Earnings Call Transcript - ACT Q1 2024

Operator, Operator

Good day and thank you for standing by. Welcome to Enact's First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. And after the speakers' presentation, there will be a question-and-answer session, and instructions will be given at that time. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Daniel Kohl, Vice President of Investor Relations. Please begin.

Daniel Kohl, VP of Investor Relations

Thank you, and good morning. Welcome to our First Quarter Earnings Call. Joining me today are Rohit Gupta, President and Chief Executive Officer and Dean Mitchell, Chief Financial Officer and Treasurer. Rohit will provide an overview of our business performance and progress against our strategy. Dean will then discuss the details of our quarterly results before turning the call back to Rohit for closing remarks. We will then take your questions. The earnings materials we issued after market closed yesterday contain our financial results for the quarter, along with a comprehensive set of financial and operational metrics. These are available on the Investor Relations section of our website. Today's call is being recorded and will include the use of forward-looking statements. These statements are based on current assumptions, estimates, expectations, and projections as of today's date. Additionally, they are subject to risks and uncertainties, which may cause actual results to materially differ, and we undertake no obligation to update or revise such statements as a result of new information. For a discussion of these risks and uncertainties, please review the cautionary language regarding forward-looking statements in today's press release as well as in our filings with the SEC, which will be available on our website. Please keep in mind the earnings materials and management's prepared remarks today include certain non-GAAP measures. Reconciliations of these measures to the most relevant GAAP metrics can be found in the press release, our earnings presentation, and our upcoming SEC filing on our website. With that, I'll turn the call over to Rohit.

Rohit Gupta, CEO

Thank you, Daniel. Good morning, everyone. Our first quarter results marked a strong start to 2024. Our insured portfolio continued to grow. We operated with expense discipline, credit performance remained robust, and we distributed more capital to shareholders through dividends and share repurchases than in any prior first quarter. This strong performance is a result of our commitment to our strategy, our strong position in the market, and our focus on driving long-term value creation for our shareholders. Our execution can be clearly seen in our strong financial performance. Net income for the quarter was $161 million or $1.01 per diluted share. Return on equity was a solid 14%, and insurance in-force increased 4% year-over-year to a record $264 billion, driven by a persistency of 85% and new insurance written of $11 billion. Our business continues to perform well as we navigate through a complex operating environment. The U.S. economy has been resilient with a strong labor market and healthy household balance sheets, while macro factors such as geopolitical conflicts, inflation, and higher interest rates continue to pose potential risks. Having said that, delinquency rates for prime mortgage borrowers are consistent with pre-pandemic levels, and our manufacturing quality remains solid. While higher borrowing costs have slowed origination, home prices continue to be supported by structurally lower housing inventory as well as strong demand. We continue to be optimistic about the pent-up demand in the first-time homebuyer population as more Americans reach the average first-time homebuyer age, and we believe that mortgage insurance will remain an important tool to help buyers attain this important milestone. I'll also note that higher rates continue to benefit persistency, which helps offset the effect of rates on origination volumes. The credit quality of our insured portfolio continues to be strong. At quarter end, the risk-weighted average FICO score of the portfolio was 744, and the risk-weighted average loan-to-value ratio was 93%, and layered risk was 1.3%. Pricing remained constructive through the quarter, and underwriting standards were rigorous. Our pricing engine allows us to deliver competitive pricing on a risk-adjusted basis, and we continue to underwrite and select risk prudently while managing to attractive returns. The delinquency rate in the quarter was 2%, down 9 basis points sequentially and consistent with our expectations. During the quarter, we released $54 million of reserves driven by favorable credit performance and our effective loss mitigation efforts. We remain well reserved for a range of scenarios. We continue to operate from a position of financial strength and flexibility. At quarter end, our PMIER's sufficiency was 163% or $1.9 billion of sufficiency, and approximately 90% of our risk in-force was subject to credit risk transfers. The strength of our capital position and cash flows allowed us to reinvest in the business and return capital to our shareholders aligned with our capital allocation priority. We've executed on strategic opportunities to extend our platform into compelling adjacencies while maintaining a sharp focus on our core MI business. Enact Re continues to perform well, and we continue to participate in GSE CRT transactions that came to market during the quarter. We remain pleased with the strong underwriting and attractive return profile of Enact Re. We returned $75 million of capital to shareholders in the first quarter. Given the increased liquidity in our stock, we increased share repurchases in the first quarter to $49 million and remain committed to returning capital to shareholders. This is also reflected in today's announcement that we are increasing our quarterly dividend 16% to $0.185 per share, as well as the Board's decision to approve a new share repurchase authorization of $250 million. We continue to expect to deliver capital returns in 2024, similar to 2023 levels. I'm also pleased to note that during the quarter, S&P upgraded EMICO's long-term financial strength and issuer credit rating to A- stable, and EHI's long-term issuer credit rating to BBB- stable. This is the fourth upgrade from S&P since our IPO and demonstrates the strength of our business and execution by our dedicated team. Additionally, both Moody's and Fitch upgraded us to a positive outlook reflecting our continued strong execution and positive financial results. All in, our strong quarter is a testament to the dedication and hard work of our team, and I thank them again for their effort. Looking ahead, we remain committed to serving our customers and their borrowers while maximizing value for our shareholders. With that, I will now turn the call over to Dean.

