Enact Holdings, Inc. (NASDAQ:ACT) Q1 2024 Earnings Convention Name Could 2, 2024 8:00 AM ET
Company Members
Daniel Kohl – VP, Investor Relations
Rohit Gupta – President and Chief Government Officer
Dean Mitchell – Chief Monetary Officer
Convention Name Members
Doug Harter – UBS
Mihir Bhatia – Financial institution of America
Bose George – KBW
Rick Shane – JPMorgan
Soham Bhonsle – BTIG
Operator
Good day and thanks for standing by. Welcome to Enact’s First Quarter 2024 Earnings Name. Presently all members are in a listen-only mode. And after the audio system’ presentation there will probably be a question-and-answer session and directions will probably be given at the moment. Please be suggested that as we speak’s convention is being recorded.
I might now like at hand the convention over to your first speaker, Daniel Kohl, Vice President of Investor Relations. Please start.
Daniel Kohl
Thanks, and good morning. Welcome to our First Quarter Earnings Name.
Becoming a member of me as we speak are Rohit Gupta, President and Chief Government Officer and Dean Mitchell, Chief Monetary Officer and Treasurer.
Rohit will present an summary of our enterprise efficiency and progress in opposition to our technique. Dean will then talk about the main points of our quarterly outcomes earlier than turning the decision again to Rohit for closing remarks. We are going to then take your questions.
The earnings supplies we issued after market closed yesterday comprise our monetary outcomes for the quarter, together with a complete set of monetary and operational metrics. These can be found on the Investor Relations part of our web site.
Right this moment’s name is being recorded and can embody using forward-looking statements. These statements are primarily based on present assumptions, estimates, expectations, and projections as of as we speak’s date. Moreover, they’re topic to dangers and uncertainties, which can trigger precise outcomes to materially totally different, and we undertake no obligation to replace or revise such statements because of new info.
For a dialogue of those dangers and uncertainties, please overview the cautionary language concerning forward-looking statements in as we speak’s press launch in addition to in our filings with the SEC, which will probably be obtainable on our web site.
Please take into account the earnings supplies and administration’s ready remarks as we speak embody sure non-GAAP measures. Reconciliations of those measures to probably the most related GAAP metrics will be discovered within the press launch, our earnings presentation and our upcoming SEC submitting on our web site.
With that, I will flip the decision over to Rohit.
Rohit Gupta
Thanks, Daniel. Good morning, everybody.
Our first quarter outcomes marked a robust begin to 2024. Our insured portfolio continued to develop. We operated with expense self-discipline, credit score efficiency remained sturdy and we distributed extra capital to shareholders by way of dividends and share repurchases than in any prior first quarter. This robust efficiency is a results of our dedication to our technique, our robust place out there and our deal with driving long-term worth creation for our shareholders.
Our execution will be clearly seen in our robust monetary efficiency. Web revenue for the quarter was $161 million or $1.01 per diluted share. Return on fairness was a strong 14% and insurance coverage in-force elevated 4% year-over-year to a document $264 billion, pushed by persistency of 85% and new insurance coverage written of $11 billion.
Our enterprise continues to carry out effectively as we navigate by way of a posh working setting. The U.S. economic system has been resilient with a robust labor market and wholesome family steadiness sheet, whereas macro elements akin to geopolitical conflicts, inflation and better rates of interest proceed to pose potential threat.
Having mentioned that, delinquency charges for prime mortgage debtors are in keeping with pre-pandemic ranges and our manufacturing high quality stays strong. Whereas larger borrowing prices have slowed origination, dwelling costs proceed to be supported by structurally decrease housing stock in addition to robust demand. We proceed to be optimistic concerning the pent-up demand in first-time homebuyer inhabitants as extra Individuals attain the typical first-time homebuyer age, and we imagine that mortgage insurance coverage will stay an essential device to assist consumers attain this essential milestone.
I will additionally observe that larger charges proceed to learn persistency which helps offset the impact of charges on origination volumes. The credit score high quality of our insured portfolio continues to be robust. At quarter finish, the danger weighted common FICO rating of the portfolio was 744 and the danger weighted common loan-to-value ratio was 93% and layered threat was 1.3%.
