Low Credit Losses Help Offset Persistency Woes at MGIC.

Milwaukee -- MGIC Investment Corp. here reported an increase in its third-quarter net earnings of 6.2% and an increase in year-to-date earnings of 19.1%.

Curt Culver, president and chief executive of MGIC, said he was pleased with the improvement in credit losses at the company as well as the contribution its joint ventures have made to earnings. But insurance-in-force and associated revenue continue to be affected by low mortgage interest rates and strong home price appreciation.

MGIC reported net income of $142.4 million, or $1.55 per share, for the three months ended Sept. 30, 2005, up from $134.1 million, or $1.36 per share, for the same period one year earlier. However, revenue fell nearly 4% to $375.7 million for the quarter, which MGIC said was the result of a 5.7% decline in net premiums earned to $305.8 million. There was a decline in persistency between the second quarter of this year, when it was 60.9%, and the most recent quarter at 60.2%. At Sept. 30, 2004, persistency was 59.4%.

MGIC noted its year-end high watermark for persistency was at Dec. 31, 1990, when it was 87.4%. The low point was 44.9% on Sept. 30, 2003. A note in the release said because of the ease to refinance "even in an interest rate environment favorable to persistency improvement, the company does not expect persistency will approach its Dec. 31, 1990 level."