Dean Mitchell, CFO

Thanks, Rohit. Good morning, everyone. We again delivered strong results in the first quarter of 2024. GAAP net income for the first quarter was $161 million or $1.01 per diluted share compared to $1.08 per diluted share in the same period last year and $0.98 per diluted share in the fourth quarter of 2023. Return on equity was 14%. Adjusted operating income was $166 million or $1.04 per diluted share compared to $1.08 per diluted share in the same period last year and $0.98 per diluted share in the fourth quarter of 2023. Adjusted operating return on equity was 14%. Turning to revenue drivers. Primary insurance in-force increased in the first quarter to a new record of $264 billion, up $1 billion sequentially and up $11 billion or 4% year-over-year. New insurance written was $11 billion, up $1 billion sequentially and down $3 billion or 20% year-over-year. The year-over-year decline was primarily driven by a lower estimated MI market size and the lower estimated market share. Persistency was 85% in the first quarter, down 1 percentage point sequentially and flat year-over-year. Only 4% of the mortgages in our portfolio had rates at least 50 basis points above the prevailing market rate. In contrast, almost 80% of the mortgages in our portfolio had rates at or below 6%, well below prevailing rates. While rates remain elevated, we anticipate elevated persistency to continue, which will help offset lower production resulting from higher mortgage rates. Net premiums earned were $241 million, up $1 million sequentially and up $6 million or 2% year-over-year. The sequential increase in net premiums earned was primarily driven by the growth in attractive adjacencies, which consist primarily of Enact Re's GSE CRT participation. More broadly, insurance in-force growth was offset by higher ceded premiums resulting from the successful execution of our CRT program. The year-over-year increase was driven by insurance in-force growth and partially offset by higher ceded premiums and the lapse of older, higher-priced policies. Our base premium rate of 40.1 basis points was flat sequentially and down 0.4 basis points year-over-year. Remember that our base premium rate is impacted by several factors and tends to modestly fluctuate from quarter-to-quarter. We expect yields to stabilize around current levels in 2024. Our net earned premium rate was 36.3 basis points, down 0.1 basis points sequentially, primarily reflecting higher ceded premiums in the current quarter. Investment income in the first quarter was $57 million, up $1 million or 2% sequentially and up $12 million or 26% year-over-year. Higher interest rates have increased our investment portfolio yields, and as our portfolio rolls over, we anticipate further yield improvement. During the quarter, our new money investment yield exceeded 5%, contributing to an overall portfolio book yield of 3.7%. Our focus remains on high-quality assets and maintaining a resilient A-rated portfolio. While we typically hold investments until maturity, we selectively pursue income enhancement opportunities. During the quarter, we executed a strategy resulting in $7 million of pretax losses in exchange for higher future investment income. We'll continue to evaluate similar opportunities, but this does not change our view that our investment portfolio's unrealized loss position is materially noneconomic. Turning to credit. Losses in the quarter were $20 million compared to $24 million last quarter and negative $11 million in the first quarter of 2023. Our loss ratio for the quarter was 8% compared to 10% last quarter and negative 5% in the first quarter of 2023. Sequentially, our losses and loss ratio were driven by the current quarter delinquencies that reflect seasonal trends. Year-over-year, our losses and loss ratio in the current quarter were driven by the normal loss development of new large books and a lower reserve release. During the