Pricing remained constructed by way of the quarter and underwriting requirements had been rigorous. Our pricing engine permits us to ship aggressive pricing on a risk-adjusted foundation, and we proceed to underwrite and choose threat prudently whereas managing to enticing returns. The delinquency price within the quarter was 2%, down 9 foundation factors sequentially and in keeping with our expectations.
Throughout the quarter, we launched $54 million of reserves pushed by favorable credit score efficiency and our efficient loss mitigation efforts. We stay effectively reserved for a variety of eventualities. We proceed to function from a place of monetary power and suppleness. At quarter finish, our PMIERs sufficiency was 163% or $1.9 billion of sufficiency and roughly 90% of our threat in-force was topic to credit score threat transfers.
The power of our capital place and money flows allowed us to each reinvest within the enterprise and return capital to our shareholders aligned with our capital allocation precedence. We have executed on strategic alternatives to increase our platform into compelling adjacencies whereas sustaining a pointy deal with our core MI enterprise.
Enact Re continues to carry out effectively and we proceed to take part in GSE CRT transactions that got here to market throughout the quarter. We stay happy with the robust underwriting and enticing return profile of Enact Re. We returned $75 million of capital to shareholders within the first quarter, given the elevated liquidity in our inventory, we elevated share repurchases within the first quarter to $49 million and stay dedicated to returning capital to shareholders.
That is additionally mirrored in as we speak’s announcement that we’re rising our quarterly dividend 16% to $0.185 per share in addition to the Board’s determination to approve a brand new share repurchase authorization of $250 million. We proceed to anticipate to ship capital returns in 2024, just like 2023 ranges.
I am additionally happy to notice that throughout the quarter, S&P upgraded EMICO’s long-term monetary power and issuer credit standing to A- secure, and EHI’s long-term issuer credit standing to BBB- secure. That is the fourth improve from S&P since our IPO and demonstrates the power of our enterprise and execution by our devoted workforce. Moreover, each Moody’s and Fitch upgraded us to a optimistic outlook reflecting our continued robust execution and optimistic monetary outcomes. All in, our robust quarter is a testomony to the dedication and onerous work of our workforce, and I thank them once more for his or her effort.
Wanting forward, we stay dedicated to serving our prospects and their debtors, whereas maximizing worth for our shareholders.
With that, I’ll now flip the decision over to Dean.
Dean Mitchell
Thanks, Rohit. Good morning, everybody.
We once more delivered robust ends in the primary quarter of 2024. GAAP web revenue for the primary quarter was $161 million or $1.01 per diluted share in comparison with $1.08 per diluted share in the identical interval final 12 months and $0.98 per diluted share within the fourth quarter of 2023. Return on fairness was 14%.
Adjusted working revenue was $166 million, or $1.04 per diluted share in comparison with $1.08 per diluted share in the identical interval final 12 months, and $0.98 per diluted share within the fourth quarter of 2023. Adjusted working return on fairness was 14%.
Turning to income drivers. Main insurance coverage in-force elevated within the first quarter to a brand new document of $264 billion, up $1 billion sequentially and up $11 billion or 4% year-over-year. New insurance coverage written was $11 billion up $1 billion sequentially and down $3 billion or 20% year-over-year.
The year-over-year decline was primarily pushed by a decrease estimated MI market dimension and the decrease estimated market share. Persistency was 85% within the first quarter, down 1 proportion level sequentially and flat year-over-year. Solely 4% of the mortgages in our portfolio had charges at the very least 50 foundation factors above the prevailing market price. In distinction, virtually 80% of the mortgages in our portfolio had charges at or beneath 6%, effectively beneath prevailing charges, whereas charges stay elevated, we anticipate elevated persistency to proceed, which can assist offset decrease manufacturing ensuing from larger mortgage charges.
Web premiums earned had been $241 million, up $1 million sequentially and up $6 million or 2% year-over-year. The sequential improve in web premiums earned was primarily pushed by the expansion in enticing adjacencies, which consist primarily of Enact Re’s GSE CRT participation.
