Thirty-Nine Percent, Then Three

On September 17, 2021, Enact Holdings filed the prospectus that would take it public. The terms came down to two numbers: 13,310,400 shares of common stock, priced at $19.00 each, listing on the Nasdaq Global Select Market under the symbol ACT. A third number was missing. Enact was not selling a single share and would not receive a dollar of the proceeds. Its parent, Genworth Holdings, was the seller.

A company that goes public without raising money has not raised capital. It has been put up for sale in public, in instalments.

Rohit Gupta, Enact's president and chief executive officer, had been running it for eight years by then.

The Year The Losses Came

Gupta took the chief executive seat at Enact in March 2013, and at its principal insurance subsidiary, Enact Mortgage Insurance Corporation, in May 2012. He had joined that subsidiary in 2003, arriving from three years at GE Capital as a marketing director and senior product manager, and before that from FedEx, where he began in strategic marketing running competitive intelligence for senior management. He is a computer science graduate of the Indian Institute of Technology with an MBA in finance from the University of Illinois at Urbana-Champaign. Twenty-three years on, he is still inside the same balance sheet.

Then 2020 arrived.

Mortgage insurance earns steadily and loses suddenly. In 2020 Enact incurred $380 million of losses against $971 million of earned premium - a loss ratio of 39 percent. The fourth quarter alone carried $89 million of incurred losses and a 35 percent loss ratio. Net income for the year was $370 million. At the end of the third quarter of 2020, 5.4 percent of the loans Enact insured were in default, and its capital stood at 132 percent of the level required under the Private Mortgage Insurer Eligibility Requirements, the regulatory floor that governs whether a mortgage insurer may keep writing business at all.

That was the balance sheet Genworth was trying to sell.

Four Quarters To Three Percent

The listing went through in September 2021. Genworth booked $529 million in net proceeds and cut its ownership of Enact from 100 percent to 81.6 percent. Enact took the ratings upgrades that followed, and nothing else.

Then the numbers turned, and turned fast. By the third quarter of 2021 defaults were down to 3.1 percent and capital sufficiency had reached 181 percent, or $2,287 million above the published requirement - the highest the company had recorded. In the fourth quarter, incurred losses were $6 million. The loss ratio was 3 percent. Full-year net income came in at $547 million against $370 million the year before, on new insurance written of $97.0 billion.

Gupta's account of that quarter stayed inside the arithmetic: "With over $21 billion of new insurance written, record insurance-in-force, and favorable loss performance, this was a strong finish to a transformational year for our company."

What the sentence left out was that the same force cutting his losses was eating his book.

The Complication Is Persistency

Mortgage insurance is priced on how long policies stay on the books. In the third quarter of 2021 Enact's persistency rate was 65 percent, against a historical norm the company put at roughly 80 percent. The refinance wave that was making borrowers solvent was also making them leave. Net premiums earned fell from $251 million in the third quarter of 2020 to $243 million a year later, even as insurance in-force grew 10 percent. Loss performance and revenue were moving in opposite directions, and only one of them showed up in the headline.

By 2026 the arithmetic had inverted. Persistency is back at 80 percent, for the opposite reason: borrowers are locked into rates they cannot beat. In the second quarter of 2026, roughly 12 percent of the mortgages in Enact's portfolio carried rates at least 50 basis points above June's average of 6.5 percent. Close to nine in ten had no financial reason to refinance at all.

Gupta named the condition without claiming to control it: "Affordability and mortgage rate volatility continued to shape housing activity, and against this backdrop we continued to demonstrate the resiliency of our model".

The Machine That Returns Capital

Two months after the listing, in November 2021, Enact declared a special cash dividend of $200 million, or $1.23 a share. Gupta tied it to the balance sheet rather than the market: "Our strong balance sheet and robust cash flows position Enact to pursue a balanced capital allocation strategy that supports our policyholders while allowing us to invest in our business and return capital to shareholders."

The pattern held. In February 2026 the board authorised a new $500 million share repurchase programme on top of an existing $350 million programme with $30 million left in it, and declared a quarterly dividend of $0.21 a share. "The authorization reinforces our disciplined approach to capital management and our commitment to returning excess capital to shareholders", Gupta said.

Buried in that announcement is the tell of a controlled company. Enact entered an agreement with Genworth Holdings to repurchase Genworth's shares as part of the programme, in order to maintain Genworth's ownership interest. The buyback shrinks the float without loosening the parent's grip.

What The Book Shows Now

In the second quarter of 2026 Enact earned $175 million, or $1.25 a diluted share, on $245 million of net premiums. Return on equity was 13.0 percent, within a fifth of a point of where it stood in the quarter the company listed. Primary insurance in-force reached $274 billion. New insurance written was $15 billion, up 19 percent on the prior quarter. Book value per share was $39.06, more than double the IPO price. Capital sufficiency was 161 percent, about $1.9 billion above requirement, and full-year capital return guidance went up, to between $550 million and $600 million.

The loss ratio was 14 percent. Not 3, and not 39.

Gupta's summary was "Enact delivered another strong quarter supported by consistent execution, resilient credit performance and operating discipline". The line that carries further is the one about the book he is underwriting into: "we remain well positioned to create sustainable long-term value while helping more people responsibly achieve and sustain homeownership."

He signed the certification on that quarter's Form 10-Q on August 6, 2026, as he has signed every one since the listing. Five years in, the number under scrutiny is no longer the loss ratio. It is how long the parent stays.