quarter, we continued to see favorable performance from early 2023 and prior delinquencies above our expectations, which resulted in a $54 million reserve release in the quarter compared to reserve releases of $53 million and $70 million in the fourth quarter of 2023 and first quarter of 2023, respectively. New delinquencies decreased sequentially to 11,400 from 11,700. Our new delinquency rate for the quarter was 1.2% compared to 1% in the first quarter of 2023 and flat sequentially. We continue to book new delinquencies at an approximate 10% claim rate, reflecting our prudent approach to reserving in the current macroeconomic environment. Total delinquencies in the first quarter decreased sequentially to 19,500 from 20,400. The primary delinquency rate decreased 9 basis points sequentially to 2%, consistent with our expectations and in line with pre-pandemic levels. Turning to expenses. Operating expenses for the first quarter of 2024 were $53 million, down $6 million or 10% sequentially and down $1 million or 2% year-over-year, reflecting our ongoing commitment to expense discipline. The expense ratio for the quarter was 22%, down 3 percentage points sequentially and down 1 percentage point year-over-year. As a reminder, our expenses are weighted towards the second half of the year, and thus, we will still expect expenses to be in the range of $220 million to $225 million over the course of 2024. Moving to capital. We continue to operate with a strong capital base and liquidity position reinforced by our robust PMIER's sufficiency and continued success in the execution of our diversified CRT program. Our PMIER's sufficiency was 163% or $1.9 billion above PMIER's requirements at the end of the first quarter. Additionally, at the end of the first quarter, 90% of our risk in-force was subject to credit risk transfers, and our third-party CRT program provides $1.7 billion of PMIER's capital credit. As previously announced, we closed new quota share and new excess of loss reinsurance transactions during the quarter. Additionally, we increased our affiliate quota share from 7.5% to 12.5% of a portion of our in-force business, along with 12.5% of 2024's new insurance written. These affiliated transactions will leverage Enact Re's existing capital and support new business opportunities, primarily consisting of GSE credit risk transfer. Turning to capital allocation. We continue to execute against our capital prioritization framework, which balances maintaining a strong balance sheet, investing in our business, and returning capital to shareholders. During the quarter, we paid out $26 million through our quarterly dividend, and we repurchased 1.8 million shares at a weighted average share price of $27.51 for a total of $49 million in repurchases through our share repurchase program. In April, we repurchased an additional 0.4 million shares at a weighted average share price of $30.07 for a total of $12 million repurchased. And as of April 30, 2024, there was approximately $24 million remaining on our current share repurchase authorization. Today, we announced a 16% increase to our quarterly dividend from $0.16 to $0.185 per share, and the Board approved a new share repurchase authorization of $250 million. Both actions reflect the continued strength of our financial position and confidence in our business. As with our prior share buyback programs, Genworth will participate proportionately. As a reminder, we still expect total 2024 capital return levels to be similar to the $300 million we delivered in 2023. As in the past, the final amount in the form of capital return to shareholders will ultimately depend on business performance, market conditions, and regulatory approvals. Overall, we're pleased with our strong start to 2024 and remain focused on prudently managing risk, maintaining a strong balance sheet, and driving solid returns for our shareholders. With that, I'll turn the call back to Rohit.

