Enact Holdings, the US private mortgage insurance subsidiary formerly under Genworth, posted Q2 2026 GAAP net income of $175 million, or $1.25 per diluted share, against $168 million and $1.11 a year earlier. The headline earnings print is ordinary in isolation, but the second-quarter events in aggregate tell a tighter equity story: full-year 2026 capital return guidance moved to $550–600 million (raised from the prior $500M authorization that was already largely executed), $93 million of stock was repurchased during the quarter at $42.58 average, and book value per share climbed to $39.06, up 11% from a year ago. The market is paying 1.28x book and 10.8x trailing adjusted operating earnings for an insurer-equity compounder that has now raised its dividend, lifted its full-year return-of-capital target, and written its largest new insurance volume in a year.
The second-quarter result is the cleanest read in two years on what Enact's equity is structurally worth. The 14% loss ratio in Q2 2026, up from 10% in the year-ago quarter and 15% in Q1 2026, is the only blemish on the page, but a $37 million prior-year reserve release masked the underlying trend, and the year-ago quarter benefited from a larger $48 million release. Underlying earnings power, measured by net investment income, expanded 11% to $73 million as the book yield climbed to 4.6% from 4.2% a year earlier. The capital return pivot is the load-bearing observation: management is signaling that with $1.9 billion of PMIERs sufficiency cushion and statutory risk-to-capital at 9.9x, the company has run out of high-return ways to redeploy capital inside the insurance entity, so the marginal dollar flows back to shareholders.
The single load-bearing risk is the housing credit cycle, and the data point that tests this thesis is the Q3 new insurance written print in October. If 30-year mortgage rates remain above 6.5% and persistency holds at 80% or above, the equity compounds at book. If rates fall below 6% and persistency drops toward 75%, the loss ratio expands and the reserve release tailwind reverses. The five monitoring items at the end of this report are the falsification framework.