MTG 10-K & 10-Q changes, risk factors and insider trading

LossesOur resultbusiness fromis sensitive to general economicmacroeconomic orconditions personaland eventsfluctuations thatin reducethe housing market. Events such as recession, unemployment, reduction in household income, decreases in home prices, inflation, shifts in the comparative cost of renting versus owning a home, and changes in family status may affect a borrower’s ability or willingness to make mortgage payments, such as recession, unemployment, decreases in home prices, health issues, and changes in family status.payments. Such events are outside of our control, difficult to predict, and generally increase loan delinquencies and claims. The U.S. economy may be vulnerable to an array of factors, including inflation, geopolitical tensions and/or conflicts, rising national debt, ongoing fiscal deficits, and disruptions to international trade. Additionally, economic conditions may differ from region to region. Information about the geographic dispersion of our risk in force and delinquency inventory can be found in our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q.

A decline in home prices may make it more difficult for borrowers to sell or refinance their homes, increasing the chancesrisk of default. Additionally,A decline in home prices may occur even absent a deterioration in economic conditions, such as changes in buyers’ perceptions of the potential for future appreciation, restrictions on and the cost of mortgage credit due to more stringent underwriting standards, elevated interest rates, increased cost of homeowners insurance, changes to the tax deductibility of mortgage interest, decreases in the rate of household formations, or other factors. A decline in home prices may result in loan balances exceeding home values, discouraging borrowers from continuing to make payments. TheAlthough the rate of home price appreciation recently reached historically high rates, the rate of growth is moderating: according to the seasonally-adjusted Purchase-Only U.S. Home Price Index of the Federal Housing Finance Agency (the “FHFA”), which is based on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac, indicates that home prices increased .3% nationwide in November, 2024 compared to October, 2024. Although the 12 month change in home prices recently reached historically high rates, the rate of growth is moderating: it increased by 4.1%1.4% infrom theJanuary first2025 11through monthsNovember of 2024,2025, after increasing 6.7%, 6.8%,4.8% and 17.8%6.7% in 2023, 2022,2024 and 2021,2023, respectively. The national average price-to-income ratio exceeds its historical average, in part as a result of recent home price appreciation outpacing increases in income. AffordabilityElevated issueshome canprices puthave contributed to affordability constraints, which may lead to reduced demand and downward pressure on home prices. A decline in home prices mayat occurboth even absent a deterioration in economic conditions due to declines in demand for homes, which in turn may result from changes in buyers’ perceptions of the potential for future appreciation, restrictions onregional and thenational cost of mortgage credit due to more stringent underwriting standards, higher interest rates, changes to the tax deductibility of mortgage interest, decreases in the rate of household formations, or other factors.levels.

The substantial majority of our new insurance written ("NIW") is for loans purchased by the GSEs; therefore, the business practices of the GSEs greatly impact our business. The GSEs possess substantial market power, which enables them to influence our business and the mortgage insurance industry in general. In 20082008, the housing market was in severe decline, which damaged the financial condition of the GSEs. 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. When a new administration is sworn in, the policy direction and oversight of the GSEs may change.

Changes in the status, powers, or supervision of the GSEs, whether through legislation or administrative action, couldthat impact private mortgage insurers,insurers which wouldcould have an adverse effect on our business, revenue, results of operations and financial condition. Business practices of the GSEs that affect the mortgage insurance industry include:

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). 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:

•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 loansloans, and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases. If the number of loan delinquencies increases for reasons discussed in these risk factors, or otherwise, it may cause our Minimum Required Assets to exceed our Available Assets. We are unable to predict the ultimate number of loans that will become delinquent. If we are required to hold more capital relative to our insured loans it could adversely affect our business and results of operations, or prohibit or delay us from taking actions that would be advantageous to our investors.operations.

Additionally,•Failure theto PMIERsmeet imposecertain transactional approval conditions thatimposed by PMIERs. Such failure may restrict or delay us from taking certain actions. In the eventactions that one or both of the GSEs does not approve an intended course of action, there maywould be aadvantageous material adverse effect onto our business and results of operations.investors.

