MGIC Investment Corp. (MGIC) is not going to be profitable in 2009, the top executive at the Milwaukee-based mortgage insurer declared, even though its fourth quarter and full year results were improved over the previous year.
Curt S. Culver, chairman and chief executive, said falling home values and the impact of the recession have caused a significant increase in delinquencies in the fourth quarter at MGIC. However, in spite of the difficult operating environment, he continued, MGIC has adequate resources to meet its claim obligations.
Total delinquencies, including bulk loans, was 12.37% at the end of the fourth quarter, up from 7.45% one-year prior. Remove the mostly subprime bulk loans from the equation and MGIC had a delinquency rate of 9.51%, up from 4.99% at the end of 2007. The company reported a net loss for the quarter of $273.3 million ($2.21 per share), an improvement over the fourth quarter 2007 loss of $1.47 billion ($18.17 per share).
For the full year, MGIC lost $518.9 million ($4.55 per share), compared with a loss of $1.67 billion ($20.54 per share) one-year prior. New insurance written during the fourth quarter was just $5.5 billion, a substantial decrease from the $24 billion written in the fourth quarter 2007.