Essent Group Ltd sought to reassure investors about the health of the United States housing market after its reinsurance segment posted a sharp increase in losses during the first quarter.

The Bermudian-based mortgage insurer reported that its reinsurance loss ratio rose to 33 per cent from virtually zero a year earlier, although the segment remains a relatively small part of the business.

Speaking on the company’s earnings call, Mark Casale, chairman and chief executive, said the increase did not mean stress is showing in the broader mortgage market.

“We are not seeing any real cracks,” Mr Casale said. “There is really a normalisation of the credit.”

He said higher defaults were largely tied to the seasoning of older policies rather than a fall in underwriting quality or borrower behaviour.

The company reported quarterly net income of $171.8 million, down slightly from $175.4 million a year earlier.

Essent’s reinsurance segment is also starting to expand beyond traditional mortgage risk-sharing into property and casualty reinsurance, which management said led to higher premiums, acquisition costs and losses during the quarter.

While executives dismissed concerns about mortgage-market weakness, the quarter still showed volatility accompanying Essent’s expanding its reinsurance operations.

Executives noted, however, that pretax earnings from the new P&C reinsurance operations were “immaterial” in the period, with the segment still mostly tied to mortgage-related business.

Mr Casale said the company has been benefiting from favourable credit conditions and higher interest rates.

“We are pleased with our first-quarter 2026 financial results, which continued to benefit from favourable credit trends and the impact of interest rates on both persistency and investment income,” he said.

During the quarter, Essent Guaranty entered into a new excess-of-loss reinsurance agreement with third-party reinsurers covering business to be written in 2027.