When we establish case reserves, we estimate our ultimate loss on delinquent loans by estimating the number of such loans that will result in a claim payment (the "claim rate"), and further estimating the amount of the claim payment (the "claim severity"). Changes to our claim rate and claim severity estimates could have a material impact on our future results, even in a stable economic environment. Our estimates incorporate anticipated cures, loss mitigation activity, rescissions and curtailments. The establishment of loss reserves is subject to inherent uncertainty and requires significant judgment by management. Our actual claim payments may differ substantially from our loss reserve estimates. Our estimates could be affected by several factors, including a change in regional or national economic conditions as discussed in these risk factors and a change in the length of time loans are delinquent before claims are received. Generally, the longer a loan is delinquent before a claim is received, the greater the severity. Foreclosure moratoriums and forbearanceForbearance programs intended to preserve homeownership for borrowers at risk of foreclosure increase the average time it takes to receive claims. Generally, losses follow a seasonal trend in which the first half of the year has stronger credit performance than the second half, with higher cure rates and lower new delinquency notice activity. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors, may result in delinquencies not following the typical pattern.

WeIn providethe past we have provided contract underwriting services, including on loans for which we are not providing mortgage insurance. These services are subject to contractual obligations and federal and state regulation. Our failure to meet the standards set forth in the applicable contracts or regulations would subject us to potential litigation or regulatory action. To the extent that we are construed to makehave made independent credit decisions in connection with our contract underwriting activities, we also could be subject to increased regulatory requirements under the Equal Credit Opportunity Act ("ECOA"), FCRA, and other laws. Under relevant laws, examination may also be made of whether a mortgage insurer's underwriting decisions have a disparate impact on persons belonging to a protected class in violation of the law.

Although their scope varies, state insurance laws generally grant broad supervisory powers to agencies or officials to examine insurance companies and enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including payment for the referral of insurance business, establishing premium rates andrates, discrimination in pricing,pricing and underwriting, and minimum capital requirements. The increased use by the private mortgage insurance industry of risk-based pricing systems that establish premium rates based on more attributes than previously considered, and of algorithms, artificial intelligence and data and analytics, has led to additional regulatory scrutiny of premium ratesthese and of other matters such as discrimination in pricing and underwriting, data privacy and access to insurance. For more information about state capital requirements, see our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis.” For information about regulation of data privacy, see our risk factor titled “We could be materially adversely affected by a cybersecurity breach or failure of information security controls.” For more details about the various ways in which our subsidiaries are regulated, see “Business - Regulation” in Item 1 of our Annual Report onin this Form 10-K for the year ended December 31, 2023.10-K.

While we have established policies and procedures to comply with applicable laws and regulations, many such laws and regulations are complex and it is not possible to predict the eventual scope, duration or outcome of any reviews or investigationsinvestigations. norA isregulatory itaction possibleagainst tous predictcould theirhave an adverse material adverse effect on usour orreputation, thebusiness mortgageand insurancefinancial industry.results.

Pandemics,The hurricaneseffects andof pandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition.

We have in place QSR and XOL reinsurance transactions providing various amounts of coverage on our risk in force as of December 31, 2024.2025. Refer to Part 1,II, Item 8, Note 47 – “Reinsurance” and Part 1,II, Item 27 “Consolidated Results of Operations – Reinsurance Transactions” of our QuarterlyAnnual Report onin this Form 10-Q,10-K, for more information about coverage under our reinsurance transactions. The reinsurance transactions reduce the tail-risk associated with stress scenarios. As a result, they reduce the risk-based capital that we are required to hold to support the risk and they allow us to earn higher returns on risk-based capital for our business than we would without them. However, market conditions impact the availability and cost of reinsurance. Reinsurance may not always be available to us, or available only on terms or at costs that we consider unacceptable. If we are not able to obtain reinsurance we will be required to hold additional capital to support our risk in force.