Rohit Gupta, CEO

Thanks, Dean. Looking ahead, I continue to be encouraged by the long-term dynamics of our market, and I'm confident in our ability to realize the opportunities ahead of us and our team's ability to execute against our strategy and deliver value. Our commitment to responsibly help more people become homeowners motivates everything we do and has never been stronger. Operator, we are now ready for Q&A.

Operator, Operator

Our first question is from Doug Harter with UBS. Your line is open. Please go ahead.

Doug Harter, Analyst

Thanks. First, I was just hoping you could kind of give us an update as to how you see the total market for NIW progressing as the year unfolds, kind of what impact from the increased rates that you're seeing on either kind of the underlying quality of applications or the amount of applications?

Rohit Gupta, CEO

Good morning, Doug, thank you for the question. Given the volatility we have seen in rates up to this point in the year, it is difficult to forecast originations with a narrow range. I provided our view last quarter, where we basically said that we expect the MI market to be generally in line with the 2023 market size. Just to add some color to that, I would say going into the spring selling season, we are seeing overall consumer demand, including first-time homebuyer demand, continuing to be strong. The consumers who are coming to the market at this point are used to 6% to 7% mortgage rates. The challenge we are facing in the market is a lack of inventory and some of the volatility we have seen in the last month or so in rates. So our view continues to be that MI is a very helpful product for consumers, especially first-time homebuyers to get into homes. As we see that origination volume come through, MI products will continue to gain very good penetration in the market. However, at this point in time, our expectation is that the MI market size will be generally in line with 2023. Just to give you a historical data point, that level of market size is comparable to the 2018 market size within like $5 billion to $6 billion of that. Also, our persistency continues to provide a natural hedge in our business, as higher rates are a tailwind for the retention of our existing portfolio. Doug, regarding your question on manufacturing and credit quality, we continue to see, as I mentioned in my prepared remarks, that manufacturing quality and credit quality remain strong. From a volume perspective, we continue to have both non-delegated and delegated volumes, either through direct underwriting or through our audit while we continue to monitor that. As I mentioned in our prepared remarks, we feel good about that.

Doug Harter, Analyst

I guess just on that, what are you seeing around affordability on new purchases, how are consumers coping with the higher rates from an affordability perspective?

Rohit Gupta, CEO

Yes Doug, very good question. So as I mentioned before in my remarks, I think at this point, consumers who are coming to the market are prepared for that 6% to 7% 30-year fixed mortgage rate. We are seeing those consumers go through the application process and actually get qualified. Given that we have very granular risk-based pricing, we can price those loans aligned with our view of risk and returns, both in base case and stress case. From a consumer qualification perspective, while we have seen certain metrics move up similar to what we saw in the previous purchase market, loan-to-value ratios are back to 2018 levels. If you think about debt-to-income and FICO scores, they are very indicative of a purchase market. We are seeing those markets where we have seen traditionally. However, we continue to feel good about the consumers we are putting on our books and continue to feel good about the attractive returns we can generate from those policies.

Operator, Operator

And our next question is going to come from the line of Mihir Bhatia with Bank of America. Your line is open. Please go ahead.

Caroline, Analyst

This is Caroline on for Mihir. Thanks for taking my question. Can you discuss interest rate buydowns? Is that product very prevalent in the market? And can you provide any comments on how you're underwriting that one, if any different than other mortgages?

Rohit Gupta, CEO

Yes, good morning, Caroline, thank you for the question. As we think about interest rate buydowns, we continue to see them in the market as a strong product for consumers right now. We talked about this on our earnings call a few quarters ago. The trend has been very similar; we don't publish that as an explicit metric in our financials, but we continue to monitor it internally. I would say there are two flavors of interest rate buydowns. One flavor is temporary interest rate buydowns where the interest rate on the mortgage is brought down for 1 to 2 years by the lender, and there are some limitations on how much money the lender can use to do that. We see that as a prudent product because the consumer is qualified at the full rate, not at the teaser rate of the mortgage. So it's a well-qualified consumer. The second flavor is builder commitments, where builder originators specifically buydown the note rate for the life of the mortgage, and we see that also coming through on a consistent basis. In that case, the consumer does not have any kind of interest rate change in their mortgage. As a result, the consumer is well qualified for the mortgage. Our usage of those products is coming from different channels and different originators, but we continue to see the usage being consistent with what we have seen in the past.

Caroline, Analyst

Awesome. That's super helpful. And then also, can you talk about embedded equity in the delinquent inventory and any stats you can share on that?

Rohit Gupta, CEO

Yes, Caroline. In this quarter, in our earnings presentation, we actually had that back on Page 13 of the presentation. You can see that for delinquent policies, which are around 2% of our portfolio, 94% of those policies actually had mark-to-market equity of greater than 10%. That's based on home prices at the end of 2023 for policies at the end of the first quarter. Additionally, 81% of our delinquent policies had mark-to-market equity of more than 20% using the same methodology.

Operator, Operator

And our next question is going to come from the line of Bose George with KBW. Your line is open. Please go ahead.

Bose George, Analyst

Actually, I wanted to ask your default to claim rate at 10% remains a couple of points above the peers have reported. I know it all kind of nets out through the recoveries, but what would you need to see to take that down probably closer to the 7% to 8% that some of the others are using?