Extra broadly, insurance coverage in-force development was offset by larger ceded premiums ensuing from the profitable execution of our CRT program. The year-over-year improve was pushed by insurance coverage in-force development and partially offset by larger ceded premiums and the lapse of older, higher-priced insurance policies.
Our base premium price of 40.1 foundation factors was flat sequentially and down 0.4 foundation factors year-over-year. Keep in mind that our base premium price is impacted by a number of elements and tends to modestly fluctuate from quarter-to-quarter. We anticipate yields to stabilize round present ranges in 2024.
Our web earned premium price was 36.3 foundation factors, down 0.1 foundation factors sequentially, primarily reflecting larger ceded premiums within the present quarter. Funding revenue within the first quarter was $57 million, up $1 million or 2% sequentially and up $12 million or 26% year-over-year. Larger rates of interest have elevated our funding portfolio yields and as our portfolio rolls over, we anticipate additional yield enchancment. Throughout the quarter, our new cash funding yield exceeded 5%, contributing to an general portfolio e-book yield of three.7%.
Our focus stays on high-quality property and sustaining a resilient A-rated portfolio. Whereas we usually maintain investments till maturity, we selectively pursue revenue enhancement alternatives. Throughout the quarter, we executed a technique leading to $7 million of pretax losses in change for larger future funding revenue. We’ll proceed to guage related alternatives however this doesn’t change our view that our funding portfolio’s unrealized loss place is materially noneconomic.
Turning to credit score. Losses within the quarter had been $20 million in comparison with $24 million final quarter and adverse $11 million within the first quarter of 2023. Our loss ratio for the quarter was 8% in comparison with 10% final quarter and adverse 5% within the first quarter of 2023. Sequentially, our losses and loss ratio had been pushed by the present quarter delinquencies that mirror seasonal tendencies.
12 months-over-year, our losses and loss ratio within the present quarter had been pushed by the traditional loss improvement of recent giant books and a decrease reserve launch. Throughout the quarter, we continued to see favorable pure efficiency from early 2023 and prior delinquencies above our expectations, which resulted in a $54 million reserve launch within the quarter as in comparison with reserve releases of $53 million and $70 million within the fourth quarter of 2023 and first quarter of 2023, respectively.
New delinquencies decreased sequentially to $11,400 from $11,700. Our new delinquency price for the quarter was 1.2% in comparison with 1% within the first quarter of 2023 and flat sequentially. We proceed to e-book new delinquencies at an approximate 10% declare price, reflecting our prudent strategy to reserving within the present macroeconomic setting. Complete delinquencies within the first quarter decreased sequentially to $19,500 from $20,400. The first delinquency price decreased 9 foundation factors sequentially to 2%, in keeping with our expectations and consistent with pre-pandemic ranges.
Turning to bills. Working bills for the primary quarter of 2024 had been $53 million, down $6 million or 10% sequentially and down $1 million or 2% year-over-year, reflecting our ongoing dedication to expense self-discipline. The expense ratio for the quarter was 22%, down 3 proportion factors sequentially and down 1 proportion level year-over-year.
As a reminder, our bills are weighted in the direction of the second half of the 12 months and thus, we are going to nonetheless anticipate bills to be within the vary of $220 million to $225 million over the course of 2024.
Transferring to capital. We proceed to function with a robust capital base and liquidity place bolstered by our sturdy PMIERs sufficiency and continued success within the execution of our diversified CRT program. Our PMIERs sufficiency was 163% or $1.9 billion above PMIERs necessities on the finish of the primary quarter. Moreover, on the finish of the primary quarter, 90% of our threat in-force was topic to credit score threat transfers, and our third-party CRT program gives $1.7 billion of PMIERs capital credit score.
As beforehand introduced, we closed new quota share and new extra of loss reinsurance transactions throughout the quarter. Moreover, we elevated our affiliate quota share from 7.5% to 12.5% of a portion of our in-force enterprise, together with 12.5% of 2024’s new insurance coverage written. These affiliated transactions will leverage in Enact Re’s present capital and assist new enterprise alternatives, primarily consisting of GSE credit score threat switch.
