Claims Weigh Down Results Of Some Mortgage Insurers.

New York -- Triad Guaranty Inc., the smallest of the nation's seven private mortgage insurance firms, reported that its second quarter earnings decreased 8% from the prior year. Meanwhile three of its larger publicly traded competitors had significant gains in net income.

At Winston-Salem, N.C.-based Triad, second quarter net income totaled $13.2 million or $0.89 per share, compared with $14.4 million or $0.98 per share for the same period in 2004.

Darryl W. Thompson, president and chief executive, said, "We are disappointed with the decline in our second quarter earnings. This decline is attributable, in part, to an unexpected increase in incurred losses resulting from an abnormal increase in large claims paid and changes in claim processing procedures by one of our larger servicers. It is also attributable to reserve strengthening, primarily to reflect higher severity trends. This dampened what otherwise would have been a strong quarter for Triad.

"We were pleased, however, with the 20% increase in both earned premiums and revenue in the second quarter of 2005 when compared to the same quarter a year ago. We have been able to grow our insurance in force and earned premiums with only a 4% increase in expenses, resulting in a drop in our expense ratio compared to the second quarter of 2004."

The change in procedures by a servicer accelerated the number of claims perfected during the quarter and reduced the time during which Triad could mitigate losses.

Meanwhile at MGIC Investment Corp., Milwaukee, net income for the second quarter was $174.4 million or $1.87 per share, compared with the $154.5 million or $1.56 per share for the same quarter a year ago.

In its earnings release, Curt S. Culver, president and chief executive, said he remained pleased with delinquency inventory and joint-venture performance, but that attractive interest rates and strong home-price appreciation continue to negatively impact insurance in force and associated revenues.