Radian 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 20 Feb 2026, plus the 10-Q filed 7 Aug 2026 and 8 later 8-Ks.

• Sales have shrunk: 3.6% a year.

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

• In our Specialty Insurance business, we could face losses from geopolitical tensions, hostilities, war, terrorism, pandemics, cyberattacks and general political instability, and these or other unanticipated losses could have a material adverse effect on our financial condition and results of operations.

  Could happen

  In certain instances, we specifically insure and reinsure risks resulting from acts of terrorism. Given the unpredictable frequency and severity of terrorism losses, as well as the limited terrorism coverage provided by the reinsurance coverage that our Specialty Insurance business obtains, future losses from acts of terrorism could materially and adversely affect our results of operations, financial condition or liquidity in future periods.

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• The amount of capital that we must hold to maintain our various capital requirements can vary significantly from time to time and the capital needed to maintain those requirements may not be available or may only be available on unfavorable terms.

  Could happen

  We participate in the Lloyd’s market through our ownership of Inigo Corporate Member Limited and Inigo Managing Agent Limited, two of our U.K. subsidiaries. Inigo Corporate Member Limited provides underwriting capacity to Syndicate 1301 and is a Lloyd’s corporate member. Underwriting capacity of a member of Lloyd’s must be supported by providing a Funds at Lloyd’s (“FAL”) deposit in the form of cash, securities or letters of credit. The level of FAL that Lloyd’s requires a member to maintain is determined by Lloyd’s based on PRA requirements and resource criteria. FAL is set with reference to the syndicate’s Solvency Capital Requirement under a capital adequacy model plus an economic capital assessment determined by Lloyd’s, known as the Lloyd’s uplift. The determination of FAL is made based on a number of factors including the nature and amount of risk to be underwritten by the member and the assessment of the reserving risk in

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• Our insurance subsidiaries are subject to comprehensive insurance regulations and other requirements, which we may fail to satisfy. Changes to existing regulation and supervisory standards, or failure to comply with them, could have a material adverse effect on our business, results of operations and financial condition.

  Could happen

  Our newly acquired international subsidiaries are subject to the laws and regulations of the relevant jurisdictions in which they operate, including for Inigo Managing Agent Limited the requirements of the PRA and the Financial Conduct Authority in the U.K. Our Lloyd’s syndicate, Syndicate 1301, is also subject to management and supervision by the Society of Lloyd’s, which has wide discretionary powers to regulate members’ underwriting at Lloyd’s, as well as international regulations imposed by regulators where the Lloyd’s syndicate conducts business. As we grow our Specialty Insurance business and operations, we expect continued and enhanced regulatory oversight, including increased expectations of Lloyd’s Principles-based Oversight Framework and the PRA.

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• We establish our reserves for losses in our insurance businesses based on models, assumptions and estimates, which are subject to inherent uncertainties, and if incorrect, may result in us being required to take unexpected charges to income, which could adversely affect our results of operations.

  In our Specialty Insurance business, the estimation of loss reserves is inherently uncertain, particularly due to the unpredictability of catastrophic events. There also may be significant reporting lags between the occurrence of the insured event and the time it is reported, and additional lags between the time of reporting and final settlement of claims, any of which can increase the level of uncertainty related to our loss reserve estimates. Further, periods of geopolitical uncertainty and hostilities, such as we have experienced in recent years, involve highly unpredictable factors that can increase the level of uncertainty in our estimation of loss reserves. In our Specialty Insurance business in particular, in recent periods, the Russia-Ukraine war has raised numerous policy-related questions and challenges regarding scope of coverage and terrorism exceptions, which have increased reserving uncertainties. These periods of geopolitical uncertainty and hostilities can increase inflationary pressures in local economies, and changes in the level of inflation can also result in an increased level of uncertainty in our estimation of loss reserves. As a result, actual losses paid can deviate, perhaps substantially, from the reserve estimates reflected in our financial statements. As a compounding factor, although most insurance contracts in our Specialty Insurance business have policy limits, the nature of property and casualty insurance and reinsurance is such that losses and the associated expenses can exceed policy limits for a variety of reasons and could significantly exceed the premiums received on the underlying policies, thereby further adversely affecting our financial condition.

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• If our loss limitation strategy in our Specialty Insurance business is unsuccessful it could have a material adverse effect on our results of operations, financial condition or liquidity.

  Could happen

  We seek to mitigate loss exposure in our Specialty Insurance business through multiple methods that might prove to be unsuccessful. For example, we write a number of reinsurance contracts on an excess-of-loss basis that indemnifies the reinsured for losses in excess of a specified amount. We generally limit the line size for each client and each line of business in our insurance business, and purchase reinsurance/retrocession protection for many of our lines of business. We utilize proportional reinsurance and on an account-by-account basis, we may also put in place facultative reinsurance. We also purchase protection to limit the impact to us from large catastrophes, especially natural catastrophes arising from specific catastrophe perils (like hurricanes and earthquakes) in areas known to be exposed to such perils. This is achieved both through traditional reinsurance/retrocession covers, and through catastrophe bonds issued in the capital markets. We also seek to limit our loss exposure through geographic diversification. In addition, various provisions of our insurance policies and reinsurance contracts, such as limitations or exclusions from coverage or choice of forum negotiated to limit our risks, may not be enforceable in the manner we intend. We cannot be sure that these loss limitation methods will effectively prevent a material loss exposure, which could have a material adverse effect on our financial condition and results of operations.

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