AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to 'a' (Excellent) from 'a-' (Excellent) for the operating subsidiaries of MGIC Investment Corporation. These subsidiaries include Mortgage Guaranty Insurance Corporation, MGIC Indemnity Corporation, and MGIC Assurance Corporation. The ratings outlooks have been revised to stable from positive, indicating a strong and consistent financial position.
The upgrades reflect the diminished significance of MGIC's legacy book of mortgage insurance on loans originated in 2008 and prior. The risk in force from this legacy book has significantly declined, reducing its potential to materially hinder operating performance. Furthermore, home price appreciation over recent years has contributed to a decline in mark-to-market loan-to-value ratios for these legacy loans.
AM Best's assessment highlights MGIC's balance sheet strength as strongest, supported by its risk-adjusted capitalization at the strongest level in both stressed and unstressed scenarios. The company's strong operating performance, favorable underwriting results, and effective use of reinsurance programs were also key factors in the upgrade. These elements collectively reinforce MGIC's financial resilience and disciplined risk management.
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