TheAdditionally, the GSEs may change the credit they allow under the PMIERs for risk ceded under our reinsurance transactions. In addition, we may not receive the same level of credit under future reinsurance transactions that we receive under existing transactions. Refer to “Consolidated Results of Operations – Reinsurance Transactions” in Part II, Item 7 of our Annual Report in this Form 10-K for information about the calculated PMIERs credit for our XOL transactions. At present, the GSE capital framework provides more capital credit for transactions with higher rated counterparties, as well as those who are diversified. If the GSEs were to reduce the credit that we receive for reinsurance under the PMIERs, it could result in decreased returns absent an increase in our premium rates. An increase in our premium rates to adjust for a decrease in reinsurance credit may lead to a decrease in our NIW and net income.

In accordance with accounting principles generally accepted in the United States, we establish case reserves for insurance losses and loss adjustment expenses only when delinquency notices are received for insured loans that are two or more payments past due and for loans we estimate are delinquent but for which delinquency notices have not yet been received (which we include in “IBNR”). Losses that may occur from loans that are not delinquent are not reflected in our financial statements, except when a "premium deficiency" is recorded. A premium deficiency would be recorded if the present value of expected future losses and expenses exceeds the present value of expected future premiumspremiums, anticipated investment income, and already established loss reserves on the applicable loans. As a result, future losses incurred on loans that are not currently delinquent may have a material impact on future results as delinquencies emerge. As of December 31, 2024, we had established case reserves and reported losses incurred for 26,791 loans in our delinquency inventory and our IBNR reserve totaled $29 million. The number of loans in our delinquency inventory may increase from that level as a result of economic conditions relating to current global events or other factors and our losses incurred may increase.

At December 31, 2024, 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. Our risk-to-capital ratio and MPP reflect credit for the risk ceded under our reinsurance agreements with unaffiliated reinsurers. If MGIC is not allowed an agreed level of credit under the State Capital Requirements, MGIC may terminate the reinsurance transactions, without penalty.

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,Act; thoughhowever it is expected that some changesmodifications will be made before formal adoption.

The factors that may affect the volume of low down payment mortgage originations include the health of the U.S. economy; conditions in regional and local economies and the level of consumer confidence; the health and stability of the financial services industry; restrictions on mortgage credit due to more stringent underwriting standards, liquidity issues or risk-retention and/or capital requirements affecting lenders; the level of home mortgage interest rates; housing affordability; new and existing housing availability; the rate of household formation, which is influenced, in part, by population and immigration trends; homeownership rates; the rate of home price appreciation, which in times of heavy refinancing can affect whether refinanced loans have LTV ratios that require private mortgage insurance; the extent to which the GSEs' business practices shift the market away from the GSEs to the FHA, other government execution channels, or lender portfolios; tax policy; and government housing policy encouraging equitable housing and loans to first-time homebuyers.policy. A decline in the volume of low down payment home mortgage originations could decrease demand for mortgage insurance and limit our NIW. For other factors that could decrease the demand for mortgage insurance, see our risk factor titled “The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance or are unable to obtain capital relief for mortgage insurance.”

•investors using risk mitigation and credit risk transfer techniques other than private mortgage insurance, or accepting credit risk without credit enhancement,enhancement;

•lenders and other investors holding mortgages in portfolio and self-insuring,self-insuring;

•lenders using FHA, U.S. Department of Veterans Affairs ("VA") and other government mortgage insurance programs,programs; and

The VA'sFHA's share of the low down payment residential mortgages that were subject to FHA, VA, USDA or primary private mortgage insurance was 24.5%34.3% in 2025, 33.5% in 2024, 21.5%and 33.2% in 2023, and 24.5% in 2022.2023. Since 2012, the VA'sFHA’s market share has been as low as 23.4% (2020) and as high as 30.9%42.1% (in 20202012). TheGenerally, VA'swe 2023expect FHA market share wasto theincrease lowestin sinceenvironments 2013with (22.8%).lower Theorigination VA program offers 100% LTV ratio loans for qualifying borrowers.volume.

