. Our persistency rate is primarily affected by the level of current mortgage interest rates compared to the mortgage coupon rates on our IIF, which affects the vulnerability of the IIF to refinancing; and the current amount of equity that borrowers have in the homes underlying our IIF.

CRT Programs

In connection with the GSEs CRT programs, an insurance subsidiary of MGIC provides insurance and reinsurance covering portions of the credit risk related to certain reference pools of mortgages acquired by the GSEs. Our RIF, as reported to us, related to these programs was approximately $482 million and $392 million as of December 31, 2025 and December 31, 2024, respectively.

MGIC Investment Corporation 2025 Form 10-K | 56

Consolidated Results of Operations

The following section of the MD&A provides a comparative discussion of our Consolidated Results of Operations for the two-year period ended December 31, 2025. For a discussion of the Critical Accounting Estimates used by us that affect the Consolidated Results of Operations, see "Critical Accounting Estimates" below.

Summary Results of Operations

Year Ended December 31,

(in thousands, except per share data and effective tax rate)

2025

2024

Change

Revenues

Net premiums earned

$

965,812 

$

970,807 

(1)

%

Net investment income

246,258 

244,640 

1 

%

Net gains (losses) on investments and other financial instruments

334 

(9,846)

N/M

Other revenue

1,232 

2,130 

(42)

%

Total revenues

1,213,636 

1,207,731 

0 

%

Losses and expenses

Losses incurred, net

48,903 

(14,861)

N/M

Underwriting and other expenses, net

200,593 

218,281 

(8)

%

Interest expense

35,603 

35,602 

0 

%

Total losses and expenses

285,099 

239,022 

19 

%

Income before tax

928,537 

968,709 

(4)

%

Provision for income taxes

190,190 

205,715 

(8)

%

Net income

$

738,347 

$

762,994 

(3)

%

Net income per diluted share

$

3.14 

$

2.89 

9 

%

Effective tax rate

20.5 

%

21.2 

%

(0.7) bps

Non-GAAP Financial Measures (1)

Adjusted pre-tax operating income

$

928,612 

$

975,623 

(5)

%

Adjusted net operating income

738,406 

768,456 

(4)

%

Adjusted net operating income per diluted share

$

3.14 

$

2.91 

8 

%

(1)See "Explanation and Reconciliation of our use of Non-GAAP Financial Measures."

Net income for 2025 was $738.3 million (2024: $763.0 million) and diluted income per share was $3.14 (2024: $2.89). The decrease in net income is primarily due to an increase in losses incurred, net, partially offset by a decrease in underwriting and other expenses, net, and a decrease in the provision for income taxes. Diluted income per share increased primarily due to a decrease in the number of diluted weighted shares outstanding partially offset by a decrease in net income.

Adjusted net operating income for 2025 was $738.4 million (2024: $768.5 million) and adjusted net operating income per diluted share was $3.14 (2024: $2.91). The decrease in adjusted net operating income in 2025 compared to 2024 is primarily reflects a decrease in net income. The increase in adjusted net operating income per diluted share primarily reflects a decrease in the number of diluted weighted shares outstanding partially offset by a decrease in adjusted net operating income.

MGIC Investment Corporation 2025 Form 10-K | 57

Revenues

Net Premiums Earned

Premium yield

Net premium yield is net premiums earned divided by average IIF during the period. The following table presents the key drivers of our net premium yield for 2025 and 2024.

Premium Yield

Year Ended December 31,

(in basis points)

2025

2024

In force portfolio yield (1)

38.1 

38.4 

Premium refunds

(0.2)

0.0 

Accelerated earnings on single premium policies

0.2 

0.3 

Total direct premium yield

38.1 

38.7 

Ceded premiums earned, net of profit commission and assumed premiums (2)

(5.9)

(5.7)

Net premium yield

32.2 

33.0 

(1) Total direct premiums earned, excluding premium refunds and accelerated premiums from single premium policy cancellations divided by average primary insurance in force.

(2) Assumed premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.5 bps in 2025 and 0.5 bps in 2024.

The key drivers of our net premium yield are listed below:

In force Portfolio Yield

è

The yield on our current IIF is impacted by the premium rates on our IIF. Premium rates are generally affected by risk characteristics on our NIW, competition in the industry, and the amount of capital we are required to hold.

Premium Refunds

è

Premium refunds are primarily driven by our estimate of refundable premiums on our delinquency inventory and claim activity. Our estimate of refundable premium on our delinquency inventory fluctuates with changes in our delinquency inventory and our estimate of the number of loans in our delinquency inventory that will result in a claim. Lower levels of claims received results in a lower level of premium refunds.

Accelerated earnings on single premium policies

è

The benefit from accelerated earned premium from cancellation of single premium policies prior to their estimated policy life is influenced by the level of refinance activity during a given period. An elevated level of refinance activity increases the benefit received from accelerated earned premium while a low level of refinance activity reduces the benefit from accelerated earned premium.

Ceded premiums earned, net of profit commission and assumed premiums

è

Ceded premiums earned, net of profit commission adversely impact our net premium yield. Ceded premiums earned, net of profit commission, are associated with the QSR Transactions and the XOL Transactions. Assumed premiums consists primarily of premiums from GSE CRT programs. See “Reinsurance Transactions“ below for further discussion on our reinsurance transactions.

As discussed in our risk factor titled "Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and/or increase our losses," the private mortgage insurance industry is highly competitive and premium rates have declined over the past several years. We expect our in force portfolio premium yield will remain relatively flat in 2026 driven by sustained high credit quality and an elevated Annual Persistency.

See "Overview – Factors Affecting Our Results" above for additional factors that also influence the amount of net premiums written and earned in a year.

Reinsurance Transactions

Quota Share Reinsurance

Our quota share reinsurance affects various lines of our statements of operations and therefore we believe it should be analyzed by reviewing its total effect on our pre-tax income, described as follows.

•We cede a fixed percentage of premiums earned and received on insurance covered by the transactions.

•We receive the benefit of a profit commission through a reduction in the premiums we cede. The profit commission varies inversely with the level of losses incurred on a "dollar for dollar" basis and can be eliminated at loss levels higher than what we

MGIC Investment Corporation 2025 Form 10-K | 58

have experienced on the QSR Transactions. As a result, lower levels of ceded losses incurred result in less benefit from ceded losses incurred, and a higher profit commission; higher levels of ceded losses incurred result in more benefit from ceded losses incurred and a lower profit commission (or for certain levels of accident year loss ratios, its elimination).