Dean Mitchell, CFO

Yes, Bose, thanks for the question. Just as a reminder, maybe to set the table for this, our reserves and our roll rates that you just referenced on new delinquencies are always our best estimate of ultimate claims. As we determine the best estimate, we consider various economic outcomes to ensure that we're appropriately reserved, even if economic pressures emerge. Regarding the 10% claim rate on new delinquencies, we set that not in line with anything we had seen from a performance perspective, which remains very strong. What we really did was take into account that there was some heightened macroeconomic uncertainty. We believe it was prudent to contemplate that in the establishment of that 10% roll rate. Over time, to your point, we've seen economic resiliency. As a result, we've seen elevated cures on prior accident year delinquencies. That heightened view of uncertainty hasn't materialized. I believe if we saw the possibility or probability of economic pressures decrease materially on a go-forward basis and/or if we gave more reliance on the more recent performance and a little bit less reliance on that judgment that's based on macroeconomic uncertainty, we should take a hard look at the appropriateness of the current 10% claim rate.

Bose George, Analyst

Okay. Great. That's helpful, thanks. And then just switching over to capital return. Dean, you noted the $300 million will be similar to last year. Is the mix between buybacks and dividends also going to be the same, just given the strong start on buybacks? Just curious if there's any change there?

Dean Mitchell, CFO

Yes, Bose, that's a great question. As we've discussed in the past, we really have three ways to return capital to shareholders: ordinary dividends, share repurchases, and special dividends. We think about those in a waterfall approach. At the top of the waterfall, it's quarterly dividends. We size those to be both competitive and durable, even under stress. So the 16% increase in the quarterly dividend this quarter reflects our confidence in our ability to maintain that $0.185 dividend per share through time and economic cycles. It's at the top of the waterfall because it increases the certainty of capital return to shareholders. Share repurchases, in contrast, are a little more opportunistic. They're based on the prevailing market conditions, particularly concerning our share price and our liquidity, given our limited float. Special dividends are more of a blunt instrument that allows us to return planned capital to shareholders in excess of quarterly dividends and share repurchases, typically at the end of the year. If you look at our first quarter results, they show execution against that expectation, where we repurchased almost $50 million in the quarter. For comparison purposes, we repurchased about $87 million across all of 2023. You can see that we rely more heavily on share repurchases. Going forward, the pace of share repurchases will largely be dictated by market opportunities. If we see accretive market opportunities, I anticipate we'll continue to execute the share repurchase program at an elevated pace. If that doesn't occur, we'll rely more heavily on special dividends at year-end to distribute our planned capital for the full year.

Operator, Operator

And our next question is going to come from the line of Rick Shane with JPMorgan. Your line is open. Please go ahead.

Rick Shane, Analyst

And Bose really touched upon what I want to focus on too, which is obviously the cadence of capital return in the first quarter, given the strength of the buyback plus increasing the dividend starting in the second suggests that you are above the run rate of capital returns roughly comparable to 2023 levels. I think the clear takeaway is that as you approach the end of the year, the special dividend is sort of the flex to get you there depending on opportunities on buybacks and regular dividend. I am curious, given the strength of earnings and what I think everybody is going to take away as a pretty favorable outlook, what it would take for you to actually potentially raise the total capital return, whether it's 5% or 10%. Is that something that you could envision as the year unfolds if the trajectory remains strong?

Dean Mitchell, CFO

Yes, so Rick, appreciate the questions. I want to start off with the guidance as it relates to capital return for the full year 2024, which remains at $300 million. What I think Bose's question got to is the way in which we're returning that $300 million and potentially even the timing of how that $300 million gets returned to shareholders could increase again if we see opportunistic market opportunities to flex our share repurchase program larger, as we did in Q1. This is much more to do with timing and means than quantum or amount of total capital return for full year 2024. That said, what would cause us to revisit the $300 million? Business performance is a key driver. If we see business performance above our expectations, and if you see continued improvement in the macroeconomic environment and/or if we see a regulatory environment that is more accommodative. Those are all things we consider in establishing appropriate capital return heading into any year and throughout the year as we progress.

Rohit Gupta, CEO

Good morning, Rick. That definitely is an input. As Dean said, that would be captured in business performance. Our guidance right now for MI market size for 2024 is to be similar to that of 2023. Overall, in 2023, we wrote a good-sized book and printed solid business results in terms of income expression for the entire year. In 2024, we look at very similar metrics: how much new business we are writing in our core MI business and how much in our Enact Re business. Also, how is the core book performing in terms of loss ratios and income? All these factors contribute to whether we change our capital guidance. We have done that in prior years when our view has gotten stronger during the year, so we'll continue to keep the market updated.

Operator, Operator

And our next question comes from the line of Soham Bhonsle with BTIG. Your line is open. Please go ahead.