In July 2023, the Federal Reserve Board, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency proposed a revised regulatory capital rulerule, known as the Basel III End Game, that would impose higher capital standards on large U.S. banks. Under the proposed regulation's new expanded risk-based approach, it was interpreted that affected banks would no longer receive risk-based capital relief for mortgage insurance on loans held in their portfolios. If adopted as proposed, the regulation is expected to have a negative effect on our NIW; however, at this time it is difficult to predict the extent of the impact. In September 2024, it was announced that regulators may revise the proposed rule, including by lowering the proposed-risk weighting for loans secured by residential real estate. It is unknown at this time what, if any, effect this would have on our NIW. More recently, inIn November 2024, it was announced that the proposed rule will be placed on holdhold. pendingIt is possible that in the installation offuture the newproposed Presidentialrule Administration.could be re-proposed or an entirely different proposal could be made.

Our annual persistency rate was 84.8% at December 31, 2024, 86.1% at December 31, 2023, and 82.2% at December 31, 2022. Since 2018, our annual persistency rate 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 insurance in force, which affects the vulnerability of the IIF to refinancing; and the current amount of equity that borrowers have in the homes underlying our insurance in force. The amount of equity affects persistency in the following ways:

We depend on reliable, consistent third-party servicing of the loans that we insure. An increase in delinquent loans may result in liquidity issues for servicers. When a mortgage loan that is collateral for a mortgage-backed security ("MBS") becomes delinquent, the servicer is usually required to continue to pay principal and interest to the MBS investors, generally for four months, even though the servicer is not receiving payments from borrowers. This may cause liquidity issues, especially for non-bank servicers (who service approximately 55%59% of the loans underlying our IIF as of December 31, 20242025) because they do not have the same sources of liquidity that bank servicers have. Consolidation in the mortgage servicing market may also lead to increased risk as a large servicer's operational failures, system outages, or policy changes could affect a larger portion of our IIF.

While there has been no disruption in our premium receipts through the fourth quarter of 2024, servicersServicers who experience future liquidity issues may be less likely to advance premiums to us on policies covering delinquent loans or to remit premiums on policies covering loans that are not delinquent. Our policies generally allow us to cancel coverage on loans that are not delinquent if the premiums are not paid within a grace period.

We have delegated authority to the GSEs to implement certain loss mitigation options (e.g., modifications, short sales, and deeds-in-lieu andof foreclosure bidding) on certain loans we insure. The GSEs in turn have delegated such authority to most of their approved servicers, pursuant to delegation agreements. Servicers who service GSE-owned loans are required to operate under the GSEs' required standards in accepting certain loss mitigation alternatives. We rely on these servicers to appropriately make decisions to mitigate our exposure to loss. In some cases, loss mitigation decisions may not be favorable to us and may increase the incidence and/or severity of paid claims. Ineffective delegation procedures or the failure of servicers to operate pursuant to required standards may increase our losses and have an adverse effect on our business, financial condition and operating results. We may terminate delegation of some of these loss managementmitigation decisions to the GSEs; however, such termination may adversely affect our relationshiprelationships with the GSEs and servicers.

If our risk management programs are not effective in identifying, or adequate in controlling or mitigating,mitigating the risks we face, or if the models we use are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition.

Our enterprise risk management program, described in "Business - Our Products and Services - Risk Management" in Item 1 of our Annual Report onin this Form 10-K for the year ended December 31, 2023,10-K, may not be effective in identifying, or adequate in controlling or mitigating, the risks we face in our business.

We employ proprietary and third-party models for a wide range of purposes, including the following: projecting losses, premiums, expenses, and returns; pricing products (through our risk-based pricing system); determining the techniques used to underwrite insurance; estimating reserves; evaluating risk; determining internal capital requirements; procuring automated valuations; and performing stress testing. These models rely on estimates, projections, and assumptions that are inherently uncertain and may not always operate as intended. This can be especially true when extraordinary events occur, such as wars, periods of extreme inflation, pandemics, or environmental disasters related to changing climatic conditions. In addition, our models are being continuously updated over time. Changes in models or model assumptions could lead to material changes in our future expectations, returns, or financial results. The models we employ are complex, which could increase our risk of error in their design, implementation, or use. Also, the associated input data, assumptions, and calculations may not always be correct or accurate and the controls we have in place to mitigate these risks may not be effective in all cases. The risks related to our models may increase when we change assumptions, methodologies, or modeling platforms. Moreover, we may use information we receive through enhancements to refine or otherwise change existing assumptions and/or methodologies.