•We receive the benefit of a ceding commission through a reduction in underwriting expenses equal to 20% of premiums ceded (before the effect of the profit commission).

•We cede a fixed percentage of losses incurred on insurance covered by the transactions.

The following table provides information related to our QSR Transactions for 2025 and 2024.

Quota Share Reinsurance

As of and For the Years Ended December 31,

($ in thousands)

2025

2024

Ceded premiums written and earned, net of profit commission

$

128,853 

$

115,306 

% of direct premiums written

12 

%

10 

%

% of direct premiums earned

11 

%

10 

%

Profit commission

121,942 

108,368 

Ceding commissions

50,105 

44,532 

Ceded losses incurred

28,402 

20,607 

Mortgage insurance portfolio:

Ceded RIF (in millions)

2021 QSR

3,781 

5,180 

2022 QSR

3,578 

4,252 

2023 QSR

1,812 

2,116 

2024 QSR

3,139 

3,575 

2025 QSR

5,062 

N/A

Credit Union QSR

3,218 

2,855 

Total ceded RIF

$

20,590 

$

17,978 

The increase in profit commission in 2025 was primarily due to an increase in premiums ceded under our QSR Transactions, offset by an increase in losses incurred. 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.

We executed two 40% QSR Transactions with groups of unaffiliated reinsurers covering eligible NIW in 2026 and NIW in 2027. Additionally, we amended the terms on our 2022 quota share reinsurance transaction with certain participants from the existing reinsurance panel. The quota share cede rate decreased from 30% to 28%, effective December 31, 2025.

Covered Risk

The percentages of our NIW, new risk written, IIF, and RIF subject to our QSR Transactions as shown in the following table will vary from period to period in part due to the mix of our risk written during the period and the number of active QSR Transactions.

Quota Share Reinsurance

As of and For the Years Ended December 31,

2025

2024

NIW subject to QSR Transactions

87.2 

%

86.9 

%

New Risk Written subject to QSR Transactions

93.1 

%

92.9 

%

IIF subject to QSR Transactions

73.8 

%

68.2 

%

RIF subject to QSR Transactions

77.1 

%

71.5 

%

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”). For policies covered by our XOL Transactions, we retain the first layer of the aggregate losses paid, and the reinsurers will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. The reinsurance coverage is subject to adjustment based on the risk characteristics of the covered loans until the initial excess of loss reinsurance coverage layer has been finalized. Our XOL Transactions provide reinsurance coverage for a portion of the risk associated with certain mortgage insurance policies having insurance coverage in force dates from January 1, 2020 through December 31, 2025.

MGIC Investment Corporation 2025 Form 10-K | 59

The calculated credit for XOL Transactions under PMIERs is generally based on the PMIERs requirement of the covered loans and the attachment and detachment point of the coverage. PMIERs credit is haircut for the uncollateralized portion of the reinsured risk and is generally not given for the reinsured risk above the PMIERs requirement. The current attachment, current detachment, and PMIERs required asset credit for each of our XOL Transactions as of December 31, 2025, are as follows:

($ In thousands)

Initial Attachment % (1)

Initial Detachment % (2)

Current Attachment % (1)

Current Detachment % (2)

PMIERs Required Asset Credit

2025 Traditional XOL

2.53%

6.53%

2.53%

6.53%

$

146,038 

2024 Traditional XOL

2.67%

6.67%

3.03%

7.58%

180,004 

2023 Traditional XOL

2.91%

6.91%

3.76%

7.27%

61,723 

2022 Traditional XOL

2.60%

7.10%

3.27%

7.47%

96,471 

2021 Traditional XOL

1.25%

3.48%

1.32%

3.67%

240,346 

2020 Traditional XOL

0.75%

3.50%

0.93%

4.33%

240,883 

Home Re 2023-1

3.00%

6.75%

3.79%

7.25%

205,355 

Home Re 2022-1

2.75%

6.75%

4.54%

7.50%

164,661 

Home Re 2021-2

2.10%

6.50%

5.00%

7.26%

64,312 

(1) The percentage represents the cumulative losses as a percentage of adjusted risk in force that MGIC retains prior to the XOL taking losses.

(2) The percentage represents the cumulative losses as a percentage of adjusted risk in force that must be reached before MGIC begins absorbing losses after the XOL layer.

In 2025, we executed an XOL Transaction which will provide up to $184 million of reinsurance coverage on NIW in 2026.

In January 2026, through an insurance linked note transaction, we executed a $324 million excess of loss reinsurance agreement that covers certain policies written between January 1, 2022 and March 31, 2025.

Ceded premiums on our XOL Transactions were $61.1 million and $66.6 million for the years ended December 31, 2025 and 2024, respectively.

See Note 7 - "Reinsurance," to our consolidated financial statements for additional discussion of our XOL Transactions.

Investment Income

Net investment income increased 1% to $246.3 million in 2025 compared to $244.6 million in 2024. See "Balance Sheet Review" in this MD&A for further discussion regarding our investment portfolio.

Losses and Expenses

Losses Incurred, Net

As discussed in “Critical Accounting Estimates” below and consistent with industry practices, we establish case loss reserves for future claims on delinquent loans that were reported to us as two payments past due and have not become current or resulted in a claim payment. Such loans are referred to as being in our delinquency inventory. Case loss reserves are established based on estimating the number of loans in our delinquency inventory that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity.

IBNR reserves are established for estimated losses from delinquencies we estimate have occurred prior to the close of an accounting period, but have not yet been reported to us. IBNR reserves are also established using estimated claim rates and claim severities.

Estimation of losses is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment and the current and future strength of local housing markets; exposure on insured loans; the amount of time between delinquency and claim filing (all else being equal, the longer the period between delinquency and claim filing, the greater the severity); the effectiveness of loss mitigation efforts; and curtailments and rescissions. The actual amount of the claim payments may be substantially different than our loss reserve estimates.

Our estimates could be adversely affected by several factors, including a deterioration of regional or national economic conditions, including unemployment, which may reduce borrowers' income and their ability to make mortgage payments. Additionally, the impact of past and future government initiatives and actions taken by the GSEs to keep borrowers in their homes may impact our estimates. A decline in housing values may affect borrowers' willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Loss reserves in future periods will also be dependent on the number of loans reported to us as delinquent. Changes in our estimates arising from the factors described above or due to other unforeseen circumstances could materially affect our financial results, even in a stable economic environment.

