Essent Group Ltd reported a 7 per cent increase in quarterly profit as its expansion into property and casualty reinsurance drove a sharp rise in premiums.

The Bermudian-based mortgage re/insurer recorded second-quarter net income of $189.7 million, or $2.08 per diluted share, compared with $177 million, or $1.93 per share, a year earlier.

Essent’s reinsurance segment wrote net premiums of $249 million during the first half of 2026, up from $31 million in the same period last year.

Net premiums earned by the segment rose to $73 million from $30 million, due to the company’s move into non-mortgage P&C reinsurance.

Mark Casale, Essent’s chairman and chief executive, said the results show “strong profitability, continued growth in book value per share and the resilience of our operating model.

“The consistent cash flow generation of our mortgage insurance business, combined with our strong capital position, allows us to take a balanced approach to capital management and to continue creating long-term value for our shareholders.”

On an earnings call on Friday, he said: “We continue to expect written premium of approximately $320 million for our P&C reinsurance activity in 2026, with roughly half earned this year at a combined ratio in the high 90s.”

He said the P&C portfolio was weighted towards casualty and speciality business and required minimal extra capital from Essent Re, the group’s Bermudian-based reinsurance subsidiary.

However, mortgage risk and a related managing general agent business should keep being the main drivers of the reinsurance segment’s earnings in the near term.

The segment’s combined ratio rose to 77.9 per cent in the second quarter, from 69.6 per cent in the first quarter and 19.4 per cent a year earlier.

Management said the increase was expected and was because of the changing mix between highly profitable mortgage reinsurance and the growing conventional P&C portfolio. The contribution from P&C business to underwriting income was not yet material.

Essent Re paid a $100 million dividend to its parent during the quarter. Across the group, cash and investments stood at $6.6 billion at June 30, while the annualised investment yield was 4.9 per cent.

Essent’s core mortgage insurance business ended the quarter with $249.7 billion of insurance in force, up 1.2 per cent year-on-year. Persistency — the percentage of mortgage insurance policies that remain from one year to the next — stayed high at 84 per cent, partly because nearly half of the portfolio carries mortgage rates of 5.5 per cent or lower, so owners are less likely to refinance or move.

Mr Casale said affordability issues still limit mortgages, leaving portfolio growth “in a pause”. He added that demographic shifts and pent-up housing demand should support the business when housing becomes more affordable.

Essent repurchased nearly six million shares for approximately $350 million during the year through July 31. Its board declared a third-quarter dividend of 35 cents per common share.