Turning to capital allocation. We proceed to execute in opposition to our capital prioritization framework, which balances sustaining a robust steadiness sheet, investing in our enterprise and returning capital to shareholders. Throughout the quarter, we paid out $26 million by way of our quarterly dividend, and we repurchased 1.8 million shares at a weighted common share worth of $27.51 for a complete of $49 million of repurchases by way of our share repurchase program.
In April, we repurchased an extra 0.4 million shares at a weighted common share worth of $30.07 for a complete of $12 million repurchased. And as of April 30, 2024, there was roughly $24 million remaining on our present share repurchase authorization.
Right this moment, we introduced a 16% improve to our quarterly dividend from $0.16 to $0.185 per share, and the Board permitted a brand new share repurchase authorization of $250 million. Each actions mirror the continued power of our monetary place and confidence in our enterprise.
As with our prior share buyback applications, Genworth will take part proportionately. As a reminder, we nonetheless anticipate whole 2024 capital return ranges to be just like the $300 million we delivered in 2023. As up to now, the ultimate quantity within the type of capital return to shareholders will in the end rely upon enterprise efficiency, market circumstances and regulatory approvals.
Total, we’re happy with our robust begin to 2024 and stay centered on prudently managing threat, sustaining a robust steadiness sheet and driving strong returns for our shareholders.
With that, I will flip the decision again to Rohit.
Rohit Gupta
Thanks, Dean.
Wanting forward, I proceed to be inspired by the long-term dynamics of our market, and I am assured in our capacity to understand the alternatives forward of us and our workforce’s capacity to execute in opposition to our technique and ship worth. Our dedication to responsibly assist extra folks grow to be owners, motivates all the pieces we do and has by no means been stronger.
Operator, we at the moment are prepared for Q&A.
Query-and-Reply Session
Operator
[Operator Instructions] And our first query goes to return from the road of Doug Harter with UBS. Your line is open. Please go forward.
Doug Harter
Thanks. First, I used to be simply hoping you would form of give us an replace as to form of the way you see the overall marketplace for NIW progressing form of because the 12 months unfolds, form of what affect from the Re improve in charges that you just’re seeing on both form of the underlying high quality of functions or the quantity of functions?
Rohit Gupta
Good morning, Doug, thanks for the query. So I might say, given the volatility we’ve seen in charges up so far within the 12 months, it’s tough to forecast originations with a slim vary. I supplied our view final quarter, the place we principally mentioned that we anticipate MI market to be usually consistent with 2023 market dimension.
Simply so as to add some shade to that, I might say, going into spring promoting season, we’re seeing general shopper demand together with first-time homebuyer demand persevering with to be robust. And the shoppers who’re coming to the market at this level are used to six% to 7% mortgage charges. And now the problem principally that we face out there is lack of stock out there and among the volatility we’ve seen within the final month or so in price. So our view continues to be that MI is a really useful product for shoppers, particularly first-time homebuyers to get into houses.
In order we see that origination quantity come by way of MI merchandise will proceed to get excellent penetration out there. However all that being mentioned, at this level of time, our expectation is the MI market dimension to be usually consistent with 2023. Simply to offer you a historic knowledge level, that stage of market dimension is similar to 2018 market dimension inside like $5 billion, $6 billion of that. And likewise, our persistency continues to supply a pure hedge in our enterprise, as larger charges are a tailwind for the retention of our present portfolio.
And Doug, your query on, sorry, I missed your query on manufacturing and credit score high quality. So we proceed to see, as I mentioned in my ready remarks, we proceed to see manufacturing high quality and credit score high quality stays robust. And from a quantity perspective, we proceed to have each nondelegated and delegated volumes. So both by way of direct underwriting or by way of our audit whereas we proceed to observe that. And as I mentioned in our ready remarks, we proceed to be ok with that.
Doug Harter
I assume simply on that, what are you seeing round affordability on new purchases, form of how are shoppers dealing with the upper charges from an affordability perspective?
Rohit Gupta
Sure Doug, excellent query. In order I mentioned earlier than in my remarks, I believe at this level of time, shoppers who’re coming to market are ready for that 6% to 7%, 30-year mounted mortgage price. So we’re seeing these shoppers undergo the applying course of and really get certified. After which given the truth that we’ve very granular risk-based pricing, we are able to worth these loans aligned with our view of threat and returns, each in base case and stress case.