MGIC Investment Corporation 2025 Form 10-K | 60

Generally, losses follow a seasonal trend in which the second half of the year has weaker credit performance than the first half, with higher new notice activity and a lower cure rate. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors, may result in delinquencies not following the typical pattern.

For information on how pandemics and natural disasters could affect losses incurred, net see our risk factors titled “The effects of pandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition." As discussed in our risk factor titled “Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods” if we have not received a notice of delinquency with respect to a loan and if we have not estimated the loan to be delinquent as of December 31, 2025, through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan.

The following table details the financial impact of the significant components of losses incurred for the periods indicated.

Composition of Losses Incurred

Year Ended December 31,

($ in thousands)

2025

2024

Current year / New notices

$

204,082 

$

197,615 

Prior year reserve development

(155,179)

(212,476)

Losses incurred, net

$

48,903 

$

(14,861)

Loss Ratio

5.1 

%

(1.5)

%

The favorable development for both periods primarily resulted from a decrease in the expected claim rate on previously received delinquencies. Home price appreciation experienced in recent years has allowed some borrowers to cure their delinquencies through the sale of their property.

See "New notice activity" and "Claims severity" below for additional factors and trends that impact these loss reserve assumptions

Delinquency Inventory

A roll-forward of our primary delinquency inventory for the years ended December 31, 2025 and 2024 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.

Delinquency Inventory Roll-Forward

2025

2024

Beginning delinquent inventory

26,791 

25,650 

New notices

53,006 

51,427 

Cures

(51,015)

(48,731)

Paid claims

(1,371)

(1,318)

Rescissions and denials

(91)

(84)

Other items removed from inventory

(248)

(153)

Ending delinquent inventory

27,072 

26,791 

MGIC Investment Corporation 2025 Form 10-K | 61

New Notice Activity

The table below presents our new notices received, delinquency inventory, and the average number of missed payments for the loans in our delinquency inventory by policy year:

New Notices and Delinquency Inventory during the Period

December 31, 2025

Policy Year

New Notices Received in the Year Ended

Delinquency Inventory

Avg. Number of Missed Payments of Delinquency Inventory

2004 and prior

2,685 

1,557 

14

2005-2008

8,368 

4,871 

14

2009-2015

1,295 

741 

9

2016

1,146 

518 

8

2017

2,077 

1,005 

7

2018

2,742 

1,424 

7

2019

2,773 

1,369 

7

2020

5,022 

2,268 

6

2021

10,062 

4,739 

6

2022

8,238 

4,227 

6

2023

4,063 

2,044 

6

2024

3,779 

1,844 

5

2025

756 

465 

3

Total

53,006 

27,072 

8

Claim rate on new notices (1)

7.5 

%

December 31, 2024

Policy Year

New Notices Received in the Year Ended

Delinquency Inventory

Avg. Number of Missed Payments of Delinquency Inventory

2004 and prior

3,077 

1,793 

15

2005-2008

9,707 

5,857 

15

2009-2015

1,889 

976 

10

2016

1,576 

772 

8

2017

2,516 

1,205 

7

2018

3,078 

1,628 

7

2019

3,058 

1,505 

7

2020

5,304 

2,421 

6

2021

10,096 

4,796 

6

2022

7,409 

3,803 

5

2023

2,831 

1,464 

4

2024

886 

571 

3

Total

51,427 

26,791 

9

Claim rate on new notices (1)

7.5 

%

(1) Claim rate at the time new delinquency notices are received.

Claims Severity

Factors that impact claim severity include:

è

economic conditions at that time, including home prices compared to home prices at the time of placement of coverage

è

exposure on the loan, which is the unpaid principal balance of the loan times our insurance coverage percentage,

è

length of time between delinquency and claim filing (which impacts the amount of interest and expenses, with a longer period between default and claim filing generally increasing severity), and

è

curtailments.

As discussed in Note 8 - "Loss Reserves," our loss reserves estimates take into consideration trends over time, because the development of the delinquencies may vary from period to period without establishing a meaningful trend. In recent years, an increase in third party property sales, prior to claim settlement has resulted in a decrease in the average claim paid and the average claim paid as

MGIC Investment Corporation 2025 Form 10-K | 62

a percentage of exposure. We expect average claims paid as a percentage of exposure to increase as we receive delinquencies that have not experienced the same level of home price appreciation. The extent and timing of their increase is uncertain.

The majority of loans insured prior to 2014 (which represent 24% of the loans in the delinquency inventory) are covered by master policy terms that, except under certain circumstances, do not limit the number of years that an insured can include interest when filing a claim. Under our current master policy terms, an insured can include accumulated interest when filing a claim only for the first three years the loan is delinquent. In each case, the insured must comply with its obligations under the terms of the applicable master policy.

Claims Severity Trend

Period

Average exposure on claim paid

Average claim paid

% Paid to exposure

Average number of missed payments at claim received date

Q4 2025

$

59,228 

$

46,061 

77.8 

%

29 

Q3 2025

55,846 

39,689 

71.1 

%

30 

Q2 2025

50,411 

36,536 

72.5 

%

30 

Q1 2025

55,297 

38,826 

70.2 

%

34 

Q4 2024

51,368 

34,042 

66.3 

%

35 

Q3 2024

47,779 

27,249 

57.0 

%

34 

Q2 2024

49,623 

30,578 

61.6 

%

36 

Q1 2024

45,284 

28,267 

62.4 

%

40 

See Note 8 – “Loss Reserves” to our consolidated financial statements and “Critical Accounting Estimates” below for a discussion of our losses incurred and claims paying practices (including curtailments).

The table below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim.

Delinquency Inventory - Consecutive Months Delinquent

December 31,

2025

2024

3 months or less

10,389 

10,352 

4 - 11 months

9,559 

9,281 

12 months or more (1)

7,124 

7,158 

Total

27,072 

26,791 

3 months or less

38 

%

38 

%

4 - 11 months

35 

%

35 

%

12 months or more

27 

%

27 

%

Total

100 

%

100 

%

(1)Approximately 22% and 27% of the delinquency inventory that has been delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of December 31, 2025 and 2024, respectively.