Soham Bhonsle, Analyst

So I guess first question along the lines of capital return. I was interested in sort of the decision to raise the buyback or increase the buyback to $250 million and the 16% increase in the dividend, which is great. But Rohit, could you maybe provide some color on just the framework you and the Board used as you were sort of setting that range? I'm particularly curious about the macro portfolio assumptions that you considered to just get to that $250 million. Any insight would be great. Thanks.

Rohit Gupta, CEO

Good morning, Soham. Thank you for the question. Both on the increased share buyback as well as increased dividend, I start by noting the performance of our portfolio and our business, combined with our view of the strength of our balance sheet. As I said in my prepared remarks, we continue to create a stronger balance sheet with recognition from the external market in terms of rating agency upgrades in 2023 and early 2024. Additionally, we saw two positive outlook changes recently, which are proof points that the Board and I feel comfortable about the strength of our balance sheet and business results. That contributes to our confidence in capital return. Regarding dividends, we consider various factors, including earnings, competitive environment, the resiliency of that dividend, and maintaining confidence in pursuing a dividend increase. This drove the decision to increase the dividend by 16% to $0.185 per share. For share buybacks, we also consider liquidity in the market. Our liquidity based on average daily trading volume has increased by 150% from January 2023 to April 2024. If share prices are trading at the right level and given our view of intrinsic value, we want to use that vehicle as long as the liquidity is good. The Board saw this as constructive and worked with our advisors to put that view together, giving us confidence to start the next share buyback authorization at a higher level. However, we will continuously evaluate that metric. If we see that we are negatively impacting liquidity, we may change the approach. The third vehicle for capital return, the special dividend, remains available to us. We've exercised that flexibility prudently over the last 3 years and intend to continue doing so moving forward.

Soham Bhonsle, Analyst

Got it. Okay. Thank you for the color. On the embedded equity disclosure this quarter, it is remarkable that 70% of the portfolio still has 20% or more equity. Even your delinquencies are sitting on more than 80% at 20%. Assuming home prices remain stable and they do not go up or down in a scenario where the borrower defaults today, what do you think is a realistic scenario for what you could expect from the home for given that you still have reinsurance in place? It would be helpful if you could characterize for investors the range of outcomes in a potential default scenario, provided that embedded equity remains stable going forward.

Rohit Gupta, CEO

Yes, Soham, that's a very good question. From an embedded equity perspective, it presents a tailwind for our portfolio. The significant increases in 2020 and 2021 are the basis for the numbers you mentioned, which are not normal in our market. The home price appreciation we're seeing now is more in line with historical levels, and we're likely to see that normalize over time. That said, home price appreciation aids us in terms of frequency and severity when it comes to losses. It decreases frequency because consumers who have enough equity can potentially sell their home before going delinquent. If they enter delinquency, having the ability to sell without being foreclosed on can lower severity. Hence, these factors provide mitigations in our market. However, because consumers who stay delinquent eventually claim do not have sufficient equity, their claims then approach 100% severity. It is challenging to quantify this, but we've seen improved cure rates over the last eight quarters, which aligns with the factors you outlined.

Soham Bhonsle, Analyst

Got it. If I could just squeeze in one more question. It looks like your NIW declined a little more than peers this quarter. Could you elaborate on what you saw in the market? Are you taking a different view on certain cohorts? Any notable differences would be helpful.

Rohit Gupta, CEO

Soham, thank you for the question. Are you referring to year-over-year decline or quarter-over-quarter?

Soham Bhonsle, Analyst

Yes, year-over-year.

Rohit Gupta, CEO

Soham, regarding our market participation, it's difficult to assess where we landed overall without final market share numbers. Our NIW of $10.5 billion reflects a pricing and mix we are pleased with. I pointed out earlier that we saw constructive pricing in the market and took several pricing actions to ensure we were selecting the right risk while achieving stable returns. From a year-over-year perspective, our market share in Q1 2023 was slightly elevated, likely due to other players retreating based on risk appetite. Our risk appetite has been quite stable, and we estimate that our market participation is still within our expected range of 16% to 18%. The figures from Q4 '23 and Q1 '24 indicate that our participation has generally remained stable. We prioritize driving the right price for the right risk and managing our layered risk concentration, and believe we are doing well on that front.

Operator, Operator

I would now like to turn the conference back to Rohit Gupta for any further remarks.

Rohit Gupta, CEO

Thank you. We appreciate everybody's interest in Enact, and I look forward to seeing you in New York at the BTIG Housing Ecosystem Conference next week. Thank you.

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.