So from a shopper qualification perspective, whereas we’ve seen sure metrics transfer up just like what we noticed in earlier buy market. So if you concentrate on mortgage to worth, mortgage to values are again to the 2018 stage. If you concentrate on debt-to-income and FICO, they’re very indicative of a purchase order market. So we’re seeing these markets the place we’ve seen these historically. However from a shopper qualification perspective, we proceed to be ok with the shoppers we’re placing on our books and proceed to be ok with the enticing returns we are able to generate from these insurance policies.
Operator
And our subsequent query goes to return from the road of Mihir Bhatia with Financial institution of America. Your line is open. Please go forward.
Unidentified Analyst
That is Caroline on for Mihir. Thanks for taking my query. Are you able to talk about rate of interest buydowns. Is that product very prevalent out there? And may you present any feedback on the way you’re underwriting that one, if any totally different than different mortgages?
Rohit Gupta
Sure. Good morning, Caroline, thanks for the query. In order we take into consideration rate of interest buydowns, we proceed to see rate of interest buydowns out there as a robust product for shoppers proper now. We talked about this on our earnings name a number of quarters in the past. So the pattern has been very related. We do not publish that as an express metric in our financials, however we proceed to observe internally. And I might say there are two flavors of rate of interest buydowns. One taste is short-term rate of interest buydowns the place the rate of interest on the mortgage is introduced down for 1 to 2 years by the lender, and there are some limitations on how a lot cash the lender can use to try this.
We see that as nonetheless a prudent product as a result of the patron is certified on the full price, not on the teaser price of the mortgage. So it is a well-qualified shopper. After which the second taste is builder commitments, the place builder originators particularly buydown the observe price for the lifetime of the mortgage, and we see that additionally coming by way of on a constant foundation. And in that case, the patron doesn’t have any form of rate of interest change of their mortgage. And consequently, the patron is effectively certified for the mortgage. So I might say our utilization of these merchandise are coming from totally different channels, totally different originators, however we proceed to see the utilization being constant to what we’ve seen up to now.
Unidentified Analyst
Superior. That is tremendous useful. After which additionally, are you able to speak about embedded fairness within the delinquent stock and any stats you possibly can share on that?
Rohit Gupta
Sure, so Caroline, on this quarter, in our earnings presentation, we did really had that again on Web page 13 of the presentation. So you possibly can see on delinquent insurance policies, that are round 2% of our portfolio, 94% of these insurance policies really had mark-to-market fairness of larger than 10%. And that is primarily based on dwelling costs on the finish of 2023 for insurance policies on the finish of first quarter. After which, 81% of our delinquent insurance policies really had mark-to-market fairness of greater than 20% utilizing the identical methodology, which is utilizing dwelling costs for finish of 12 months ’23 and on our portfolio on the finish of first quarter.
Operator
And our subsequent query goes to return from the road of Bose George with KBW. Your line is open. Please go forward.
Bose George
Truly, I wished to ask your default to assert price at 10% stays a few factors above the friends have reported. I do know all of it form of nets out by way of the recoveries, however what would that you must see to take that down in all probability nearer to the 7% to eight% that among the others are utilizing?
Dean Mitchell
Sure, Bose, thanks for the query. And simply as a reminder, possibly to set the desk for this, our reserves and our roll charges that you just simply referenced on new delinquencies, they’re at all times our greatest estimate of final claims. However as we decide the perfect estimate, we contemplate numerous financial outcomes to make sure that we’re appropriately reserved, even when financial pressures emerge. If we pivot now to the ten% declare price on new delinquencies, we set that basically not consistent with something we had seen from a efficiency perspective, efficiency stays very robust. What we actually did was, took into consideration the truth that there was some heightened macroeconomic uncertainty. And we imagine that it was actually prudent to ponder that within the institution of that 10% roll price.
Over time, to your level, we have seen financial resiliency. And consequently, we have seen elevated cures on prior accident 12 months delinquencies. In order that heightened view of uncertainty hasn’t materialized. If we simply form of carry up, we nonetheless imagine it is prudent and measured, strategy is suitable at this time limit. What would change that strategy? I believe if we noticed the chance or the likelihood of financial pressures lower materially on a go-forward foundation and/or if we gave extra reliance on the more moderen efficiency and a bit bit much less reliance on that judgment that is primarily based on the macroeconomic uncertainty. I believe if both a type of occurred, we’ve to take a tough take a look at the appropriateness of the present 10% declare price.