The length of time a loan is in the delinquency inventory can differ from the number of payments that the borrower has not made or is considered delinquent. These differences typically result from a borrower making monthly payments that do not result in the loan becoming fully current. Generally, a defaulted loan with more missed payments is more likely to result in a claim. The number of payments that a borrower is delinquent is shown in the following table.

MGIC Investment Corporation 2025 Form 10-K | 63

Delinquent Inventory - Number of Payments Delinquent

2025

2024

3 payments or less

14,121 

14,135 

4 - 11 payments

8,747 

8,392 

12 payments or more (1)

4,204 

4,264 

Total

27,072 

26,791 

3 payments or less

52 

%

53 

%

4 - 11 payments

32 

%

31 

%

12 payments or more

16 

%

16 

%

Total

100 

%

100 

%

(1)Approximately 16% and 25% of the loans in the delinquency inventory with 12 payments or more delinquent have at least 36 payments delinquent as of December 31, 2025, and 2024, respectively.

Net Losses and LAE Paid

Net losses and LAE paid increased $12 million in 2025 when compared with 2024, primarily driven by an increase in average claim paid. The primary average claim paid can vary materially from period to period based upon a variety of factors, including the local market conditions, average loan amount, average coverage percentage, the amount of time between delinquency and claim filing, and our loss mitigation efforts on loans for which claims are paid. Home price appreciation and pre-claim third-party sales have mitigated net losses and LAE in recent years; however, the positive impact of both factors has moderated relative to prior years We expect net losses and LAE paid to increase; however, the magnitude and timing of their increase is uncertain.

The following table presents our net losses and LAE paid in 2025 and 2024.

Net Losses and LAE Paid

(in millions)

2025

2024

Direct primary (excluding settlements)

$

55 

$

39 

NPL settlements

4 

2 

Reinsurance

(9)

(3)

LAE and other

5 

7 

Reinsurance terminations (1)

(1)

(3)

Net losses and LAE paid

$

54 

$

42 

(1)See Note 7 - "Reinsurance" for additional information on our reinsurance terminations

Loss Reserves

The gross loss reserves as of December 31, 2025, and 2024 appear in the table below.

Gross Loss Reserves

December 31,

2025

2024

Primary (in millions):

Direct case loss reserves

$

412 

$

402 

Direct IBNR and LAE reserves

60 

58 

Total primary direct loss reserves

472 

460 

Ending delinquent inventory (count based)

27,072 

26,791 

Percentage of loans delinquent (delinquency rate)

2.43 

%

2.40 

%

Average total primary loss reserves per delinquency

$

17,449 

$

17,159 

Primary claims received inventory included in ending delinquent inventory (count based)

398 

319 

MGIC Investment Corporation 2025 Form 10-K | 64

The primary delinquency inventory for the top 15 jurisdictions (based on December 31, 2025 delinquency inventory) at December 31, 2025 and 2024 appears in table the below.

Primary Delinquency Inventory by Jurisdiction

2025

2024

Florida *

2,291 

2,648 

Texas

2,245 

2,207 

Illinois *

1,769 

1,762 

California

1,623 

1,499 

Pennsylvania *

1,522 

1,504 

Michigan

1,301 

1,231 

Ohio *

1,276 

1,268 

New York *

1,204 

1,229 

Georgia

1,040 

1,025 

Maryland

807 

655 

New Jersey *

783 

753 

North Carolina

766 

880 

Indiana *

693 

690 

Minnesota

651 

616 

Virginia

581 

526 

All other jurisdictions

8,520 

8,298 

Total

27,072 

26,791 

Note: Asterisk denotes jurisdictions in the table above that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.

The primary average RIF on delinquent loans as of December 31, 2025 and 2024 for the top 5 jurisdictions (based on December 31, 2025 delinquency inventory) appears in the following table.

Primary Average RIF - Delinquent Loans

2025

2024

Florida

$

73,620 

$

70,377 

Texas

68,787 

63,943 

Illinois

48,443 

46,311 

California

114,904 

109,226 

Pennsylvania

48,413 

45,227 

All other jurisdictions

59,991 

56,525 

Total all jurisdictions

$

63,760 

$

60,148 

The primary average RIF on all loans was $72,995 and $70,475 at December 31, 2025 and December 31, 2024, respectively. The increase is primarily due to an increase in the average loan balances in recent years.

MGIC Investment Corporation 2025 Form 10-K | 65

The primary delinquency inventory by policy year at December 31, 2025 and 2024 appears in the following table.

Primary Delinquency Inventory by Policy Year

2025

2024

2004 and prior

1,557 

1,793 

2004 and prior %:

6 

%

7 

%

2005 - 2008

4,871 

5,857 

2005 - 2008 %

18 

%

22 

%

2009 - 2015

741 

976 

2009 - 2015 %

3 

%

3 

%

2016

518 

772 

2017

1,005 

1,205 

2018

1,424 

1,628 

2019

1,369 

1,505 

2020

2,268 

2,421 

2021

4,739 

4,796 

2022

4,227 

3,803 

2023

2,044 

1,464 

2024

1,844 

571 

2025

465 

— 

2016 and later %:

73 

%

68 

%

Total

27,072 

26,791 

Generally, on our primary business, the third and fourth year after loan origination have been periods with the highest level of new delinquency notices. Factors such as Annual Persistency and deteriorating economic conditions can impact the level and frequency of new notices we receive during a given period. As of December 31, 2025, 44% of our primary RIF was written subsequent to December 31, 2022, 61% of our primary RIF was written subsequent to December 31, 2021, and 80% of our primary RIF was written subsequent to December 31, 2020.

Underwriting and Other Expenses, Net

Underwriting and other expenses includes items such as employee compensation costs, outside service expenses, premium taxes, and depreciation and maintenance expense, and are reported net of ceding commissions.

Underwriting and other expenses, net for 2025 decreased to $200.6 million from $218.3 million in 2024. The decrease was primarily due to a decrease in employee costs. See Note 14. - "Segment Reporting" to our consolidated financial statements for a discussion around significant segment expenses.

Year Ended December 31,

2025

2024

Underwriting expense ratio

21.4 

%

23.0 

%

The underwriting expense ratio is the ratio, expressed as a percentage, of the underwriting and operating expenses, net and amortization of DAC to net premiums written. The underwriting expense ratio decreased in 2025 compared with 2024 due to a decrease in underwriting and operating expenses, net, and an increase in net premiums written.