InformationFailed, disrupted, or inadequate information technology system failures or interruptionssystems may materially impact our operations and/or adversely affect our financial results.

We are heavily dependent on our information technology systems to conduct our business. Our ability to efficiently operate our business depends significantly on the reliability and capacity of our systems and technology. The failure of our systems and technology, or our disaster recovery and business continuity plans, to operate effectively could affect our ability to provide our products and services to customers, reduce efficiency, or cause delays in operations. Significant capital investments might be required to remediate any such problems. We are also dependent on our ongoing relationships with key technology providers, including provisioning of their services, products and technologies, and their ability to support those products and technologies. The inability of these providers to successfully provide and support those products could have ana material adverse impact on our business and results of operations.

From time to time we upgrade, automate or otherwise transform our information systems, business processes, risk-based pricing system, and our system for evaluating risk. Certain information systems have been in place for a number of years and it has become increasingly difficult to support their operation. The implementation of technological and business process improvements, as well as their integration with customer and third-party systems when applicable, is complex, expensive and time consuming. If we fail to timely and successfully implement and integrate the new technology systems, if the third party providers upon which we are reliant do not perform as expected, if our legacy systems fail to operate as required, or if the upgraded systems and/or transformed and automated business processes do not operate as expected, it could have a material adverse impact on our business and results of operations.

As discussed under “Forward Looking Statements and Risk Factors” in "Item 1A1. ofBusiness Part- 1A. 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.

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. AtAs of December 31, 20242025 MGIC had $295.4$303.1 billion of primary IIF.

The strong credit quality of our insurance portfolio reflects several years of favorable housing fundamentals, and in our view, generally favorable risk characteristics on our recently insured loans. Our insurance in forceIIF 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.

CompetitionCompetitive Environment

The private mortgage insurance industry is highly competitive and is expected to remain so. Our competitors primarily include other private mortgage insurers and governmental agencies, principally the FHA and VA. 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.

In recent years, pricingPricing 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.

We operate under the requirements of the GSEs PMIERs and must complymaintain compliance with athese GSE's PMIERsrequirements 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. MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs. In August 2024, the GSEs issued updates to the calculation of Available Assets.

The following is management’s discussion and analysis of the financial condition and results of operations of MGIC Investment Corporation for the firstsecond 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.

As of MarchJune 31,30, 2026, we had $302.7$304.8 billion of primary insurance in force and $81.2$81.8 billion of primary risk in force.

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 MarchJune 31,30, 2026, MGIC’s Available Assets totaled $5.8$5.6 billion, or $2.9$2.7 billion in excess of its Minimum Required Assets.

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 MGIC Investment Corporation - Q2 2026 | 32 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 MarchJune 31,30, 2026, MGIC’s risk-to-capital ratio was 9.69.9 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.8$3.6 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.

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

•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 MGIC Investment Corporation - Q1 2026 | 34 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.

NIW for the firstsecond quarter of 2026 was $14.4$17.8 billion (Q1Q2 2025: $10.2$16.4 billion) and $32.2 billion for the six months ended June 30, 2026 (YTD June 30, 2025: $26.6 billion). The increase for the threesix months ended MarchJune 31,30, 2026 reflects a higherlarger expected marketpurchase positionorigination inmarket. the current year compared with the same period in the prior year. For the full year, weWe expect our full-year 2026 NIW to remain relatively flat compared with 2025.

The following tables provide information about loan risk characteristics associated with our NIW for the periods indicated.

The following table sets forth portfolio statistics associated with our primary IIF and RIF as of MarchJune 31,30, 2026.