Bose George
Okay. Nice. That is useful. Thanks. After which simply switching over to capital return. Dean, you famous the $300 million will probably be just like final 12 months. Is the combo between buybacks and dividends additionally going to be the identical, simply given the robust begin on buybacks? Simply curious if there’s any change there?
Dean Mitchell
Sure, Bose, that is a terrific query. Once more, as we have mentioned up to now, we actually have 3 ways to return capital to shareholders, strange dividends, share repurchases, and particular dividends. We actually take into consideration these form of in a waterfall strategy. On the high of the waterfall, it is quarterly dividends. We sized these to be each aggressive and sturdy, even below stress.
So the 16% improve within the quarterly dividend this quarter, I believe, displays our confidence in our capacity to keep up that $0.185 dividend per share by way of time and thru financial cycles. It is actually on the high of the waterfall as a result of it will increase the understanding of capital return to shareholders. Share repurchases in distinction are a bit bit extra opportunistic. They’re primarily based on, clearly, the prevailing market circumstances and once I say that, it is particularly associated to our share worth and our liquidity, given our restricted float.
After which lastly, particular dividends are form of that extra blunt instrument that permits us to return the deliberate capital to shareholders in extra of quarterly dividends and share repurchases. We usually try this on the finish of the 12 months.
I believe final quarter, as we emphasize the potential elevated reliance on share repurchases, given the alternatives we had been seeing on the finish of final 12 months and originally of this 12 months associated to our share worth, along with the improved liquidity in our inventory. When you take a look at our first quarter outcomes, I believe they present execution in opposition to that expectation, the place we repurchased virtually $50 million within the quarter. And for comparability functions, we repurchased about $87 million throughout all of 2023. So I believe you do see us relying extra closely on share repurchases.
I believe go ahead, the tempo of share repurchases goes to be largely dictated by market alternatives. If we see and proceed to see accretive market alternatives, I believe you will see us proceed to execute the share repurchase program at that elevated tempo, if that does not happen, we’ll rely extra closely on particular dividends at year-end as a approach to distribute our deliberate capital for the complete 12 months.
Operator
And our subsequent query goes to return from the road of Rick Shane with JPMorgan. Your line is open. Please go forward.
Rick Shane
And Bose actually touched upon what I wish to deal with too, which is clearly, the cadence of capital return within the first quarter, given the power of the buyback plus rising the dividend beginning within the second suggests that you’re above the run price of capital returns roughly similar to 2023 ranges, and also you, I believe, talked concerning the dynamics. And I believe the clear takeaway is that as you strategy the tip of the 12 months, the particular dividend is kind of the flex to get you there relying upon alternatives on buyback and common dividend.
I’m curious given the power of earnings and what I believe everyone goes to remove is a fairly favorable outlook, what it will take so that you can really doubtlessly elevate the overall capital return, whether or not it is 5% or 10%. Is that one thing that you would envision because the 12 months unfolds if the trajectory stays as robust?
Dean Mitchell
Sure, so Rick, respect the questions. I wish to begin off with the steerage because it pertains to capital return for full 12 months 2024 that continues to be at $300 million. Actually, what I believe Bose’s query obtained to is the way in which wherein we’re returning that $300 million and doubtlessly even the timing of how that $300 million will get returned to shareholders. And I do assume that timing may improve once more if we see opportunistic market alternatives to flex our share repurchase program in an accelerated and greater method, very like we have completed in Q1. A lot extra to do with timing and means than quantum or quantity of whole capital return for full 12 months 2024.
That mentioned, what would trigger us to return again and revisit the $300 million? Clearly, enterprise efficiency is a key driver. If we see enterprise efficiency above our expectations. If we see continued enchancment within the macroeconomic setting, and/or we see a regulatory setting that’s extra accommodative. I believe these are all issues that we contemplate as we take into consideration the institution of the suitable quantity of capital return heading into any 12 months and all year long as we progress.