Income Tax Expense and Effective Tax Rate

Our provision for income taxes for 2025 decreased to $190.2 million from $205.7 million in 2024 primarily due to a decrease in income before tax and a benefit recognized for the purchase of transferable federal tax credits. Our effective tax rate for 2025 and 2024 approximated the federal statutory income tax rate of 21%. See Note 16 – “Income Taxes” to our consolidated financial statements for a discussion of our tax position.

MGIC Investment Corporation 2025 Form 10-K | 66

Balance Sheet Review

The following sections focus on the assets and liabilities experiencing major developments in 2025.

Consolidated Balance Sheets - Assets

As of December 31,

(in thousands)

2025

2024

% Change

Investments

$

5,807,662 

$

5,867,560 

(1)

Cash and cash equivalents

368,989 

229,485 

61 

Reinsurance recoverable on loss reserves (1)

65,055 

47,281 

38 

Deferred incomes taxes, net

18,512 

69,875 

(74)

Other assets

379,268 

333,034 

14 

Total Assets

$

6,639,486 

$

6,547,235 

1 

(1) See "Liabilities and Equity" section below for further discussion.

Investment Portfolio - Our investment portfolio primarily consists of a diverse mix of highly rated fixed income securities. The return we generate on our investment portfolio is an important component of our consolidated financial results. The investment portfolio is designed to achieve the following objectives:

Operating Companies (1)

Holding Company

è

Preserve PMIERs assets

è

Provide liquidity with minimized realized loss

è

Maximize total return with emphasis on book yield, subject to our other objectives

è

Maintain highly liquid, low volatility assets

è

Limit portfolio volatility

è

Maintain high credit quality

è

Duration 3.5 to 5.5 years

è

Duration maximum of 2.5 years

(1)Primarily MGIC

To achieve our portfolio objectives, our asset allocation considers the risk and return parameters of the various asset classes in which we invest. This asset allocation is informed by, and based on, the following factors:

è

economic and market outlooks;

è

diversification effects;

è

security duration;

è

liquidity;

è

capital considerations; and

è

income tax rates.

The average duration and embedded investment yield of our investment portfolio as of December 31, 2025 and 2024 is shown in the following table.

Portfolio Duration and Embedded Investment Yield

December 31,

2025

2024

Effective Duration (in years)

4.2

3.9

Pre-tax yield (1)

4.0%

4.0%

After-tax yield (1)

3.2%

3.2%

(1)Embedded investment yield is calculated on a yield-to-worst basis.

The credit risk of a security is evaluated through analysis of the security's underlying fundamentals, including the issuer's sector, scale, profitability, debt coverage, and ratings. Our investment policy guidelines limit the amount of our credit exposure to any one issue, issuer and type of instrument. The following table shows the security ratings of our fixed income investments as of December 31, 2025 and 2024.

MGIC Investment Corporation 2025 Form 10-K | 67

Fixed income security ratings

Security Ratings (1)

December 31, 2025

December 31, 2024

AAA

12%

10%

AA

36%

34%

A

34%

36%

BBB

18%

20%

(1)Ratings are provided by one or more of: Moody's, Standard & Poor's and Fitch Ratings. If three ratings are available, the middle rating is used, otherwise the lowest rating is used.

Our investment portfolio was invested in comparable security types for the years ended December 31, 2025 and December 31, 2024. See Note 5 – “Investments” to our consolidated financial statements for additional disclosure on our investment portfolio.

Investments Outlook

The Federal Open Market Committee ("FOMC") reduced the federal funds rate three times in 2025, taking the rate from 4.50% to 3.75%. The FOMC held the federal funds rate at 3.75% in January, as it aims to support the labor market while being committed to returning inflation to its long-run target of 2.00%. The lagged effects of the FOMC’s actions and other ongoing macroeconomic and geopolitical factors could create economic uncertainty and alter forward rate expectations, which may result in interest rate and credit spread volatility. Market volatility resulting from these factors, particularly the absolute level of rates and the rate of change, will continue to impact our investment valuations and returns.

The changes in unrealized investment gains and losses generally do not alter the management of our investment portfolio. We seek to manage our exposure to interest rate risk and volatility by maintaining a diverse mix of securities with an intermediate duration profile and generally hold fixed income investments until maturity. The quality of our fixed income portfolio remains very high and changes in unrealized gains and losses have little impact on our cash flows, statutory surplus, or other capital requirements.

Cash and Cash Equivalents - Cash and cash equivalents increased to $369.0 million as of December 31, 2025 (2024: $229.5 million), as net cash generated from operating and investing activities was only partially offset by cash used in financing activities.

Deferred Income Taxes - Our net deferred tax asset was $18.5 million as of December 31, 2025 (2024: $69.9 million). The change to our deferred tax asset during 2025 was primarily due to the change in the fair market value of our investment portfolio and our accelerated deduction of research and experimental costs allowable under 2025 tax legislation. We owned $984.2 million and $968.2 million of tax and loss bonds at December 31, 2025 and December 31, 2024, respectively. See Note 16 – “Income Taxes” to our consolidated financial statements for additional disclosure on the components of our deferred tax assets and liabilities.

Consolidated Balance Sheets - Liabilities and Equity

As of December 31,

(In thousands)

2025

2024

% Change

Liabilities

Loss reserves

$

474,884 

$

462,662 

3 

Unearned premiums

93,026 

120,360 

(23)

Long-term debt

646,138 

644,667 

0 

Federal tax credit payable

135,344 

12,535 

N/M

Other liabilities

142,543 

134,636 

6 

Total Liabilities

$

1,491,935 

$

1,374,860 

9 

Shareholders' equity

Common stock

$

219,367 

$

248,449 

(12)

Paid-in capital

1,812,463 

1,808,236 

0 

AOCI, net of tax

(134,394)

(288,162)

53 

Retained earnings

3,250,115 

3,403,852 

(5)

Total

$

5,147,551 

$

5,172,375 

0 

Loss Reserves and Reinsurance Recoverable on Loss Reserves - Our loss reserves include estimates of losses and settlement expenses on (1) loans in our delinquency inventory (known as case reserves), (2) IBNR delinquencies, and (3) LAE. Our gross loss reserves are reduced by reinsurance recoverable on loss reserves to calculate a net reserve balance. Loss reserves increased to $474.9 million as of December 31, 2025, from $462.7 million of December 31, 2024. Reinsurance recoverables on loss reserves were $65.1 million and $47.3 million as of December 31, 2025 and December 31, 2024, respectively. Reinsurance recoverable is impacted by the mix of delinquencies covered by our QSR Transactions. The increase in our loss reserves was primarily driven by loss reserves

MGIC Investment Corporation 2025 Form 10-K | 68

established on new delinquency notices, offset partially by favorable development on previously received delinquencies. See Note 8 - "Loss Reserves" to our consolidated financial statements for additional information on the composition of our loss reserves.

