Essent Group

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 18 Feb 2026, plus the 10-Q filed 7 Aug 2026 and 2 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• Our results could be adversely affected by catastrophic events.

  Could happen

  Through our reinsurance arrangements with participants in the Lloyd’s insurance markets we are exposed to, and to the extent that we enter into new non-mortgage reinsurance arrangements in the future we may be further exposed to, unpredictable catastrophic events, including, but not limited to, weather-related and other natural catastrophes, as well as political unrest, geopolitical uncertainty and instability, acts of terrorism and wars, pandemics and communicable diseases, and cyber-risks. We cannot predict or eliminate our exposure to these loss events, and as a result, our operating results may be significantly affected by the frequency and severity of such events. Furthermore, the frequency and/or severity of catastrophic events may be impacted in the future by the continued effects of climate change. Climate change and resulting changes in global temperatures, weather patterns, and sea levels may both increase the frequency and severity of natural catastrophes and the resulting losses in the future and impact our risk modeling assumptions. We cannot predict the impact that changing climate conditions, if any, may have on our results of operations or our financial condition. Additionally, we cannot predict how legal, regulatory and/or social responses to concerns around global climate change and the resulting impact on various sectors of the economy may impact our business. The occurrence, or nonoccurrence, of catastrophic events, the frequency and severity of which are inherently unpredictable, may cause significant volatility in our quarterly and annual financial results and may materially adversely affect our financial condition, results of operations and cash flows.

  Read moreShow less

• Underwriting risks and reserving for losses in our non-mortgage reinsurance business are based on actuarially determined methods and assumptions, which are subject to inherent uncertainties.

  Could happen

  The success of our non-mortgage reinsurance businesses is dependent upon our ability to assess accurately the risks associated with the businesses that we reinsure. We establish reserves for losses and loss adjustment expenses in our non-mortgage reinsurance business which represent estimates based on actuarial and statistical projections, at a given point in time, of our expectations of the ultimate future settlement and administration costs of losses incurred. We utilize actuarial models as well as available historical insurance industry loss ratio experience and loss development patterns to assist in the establishment of loss reserves. Most or all of these factors are not directly quantifiable, particularly on a prospective basis, and the effects of these and unforeseen factors could negatively impact our ability to accurately assess the risks of the reinsurance policies that we write. Changes in the assumptions used could lead to an increase in our estimate of ultimate losses in the future. In addition, there may be significant reporting lags between the occurrence of the insured event and the time it is reported to the insurer and additional lags between the time of reporting and final settlement of claims. In addition, the estimation of loss reserves is more difficult during times of adverse economic and market conditions due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties or increased frequency of small claims. Changes in the level of inflation also result in an increased level of uncertainty in our estimation of loss reserves. As a result, actual losses and loss adjustment expenses paid can deviate, perhaps substantially, from the reserve estimates reflected in our financial statements.

  Read moreShow less