Rick Shane
Acquired it. And look, the opposite issue right here is that NIW for the quarter down, there are definitely some headwinds as effectively. How a lot does development or accelerated development or decelerating development of the portfolio affect that call as effectively?
Rohit Gupta
Good morning, Rick. That undoubtedly is an enter. And as Dean mentioned, that may be captured in enterprise efficiency. As you heard me reply a earlier query, our steerage proper now for MI market dimension for 2024 is to be just like that of 2023. Total, in 2023, we wrote a good-sized e-book. We additionally printed excellent enterprise outcomes when it comes to revenue expression for your complete 12 months. I believe in 2024, we take a look at very related metrics. How a lot new enterprise we’re writing in our core MI enterprise, how a lot enterprise are we writing in our Enact Re enterprise. After which along with that, how is the core e-book performing when it comes to loss ratios and revenue.
After which that, mixed with the regulatory setting in addition to our view wanting ahead within the economic system, I believe all this stuff undoubtedly go into our view of do we alter our capital steerage. Up to now, when our view has gotten stronger throughout the 12 months, we had completed that in prior years, so we’ll proceed to maintain the market up to date.
Operator
And our subsequent query comes from the road of Soham Bhonsle with BTIG. Your line is open. Please go forward.
Soham Bhonsle
So I assume first query alongside the traces of capital return. I used to be inquisitive about kind of the choice to lift the buyback or improve the buyback to 250 and the 16% improve within the dividend, which is nice. However Rohit, may you possibly present some shade on simply the framework that possibly you and the Board used as you had been kind of setting that vary? I am notably curious on kind of the macro portfolio assumptions that you just possibly contemplate to simply get to that 250. Any perception can be nice. Thanks.
Rohit Gupta
Good morning, Soham. Thanks for the query. So each on elevated share buyback in addition to elevated dividend. I believe the very first thing I might begin with is simply the efficiency of our portfolio, efficiency of our enterprise, mixed with our view of the power of our steadiness sheet. So I believe, as I mentioned in my ready remarks, we proceed to create a stronger steadiness sheet. You noticed that being acknowledged by the exterior market when it comes to score company upgrades in 2023, early 2024. And even lately, we noticed two outlook adjustments along with that being optimistic. So all of that could be a proof level that the Board and I really feel comfy concerning the power of steadiness sheet and enterprise outcomes. So I might say that simply goes into the arrogance image on capital return.
Now inside the capital return, as Dean outlined beforehand, we take into consideration totally different autos of returning capital. From a dividend perspective, we take into consideration the traditional concerns that you’d anticipate us to have a look at, which is earnings, aggressive setting, the resiliency of that dividend and having that confidence.
In order that principally drove the 16% improve to $0.185 per share of dividend improve. After which along with that, after we take into consideration share buyback, along with the concerns I simply outlined, we additionally take into consideration our liquidity out there, and Dean talked about it as a result of in our thoughts for our share buyback program, our first objective along with the traditional concerns is do no hurt out there from a liquidity perspective.
Simply to offer you a perspective, Soham, on our liquidity. From January of 2023 to April of 2024. Our liquidity primarily based on common every day buying and selling quantity has elevated by 150%. So we at all times assume that if the share costs are buying and selling on the proper stage and given our view of intrinsic worth, we’d wish to use that car so long as we predict the liquidity is sweet.
So the board noticed that as constructive and labored with our advisers to place our view collectively, which gave us confidence to start out the following share buyback authorization at a better facet. That being mentioned, we’ll at all times preserve taking a look at that metric on an ongoing foundation. So if we see that we’re negatively impacting liquidity in any method, we are able to change the car and that is the place the third car of capital return, which is a particular dividend is at all times obtainable to us. So I believe we have exercised that flexibility within the final 3 years very prudently, and we intend to try this shifting ahead.