Unearned Premium - Our unearned premium decreased to $93.0 million as of December 31, 2025 from $120.4 million as of December 31, 2024 primarily due to the run-off of unearned premium on our existing portfolio of single premium policies, partially offset by new premium written on single premium policies.

Federal tax credit payable - We have purchased transferable federal tax credits from third parties. The increase to the federal tax credit payable in 2025 is primarily due to amounts owed to third parties for purchased credits.

Shareholders' Equity - The decrease in shareholders' equity primarily relates to the repurchases of our common stock and dividends paid to shareholders, partially offset by net income for the year ended December 31, 2025.

MGIC Investment Corporation 2025 Form 10-K | 69

Liquidity and Capital Resources

Consolidated Cash Flow Analysis

We have three primary types of cash flows: (1) operating cash flows, which consist mainly of cash generated by our insurance operations and income earned on our investment portfolio, less amounts paid for claims, interest expense and operating expenses, (2) investing cash flows related to the purchase, sale and maturity of investments and purchases of property and equipment and (3) financing cash flows generally from activities that impact our capital structure, such as changes in debt and shares outstanding, and dividend payments. The following table summarizes these three cash flows on a consolidated basis for the last two years.

Summary of Consolidated Cash Flows

Years ended December 31,

(In thousands)

2025

2024

Total cash provided by (used in):

Operating activities

$

852,798 

$

725,032 

Investing activities

228,374 

(142,005)

Financing activities

(940,285)

(719,044)

Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents

$

140,887 

$

(136,017)

Operating Activities

The following list highlights the major sources and uses of cash flow from operating activities:

Sources

+

Premiums received

+

Loss payments from reinsurers

+

Investment income

Uses

-

Claim payments

-

Premium ceded to reinsurers

-

Interest expense

-

Operating expenses

-

Tax payments

Our largest source of cash is from premiums received from our insurance policies, which we receive on a monthly installment basis for most policies. Our largest cash outflows have generally been for our operating expenses and claims paid on our mortgage insurance policies. Net cash provided by operating activities in 2025 increased compared to 2024 primarily due to a decrease in taxes paid, an increase in premiums received, and a decrease in underwriting expenses paid, partially offset by an increase in losses paid, net.

We invest our net cash flow in various investment securities that earn interest. We also use cash to pay for our ongoing expenses such as employee costs, outside service expenses and debt interest.

In connection with our reinsurance transactions, we cede, or pay out, part of the premiums we receive to our reinsurers and collect cash when claims subject to our reinsurance coverage are paid.

In the next twelve months we will pay approximately $134.6 million for amounts owed to third parties for our purchase of transferable federal tax credits.

We also have purchase obligations totaling approximately $19.4 million which consist primarily of contracts related to our continued investment in our information technology infrastructure in the normal course of business. The majority of these obligations are under contracts that give us cancellation rights with notice. In the next twelve months we anticipate we will pay approximately $12.3 million for our purchase obligations.

We do not expect to make a contribution to the pension plan in 2026 and distributions from the supplemental executive retirement plan will be funded as incurred. The net funded status (the market value of our plan assets compared to the projected benefit obligation) will impact future contributions to our qualified pension plan.

MGIC Investment Corporation 2025 Form 10-K | 70

Investing Activities

The following list highlights the major sources and uses of cash flow from investing activities:

Sources

+

Proceeds from sales of investments

+

Proceeds from maturity of fixed income securities

Uses

-

Purchases of investments

We maintain an investment portfolio that is primarily invested in a diverse mix of fixed income securities. Net cash flows provided from investing activities in 2025 primarily reflects sales of fixed income securities that exceeded purchases of fixed income securities. Net cash flows used in investing activities in 2024 primarily reflected purchases of fixed income securities that exceeded sales of fixed income securities. For additional information on the composition of our investment portfolio refer to "Balance Sheet Review".

Financing Activities

The following list highlights the major sources and uses of cash flow from financing activities:

Sources

+

Proceeds from debt and/or common stock issuances

Uses

-

Repayment/repurchase of debt

-

Repurchase of common stock

-

Payment of dividends to shareholders

-

Payment of withholding taxes related to share-based compensation net share settlement

Net cash flows used in financing activities in 2025 and 2024 primarily reflects the repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.

Capitalization

Capital Risk

Capital risk is the risk of adverse impact on our ability to comply with capital requirements (regulatory and GSE) and to maintain the level, structure and composition of capital required for meeting financial performance objectives.

A strong capital position is essential to our business strategy and is important to maintain a competitive position in our industry. Our capital strategy focuses on long-term stability, which enables us to build and invest in our business, even in a stressed environment.

Our capital management objectives are to:

•influence and maintain compliance with capital requirements,

•maintain access to capital and reinsurance markets,

•manage our capital to support our business strategies and the competing priorities of relevant stakeholders,

•assess appropriate uses for capital that cannot be deployed in support of our business strategies, including the size and form of capital return to shareholders, and

•support business opportunities by enabling capital flexibility and efficiently using company resources.

These objectives are achieved through ongoing monitoring and management of our capital position, mortgage insurance portfolio stress modeling, and a capital governance framework. Capital management is intended to be flexible in order to react to a range of potential events. The focus we place on any individual objective may change over time due to factors that include, but are not limited to, economic conditions, changes at the GSEs, competition, and alternative transactions to transfer mortgage risk.

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Capital Structure

The following table summarizes our capital structure as of December 31, 2025, and 2024.

