Terry Ma's questions to MGIC Investment Corp (MTG) leadership • Q4 2024
Question
Terry Ma inquired about the drivers behind the simultaneous decrease in the new notice claim rate and the increase in new notice severity, and also asked for details on the lower operating expense guidance for 2025.
Answer
Chief Financial Officer Nathaniel Colson explained that higher severity is due to a mix shift towards newer, larger loans from the 2022-2024 vintages, while the underlying severity-to-exposure ratio target is unchanged. Regarding OpEx, he noted the reduction is from the cumulative effect of multi-year efficiency initiatives and that the 2025 guidance reflects the current run-rate, which he believes is not the lowest achievable level.