Soham Bhonsle
Acquired it. Okay. Thanks for the colour. After which on the embedded fairness disclosure this quarter, tremendous useful. I imply it is outstanding that 70% of the portfolio nonetheless has 20% or extra. And even your DQs are sitting on 80% or extra at 20%. So I imply, assuming that dwelling costs simply stay secure, proper, they usually do not go up or down and within the situation the place kind of the borrower defaults as we speak. What do you really assume is a sensible situation for what you would be on the hope for since you nonetheless have reinsurance that’s sitting on the again finish right here. And so I believe it’ll simply be useful for those who may kind of characterize for buyers the vary of outcomes in a possible default situation, assuming that embedded fairness simply stays secure going ahead?
Rohit Gupta
Sure, Soham, excellent query. So I might say from an embedded fairness perspective, that could be a tailwind for our portfolio. I believe a very good expression of what you see on Web page 13, the numbers you simply talked about, are pushed by some fairly important will increase in 2020 and 2021.
So I do wish to acknowledge that as a result of that’s not regular in our market. I believe the house worth appreciation numbers you are seeing proper now, together with the quantity that simply got here out a number of days in the past, are way more within the vary of what we’ve seen traditionally. So you will note that normalize over a time period.
That being mentioned, dwelling worth appreciation is a tailwind for us, each on frequency and severity in terms of losses. Frequency as a result of shoppers earlier than they really go into delinquency, in the event that they’re capable of promote their dwelling as a result of they’ve sufficient fairness constructed up that frequency by no means occurs. After which, second factor, even when they go delinquent they usually can promote their dwelling utilizing a presale as a substitute of getting foreclosed on, that reduces frequency, and in some circumstances, severity.
So I believe these are the mitigants in our market. It is tough to place that in quantitative phrases as a result of shoppers who keep delinquent and eventually get to assert are usually the shoppers the place that dwelling worth appreciation and embedded fairness was not ample to utterly offset the declare. So by the point shoppers get to assert, these claims do come nearer to 100% severity, however alongside the journey, we see improved treatment charges due to the elements you outlined. And for those who take a look at the treatment price efficiency of our e-book during the last 8 quarters or so, you see that efficiency coming by way of pushed by these elements.
Soham Bhonsle
Acquired it. And if I may simply squeeze yet another. I imply NIW outcomes are nonetheless coming in for the entire sector. Nevertheless it does appear like your NIW declined a bit bit greater than friends this quarter. So I am simply questioning, what had been you seeing out there on the market, proper? Are you taking a special view on sure cohorts? Anything that is notable can be useful.
Rohit Gupta
Soham, thanks for the query. Are you referring to year-over-year decline or quarter-over-quarter?
Soham Bhonsle
Ye, year-over-year.
Rohit Gupta
Soham when you concentrate on our market participation, very first thing, as you mentioned, we do not have ultimate market share numbers. So it is nonetheless robust to inform the place we landed within the general market, we’ll know on Friday. Second factor, I might simply emphasize is after we take into consideration our NIW, we just like the profile of the $10.5 billion we wrote. We just like the profile from a pricing and blend perspective. I made the purpose in my ready remarks that we noticed pricing out there being constructive, and we took a number of pricing actions out there to make it possible for from a threat choice perspective and return perspective, we had been really driving the precise e-book.
So that every one being mentioned, I might say, from a year-over-year perspective, our market share in first quarter 2023 was really barely elevated, and that might be pushed by sure different gamers pulling again from the market primarily based on their threat urge for food. Our threat urge for food has been usually very secure. However proper now, we imagine that our market participation may be very a lot consistent with our expectations. We consider our share and that is 16% to 18% vary and we imagine that is the place we’re touchdown.
And for those who take a look at our participation in fourth quarter ’23 and first quarter ’24, you will see these numbers usually being secure. We would have been flat. We would have misplaced a bit bit, however we do not assume that, that is a difficulty with our technique. And as a reminder, we do not deal with share as a metric, we deal with form of our proper technique of driving the precise worth for the precise threat and managing our layered threat focus and we imagine we’re doing the precise job on that entrance.
Operator
I might now like to show the convention again to Rohit Gupta for any additional remarks.
Rohit Gupta
Thanks, Michelle. We respect everyone’s curiosity in Enact, and I look ahead to seeing you in New York on the BTIG Housing Ecosystem Convention subsequent week. Thanks.
Operator
This concludes as we speak’s convention name. Thanks for taking part. You could now disconnect.