(In thousands, except ratio)

2025

2024

Common stock, paid-in capital, retained earnings

$

5,281,945 

$

5,460,537 

Accumulated other comprehensive loss, net of tax

(134,394)

(288,162)

Total shareholders' equity

5,147,551 

5,172,375 

Long-term debt, par value

650,000 

650,000 

Total capital resources

$

5,797,551 

$

5,822,375 

Ratio of long-term debt to shareholders' equity

12.6 

%

12.6 

%

The decrease in shareholders' equity primarily relates to the repurchases of our common stock and dividends paid to shareholders, partially offset by net income in the year ended December 31, 2025. See Note 11 - "Shareholders' Equity" for further information.

Debt Obligations - Holding Company

As of December 31, 2025, our holding company's debt obligations was $650 million in aggregate principal amount consisting of our 5.25% Notes due in 2028. See Note 3 - "Debt" for further information on our outstanding debt obligations impacting our consolidated financial statements in 2025 and 2024.

Liquidity Analysis - Holding Company

Our holding company had approximately $1.1 billion in cash and investments as of December 31, 2025 and December 31, 2024, respectively. These resources are maintained primarily to service our debt interest expense, pay debt maturities, repurchase shares, pay dividends to shareholders, and to settle intercompany obligations. While these assets are held, we generate investment income that serves to offset a portion of our cash requirements. The payment of dividends from MGIC are the principal source of holding company cash inflow and their payment is restricted by insurance regulation. See Note 13 - “Statutory Information” to our consolidated financial statements for additional information about MGIC’s dividend restrictions. The payment of dividends from MGIC is also influenced by our view of the appropriate level of excess PMIERs Available Assets to maintain, which can change over time. Raising capital in the public markets is another potential source of holding company liquidity. The ability to raise capital in the public markets is subject to prevailing market conditions, investor demand for the securities to be issued, and our deemed creditworthiness.

During 2025 and 2024, we repurchased 30.1 million and 25.3 million shares of our common stock for $782.0 million and $566.6 million, respectively. Through February 20, 2026 we repurchased 4.5 million shares of our common stock for $120.5 million. The repurchase programs may be suspended or discontinued at any time. In 2026, we expect share repurchase programs will remain our primary means of returning capital to shareholders.

In 2025, we paid dividends of $0.13 to shareholders in the first and second quarters and $0.15 to shareholders in the third and fourth quarters. On January 27, 2026, our Board of Directors declared a quarterly cash dividend of $0.15 per common share to shareholders of record on February 17, 2026, payable on March 6, 2026. We expect to continue to make dividend payments to shareholders in 2026.

Over the next twelve months the principal demand on our holding company resources will be interest payments on our 5.25% Notes approximating $34.0 million, based on the debt outstanding at December 31, 2025, and dividends to our shareholders. We believe our holding company has sufficient sources of liquidity to meet its payment obligations for the foreseeable future.

We may use holding company cash to repurchase additional shares or to repurchase our outstanding debt obligations. Such repurchases may be material, may be made for cash (funded by debt) and/or exchanges for other securities, and may be made in open market purchases (including through 10b5-1 plans), privately negotiated acquisitions or other transactions.

Significant cash and investments inflows at our holding company during the year were:

•$800.0 million dividends received from MGIC,

•$101.7 million intercompany tax receipts, and

•$31.9 million of investment income.

Significant cash outflows at our holding company during the year were:

•$788.6 million of net share repurchase transactions,

•$132.5 million of cash dividends paid to shareholders, and

•$34.1 million of interest payments on our outstanding debt obligations.

The net unrealized losses on our holding company investment portfolio were approximately $0.4 million at December 31, 2025 and the portfolio had a modified duration of approximately 0.7 years.

MGIC Investment Corporation 2025 Form 10-K | 72

The ability of MGIC to pay dividends is restricted by insurance regulation. Amounts in excess of prescribed limits are deemed “extraordinary” and may not be paid if disapproved by the OCI. A dividend is extraordinary when the proposed dividend amount, plus dividends paid in the twelve months preceding the dividend payment date exceed the ordinary dividend level. In 2026, MGIC can pay $89 million of ordinary dividends without OCI approval, before taking into consideration dividends paid in the preceding twelve months. In 2025 and 2024, MGIC paid a cash and/or investment security dividend of $800 million and $750 million, respectively, to our holding company. Future dividend payments from MGIC to the holding company will be determined in consultation with the Board of Directors, and after considering any updated estimates about our business. We ask the Wisconsin OCI not to object before MGIC pays dividends to the holding company.

Scheduled debt maturities beyond the next twelve months include $650 million of our 5.25% Notes in 2028. See Note 3 – “Debt” to our consolidated financial statements for additional information about our long term debt. The description in Note 3 - “Debt" to our consolidated financial statements is qualified in its entirety by the terms of the notes. The terms of our 5.25% Notes are contained in a Supplemental Indenture, dated as of August 12, 2020, between us and U.S. Bank National Association, as trustee, which is included as an exhibit to our 8-K filed with the SEC on August 12, 2020, and in the Indenture dated as of October 15, 2000 between us and the trustee.

Although not anticipated in the near term, we may also contribute funds to our insurance operations to comply with the PMIERs or the State Capital Requirements. See “Overview – PMIERs” above for a discussion of these requirements.

Debt at Subsidiaries

MGIC did not have any outstanding debt obligations at December 31, 2025. MGIC is a member of the FHLB, which provides MGIC access to an additional source of liquidity through a secured lending facility. We may borrow from the FHLB at any time.

Capital Adequacy

PMIERs

As of December 31, 2025, MGIC’s Available Assets under the PMIERs totaled approximately $5.7 billion, an excess of approximately $2.5 billion over its Minimum Required Assets; MGIC is in compliance with the requirements of the PMIERs and eligible to insure loans delivered to or purchased by the GSEs.

The table below presents the PMIERs capital credit for our reinsurance transactions.

PMIERs - Reinsurance Credit

December 31,

(In millions)

2025

2024

QSR Transactions

$

1,402 

$

1,177 

Home Re Transactions

434 

666 

Traditional XOL Transactions

966 

388 

Total capital credit for reinsurance transactions

$

2,802 

$

2,231 

The total calculated PMIERs credit for risk ceded under our XOL Transactions are based on the PMIERs requirement of the covered policies and the attachment and detachment points of the coverage, all of which fluctuate over time. (See Note 1 - “Nature of Business and Basis of Presentation”.)