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

Our Annual Persistency was 84.0%83.3% at MarchJune 31,30, 2026 compared with 84.7% at MarchJune 31,30, 2025. 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.

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 $478$495 million and $482 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

The following section of the MD&A provides a comparative discussion of MGIC Investment Corporation’s Consolidated Results of Operations for the three and six months ended MarchJune 31,30, 2026 and 2025.

The decrease in net income and adjusted net operating income for the three and six months ended June 30, 2026, is primarily due to an increase in losses incurred, net and a decrease in net premiums earned, partially offset by a decrease in underwriting and other expenses, net and a decrease in the provision for income taxes. Diluted income per share and adjusted operating income per diluted share increased primarily due to a decreasedecreases in the number of diluted weighted shares outstanding partially offset by a decreasedecreases in net income.

NetThe decrease in net premiums earned for the three and six months ended MarchJune 31,30, 2026 decreased to $235.4 million from $243.7 million during the same period in the prior year. The decrease2026, was primarily driven by an increase in ceded premiums written.

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 each of the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.

(2) Assumed premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.4 bps and 0.5 bps for both the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.2025, respectively.

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 MarchJune 31,30, 2026, are presented in the table below. The table below excludes the 2026 Traditional XOL which is still within its contractual fill-up period covering policies in force from January 1, 2026 through MGIC Investment Corporation - Q1Q2 2026 | 43 December 31, 2026.

Ceded premiums on our XOL Transactions were $17.8$16.3 million and $34.1 million for the three and six months ended MarchJune 31,30, 2026, and $14.7$15.4 million and $30.1 million for the three and six months ended MarchJune 31,30, 2025.

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". in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. 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 MarchJune 31,30, 2026 through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan. See 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” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

The increase in current year losses incurred for the three and six months ended MarchJune 31,30, 2026 compared with the same periodperiods in the prior year is primarily due to an increase in new delinquencies reported and an increase in estimated severity on current year delinquencies.

A rollforward of our primary delinquency inventory for the three and six months ended MarchJune 31,30, 2026 and 2025 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.

(1)Approximately 22%,21%, 22%, and 26%24% of the primary delinquency inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of MarchJune 31,30, 2026, December 31, 2025, and MarchJune 31,30, 2025, respectively.

(1)Approximately 16%,14%, 16%, and 22%20% of the primary delinquency inventory with 12 payments or more delinquent has at least 36 payments delinquent as of MarchJune 31,30, 2026, December 31, 2025, and MarchJune 31,30, 2025, respectively.

The increase in net losses and LAE paid during the three and six months ended MarchJune 31,30, 2026 when compared with the same periodperiods in the prior year was primarily driven by an increase in our claims received along with an increase in the 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 primary delinquency inventory for the top 10 jurisdictions (based on MarchJune 31,30, 2026 delinquency inventory) as of MarchJune 31,30, 2026, December 31, 2025 and MarchJune 31,30, 2025 appears in the following table.

The primary average RIF on delinquent loans at MarchJune 31,30, 2026, December 31, 2025 and MarchJune 31,30, 2025 for the top 5 jurisdictions (based on the MarchJune 31,30, 2026 delinquency inventory) appears in the following table.

The primary average RIF on all loans was $73,318,$73,990, $72,995, and $70,973$71,741 at MarchJune 31,30, 2026, December 31, 2025, and MarchJune 31,30, 2025, respectively.

The primary delinquency inventory by policy year at MarchJune 31,30, 2026, December 31, 2025 and MarchJune 31,30, 2025 appears in the following table.

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 MarchJune 31,30, 2026, 46%50% of our primary RIF was written subsequent to December 31, 2022, 63%66% of our primary RIF was written subsequent to December 31, 2021, and 81%83% of our primary RIF was written subsequent to December 31, 2020.