The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases. Refer to "Overview - PMIERs" of this MD&A and our risk factor titled “We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility” in Item 1A. for further discussion of PMIERs.

Risk-to-Capital

The risk-to-capital ratio is our net RIF divided by our policyholders' position. Our net RIF includes primary RIF and excludes risk on policies for which case loss reserves have been established and the risk covered by reinsurance transactions. MGIC's policyholders’ position consists primarily of statutory policyholders’ surplus (which generally changes due to statutory net income/loss and dividends paid, among other things), plus the statutory contingency loss reserve. The statutory contingency loss reserve is reported as a liability on the statutory balance sheet. A mortgage insurance company is required to make annual additions to a contingency loss reserve of approximately 50% of earned premiums. These contributions must generally be maintained for a period of ten years. However, with regulatory approval a mortgage insurance company may make early withdrawals from the contingency loss reserve when incurred losses exceed 35% of earned premiums in a calendar year.

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The table below presents MGIC's risk-to-capital calculation.

Risk-to-Capital - MGIC

December 31,

(In millions)

2025

2024

RIF - net (1)

$

57,598 

$

58,213 

Statutory policyholders' surplus

$

887 

$

973 

Statutory contingency reserve

4,853 

4,833 

Statutory policyholders' position

$

5,740 

$

5,806 

Risk-to-capital

10.0:1

10.0:1

(1)RIF – net, as shown in the table above, is net of reinsurance and exposure on policies for which case loss reserves have been established ($1.8 billion at December 31, 2025 and $1.8 billion at December 31, 2024).

For additional information regarding regulatory capital see Note 13 – “Statutory Information” to our consolidated financial statements as well as our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis” in Item 1A. 

Financial Strength Ratings

Financial strength ratings are published by third-party rating agencies as an independent opinion of an insurer’s financial strength and ability to meet ongoing insurance and contract obligations. The financial strength ratings for MGIC and MAC through the date of this filing are listed below:

MGIC Financial Strength Ratings

MAC Financial Strength Ratings

Rating Agency

Rating

Outlook

Rating Agency

Rating

Outlook

Moody's Investors Service

A2

Stable

Standard and Poor's Rating Services

A-

Positive

Standard and Poor's Rating Services

A-

Positive

A.M. Best

A

Stable

A.M. Best

A

Stable

For further information about the importance of MGIC’s ratings and rating methodologies, see our risk factor titled “Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and / or increase our losses” in Item 1A.

MGIC Investment Corporation 2025 Form 10-K | 74

Critical Accounting Estimates

The accounting estimate described below requires significant judgments and estimates in the preparation of our consolidated financial statements.

Loss Reserves

The estimation of case loss reserves is subject to inherent uncertainty and requires significant judgment by management. Changes to our estimates could result in a material impact to our consolidated results and financial position, even in a stable economic environment.

Case Reserves

Case reserves are established for estimated insurance losses when notices of delinquency on insured mortgage loans are received. Such loans are referred to as being in our delinquency inventory. For reporting purposes, we consider a loan delinquent when it is two or more payments past due and has not become current or resulted in a claim payment. Although the accounting standard, ASC 944, regarding accounting and reporting by insurance entities specifically excludes mortgage insurance from its guidance relating to loss reserves, we establish loss reserves using the general principles contained in the insurance standard. However, consistent with industry standards for mortgage insurers, we do not establish case loss reserves for future claims on insured loans which are not currently delinquent.

We establish reserves using estimated claim rates and claim severities in estimating the ultimate loss.

The estimated claim rates and claim severities are used to determine the amount we estimate will actually be paid on the delinquent loans as of the reserve date. If a policy is rescinded we do not expect that it will result in a claim payment and thus the rescission generally reduces the historical claim rate used in establishing reserves. In addition, if a loan cures its delinquency, including through a successful loan modification, the cure reduces the historical claim rate used in establishing reserves. To establish reserves, we utilize a reserving model that continually incorporates historical data into the estimated claim rate. The model also incorporates an estimate for severity. The severity is estimated using the historical percentage of our claims paid compared to our loan exposures, as well as the RIF of the loans currently in default. We do not utilize an explicit rescission rate in our reserving methodology, but rather our reserving methodology incorporates the effects rescission activity has had on our historical claim rate and claim severities. We review recent trends in the claim rate, claim severity, levels of defaults by geography and average loan exposure. As a result, the process to determine reserves does not include quantitative ranges of outcomes that are reasonably likely to occur.

The claim rates and claim severities are affected by external events, including actual economic conditions such as changes in unemployment rates, interest rates or housing values, pandemics and natural disasters. Our estimation process does not include a correlation between claim rates and claim severities to projected economic conditions such as changes in unemployment rates, interest rates or housing values. Our experience is that analysis of that nature would not produce reliable results as the change in one economic condition cannot be isolated to determine its specific effect on our ultimate paid losses because each economic condition is also influenced by other economic conditions. Additionally, the changes and interactions of these economic conditions are not likely homogeneous throughout the regions in which we conduct business. Each economic condition influences our ultimate paid losses differently, even if apparently similar in nature. Furthermore, changes in economic conditions may not necessarily be reflected in our loss development in the quarter or year in which the changes occur. Actual claim results generally lag changes in economic conditions by at least nine to twelve months.

Our estimate of loss reserves is sensitive to changes in claim rate and claim severity; it is possible that even a relatively small change in our estimated claim rate or claim severity could have a material impact on reserves and, correspondingly, on our consolidated results of operations even in a stable economic environment. For example, as of December 31, 2025, assuming all other factors remain constant, a $1,000 increase/decrease in the average claim severity reserve factor would change the reserve amount by approximately +/- $7 million. A one percentage point increase/decrease in the average claim rate reserve factor would change the reserve amount by approximately +/- $19 million. Historically, it has not been uncommon for us to experience variability in the development of loss reserves from period to period, as shown in the table below:

Historical Development of Loss Reserves

(In thousands)

Losses incurred related to prior years (1)

Reserve at end of prior year

2025

(155,179)

462,662 

2024

(212,476)

505,379 

2023

(208,514)

557,988 

2022

(404,130)

883,522 

2021

(60,015)

880,537 

(1)A negative number for a prior year indicates a redundancy of loss reserves. A positive number for a prior year indicates a deficiency of loss reserves.

See Note 8 – “Loss Reserves” to our consolidated financial statements for a discussion of recent loss development.

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