Underwriting and other expenses, net for the three and six months ended MarchJune 31,30, 2026 were $48.1$45.6 million and $93.7 million, respectively, compared with $53.1$52.1 million and $105.2 million for the three and six months ended MarchJune 31,30, 2025. The decreasedecreases waswere primarily dueattributable to a decrease in outside service expenses.expenses and employee costs. See Note 14 - “Segment Reporting,” to our consolidated financial statements for additional discussion of significant segment expenses.

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 for the three and six months ended MarchJune 31,30, 2026, decreased compared with the same periodperiods in the prior year primarily due to a decrease in underwriting and other expenses, net.

The decrease in our provision for income taxes in the firstthree quarterand ofsix months ended June 30, 2026 as compared to the same periodperiods in the prior year was primarily due to a decrease in income before tax. The difference between our statutory tax rate of 21% and our effective tax rate of 20.1% for the three months ended March 31, 2026, was primarily due to the tax benefits recognized from the purchase of transferable federal tax credits. Our effective tax rate for the three and six months ended MarchJune 31,30, 2026 and 2025, approximated the federal statutory income tax rate of 21%.

Investments - Our investment portfolio primarily consists of a diverse mix of highly rated fixed income securities. The average duration and investment yield of our investment portfolio as of MarchJune 31,30, 2026 and December 31, 2025 are shown in the table below.

The security ratings of our fixed income investments as of MarchJune 31,30, 2026 and December 31, 2025 are shown in the table below.

Cash and Cash Equivalents - Our cash and cash equivalents balance decreased to $235.1$207.3 million as of MarchJune 31,30, 2026, from $369.0 million as of December 31, 2025, as cash used in financing activities was only partially offset by net cash generated from operating and investing activities.

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 reserves are reduced by reinsurance recoverable on loss reserves to calculate a net reserve balance. Reinsurance recoverables on loss reserves were $73.2$76.1 million and $65.1 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. The reinsurance recoverable is impacted by the mix of delinquencies covered by our QSR Transactions. The increase in loss reserves, net of reinsurance recoverable, is primarily due to loss reserves established on new notices partially offset 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.

Federal Tax Credit Payable - We have purchased transferable federal tax credits from third parties. The decreaseincrease into the federal tax credit payable induring the threesix months ended MarchJune 31,30, 2026, is primarily due to paymentsthe madepurchase toof thirdadditional partiestax credits, partially offset by the payment for amounts owed in connection with transferrable federalfor tax credits.

The decrease in net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was primarily due to cash paid to third parties for the purchase of transferrable federal tax credits, a decrease in premiums received, and an increase in losses paid, partially offset by a decrease in underwriting expenses.

Net cash provided by investing activities for the threesix months ended MarchJune 31,30, 2026 and 2025, primarily reflects sales and maturities of fixed income securities that exceeded purchases of fixed income securities during the period.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025, primarily reflects repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.

As of MarchJune 31,30, 2026, our holding company’s debt obligations were $650 million in aggregate principal amount consisting of our 5.25% Notes due in 2028. See Note 7 – “Debt” to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information about the terms of our indebtedness.

As of MarchJune 31,30, 2026 and December 31, 2025, we had approximately $0.7$0.9 billion and $1.1 billion, respectively, in cash and investments at our holding company. 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 the threesix months ended MarchJune 31,30, 2026 we repurchased 7.213.8 million shares for $192.6$369.2 million. Through AprilJuly 24, 2026, we repurchased an additional 1.71.5 million shares for $47.4$42.4 million inclusive of commissions. Also, in April 2026, our Board of Directors approved a share repurchase program, authorizing us to purchase an additional $750 million of common stock prior to December 31, 2028.

We paid dividends of $0.15 to shareholders in the first and second quarter of 2026. On AprilJuly 23, 2026, the Board of Directors declared a quarterly cash dividend to the holders of the company’s common stock of $0.15$0.17 per share to shareholders of record on MayAugust 6,5, 2026. See Note 12 - “Shareholders’ Equity” to our consolidated financial statements for additional information on our share repurchase programs as well as dividends paid to shareholders.

Significant cash and investments inflows at our holding company during the threesix months ended MarchJune 31,30, 2026: