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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from         to
Commission File Number 001-40399
https://cdn.kscope.io/b983ad15d0c1591934d0b24e594fc1dd-act-20210930_g1.gif
Enact Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware46-1579166
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
8325 Six Forks Road
Raleigh, North Carolina 27615
(919) 846-4100
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareACTThe Nasdaq Stock Market
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNo
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YesNo
As of October 27, 2021, there were 162,840,309 shares of Common Stock, par value $0.01 per share, outstanding.



TABLE OF CONTENTS
Page
1


Part I. Financial Information
Item 1. Financial Statements
ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
2021
December 31,
2020
(Amounts in thousands, except par value amount)(Unaudited) 
Assets  
Investments:
Fixed maturity securities available-for-sale, at fair value (amortized cost of $5,205,916 and no allowance for credit losses as of September 30, 2021)
$5,376,067 $5,046,596 
Short-term investments, at fair value12,500  
Total investments5,388,567 5,046,596 
Cash and cash equivalents451,582 452,794 
Accrued investment income31,372 29,210 
Deferred acquisition costs27,788 28,872 
Premiums receivable (allowance for credit losses of $948 as of September 30, 2021)
43,425 46,464 
Other assets48,572 48,774 
Total assets$5,991,306 $5,652,710 
Liabilities and equity
Liabilities:
Loss reserves$648,365 $555,679 
Unearned premiums254,806 306,945 
Other liabilities129,464 133,302 
Long-term borrowings739,838 738,162 
Deferred tax liability17,452 36,811 
Total liabilities1,789,925 1,770,899 
Equity:
Common stock ($0.01 par value, 600,000 shares authorized, 162,840 shares issued and outstanding)
1,628 1,628 
Additional paid-in capital2,369,822 2,368,699 
Accumulated other comprehensive income133,955 208,378 
Retained earnings1,695,976 1,303,106 
Total equity4,201,381 3,881,811 
Total liabilities and equity$5,991,306 $5,652,710 
See Notes to Condensed Consolidated Financial Statements
2


ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 Three months ended
September 30,
Nine months ended
September 30,
(Amounts in thousands, except per share amounts)2021202020212020
Revenues:
Premiums$243,063 $251,423 $738,085 $720,474 
Net investment income35,995 33,197 105,943 97,890 
Net investment gains (losses)580 (1,609)(2,129)(1,953)
Other income671 1,325 3,114 4,534 
Total revenues280,309 284,336 845,013 820,945 
Losses and expenses:
Losses incurred34,124 44,475 119,501 290,785 
Acquisition and operating expenses, net of deferrals55,151 54,994 175,823 155,473 
Amortization of deferred acquisition costs and intangibles3,669 3,873 11,104 11,453 
Interest expense12,756 5,512 38,238 5,512 
Total losses and expenses105,700 108,854 344,666 463,223 
Income before income taxes
174,609 175,482 500,347 357,722 
Provision for income taxes37,401 37,467 107,196 78,482 
Net income$137,208 $138,015 $393,151 $279,240 
Net income per common share:
Basic$0.84 $0.85 $2.41 $1.71 
Diluted$0.84 $0.85 $2.41 $1.71 
Weighted average common shares outstanding:
Basic162,840 162,840 162,840 162,840 
Diluted162,852 162,840 162,844 162,840 
See Notes to Condensed Consolidated Financial Statements
3


ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 Three months ended
September 30,
Nine months ended
September 30,
(Amounts in thousands)2021202020212020
Net income$137,208 $138,015 $393,151 $279,240 
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities without an allowance for credit losses
(25,899) (74,704) 
Net unrealized gains (losses) on securities with an allowance for credit losses
    
Net unrealized gains (losses) on securities not other-than-temporarily impaired 30,799  90,316 
Total comprehensive income$111,309 $168,814 $318,447 $369,556 
See Notes to Condensed Consolidated Financial Statements
4


ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Three months ended September 30, 2021
(Amounts in thousands)
Common
stock
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
equity
Balances as of June 30, 2021$1,628 $2,369,601 $159,854 $1,558,768 $4,089,851 
Cumulative effect of change in accounting, net of taxes— — — — — 
Comprehensive income (loss):
Net income— — — 137,208 137,208 
Other comprehensive loss, net of taxes— — (25,899)— (25,899)
Total comprehensive income— — — — 111,309 
Stock-based compensation expense and exercises and other— 221 — — 221 
Capital contributions from Genworth Financial, Inc.— — — — — 
Balance as of September 30,
2021
$1,628 $2,369,822 $133,955 $1,695,976 $4,201,381 
Three months ended September 30, 2020
(Amounts in thousands)
Common
stock
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
equity
Balances as of June 30, 2020$1,628 $2,366,099 $152,948 $1,511,263 $4,031,938 
Cumulative effect of change in accounting, net of taxes— — — — — 
Comprehensive income (loss):
Net income— — — 138,015 138,015 
Other comprehensive loss, net of taxes— — 30,799 — 30,799 
Total comprehensive income— — — — 168,814 
Dividends to Genworth— — — (435,654)(435,654)
Capital contributions from Genworth Financial, Inc.— 1,532 — — 1,532 
Balance as of September 30,
2020
$1,628 $2,367,631 $183,747 $1,213,624 $3,766,630 
5


Nine months ended September 30, 2021
(Amounts in thousands)
Common
stock
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
equity
Balances as of December 31, 2020$1,628 $2,368,699 $208,378 $1,303,106 $3,881,811 
Cumulative effect of change in accounting, net of taxes— — 281 (281) 
Comprehensive income (loss):
Net income— — — 393,151 393,151 
Other comprehensive loss, net of taxes— — (74,704)— (74,704)
Total comprehensive income— — — — 318,447 
Stock-based compensation expense and exercises and other— 221 — — 221 
Capital contributions from Genworth Financial, Inc.— 902 — — 902 
Balance as of September 30,
2021
$1,628 $2,369,822 $133,955 $1,695,976 $4,201,381 
Nine months ended September 30, 2020
Common
stock
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
equity
Balances as of December 31, 2019$1,628 $2,361,978 $93,431 $1,370,038 $3,827,075 
Comprehensive income (loss):
Net income— — — 279,240 279,240 
Other comprehensive loss, net of taxes— — 90,316 — 90,316 
Total comprehensive income— — — — 369,556 
Dividends to Genworth— — — (435,654)(435,654)
Capital contributions from Genworth Financial, Inc.— 5,653 — — 5,653 
Balances as of September 30, 2020$1,628 $2,367,631 $183,747 $1,213,624 $3,766,630 
See Notes to Condensed Consolidated Financial Statements
6


ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine months ended
September 30,
(Amounts in thousands)20212020
Cash flows from operating activities:  
Net income$393,151 $279,240 
Adjustments to reconcile net income to net cash provided by operating activities:
Net (gains) losses on investments2,129 1,953 
Amortization of fixed maturity securities discounts and premiums(6,884)(2,551)
Amortization of deferred acquisition costs and intangibles11,104 11,453 
Acquisition costs deferred(5,525)(9,291)
Deferred income taxes824 12,593 
Stock-based compensation expense221  
Other908 5,653 
Change in certain assets and liabilities:
Accrued investment income(2,162)(4,806)
Premiums receivable3,039 3,244 
Other assets(4,666)5,173 
Loss reserves92,686 239,682 
Unearned premiums(52,139)(55,089)
Other liabilities(21,604)73,292 
Net cash provided by operating activities411,082 560,546 
Cash flows from investing activities:
Purchases of fixed maturity securities available-for-sale (1,192,098)(1,494,972)
Purchases of short-term investments(12,500) 
Proceeds from sales of fixed maturity securities available-for-sale292,697 233,642 
Proceeds from maturities of fixed maturity securities 499,607 369,361 
Net cash used in investing activities(412,294)(891,969)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt 738,753 
Dividends paid (435,654)
Net cash provided by (used in) financing activities 303,099 
Net decrease in cash and cash equivalents(1,212)(28,324)
Cash and cash equivalents at beginning of period452,794 585,058 
Cash and cash equivalents at end of period$451,582 $556,734 
Supplementary disclosure of cash flow information:
Non-cash contributions of capital from Genworth Financial, Inc.$902 $5,653 
See Notes to Condensed Consolidated Financial Statements                            
7

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
(1)Nature of Business, Organization Structure and Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include on a consolidated basis the accounts of Enact Holdings, Inc. (“EHI,” together with its subsidiaries, the “Company,” “we,” “us” or “our”) (formerly known as Genworth Mortgage Holdings, Inc.). EHI is a subsidiary of Genworth Financial, Inc. (“Genworth” or “Parent”) and has been since EHI’s incorporation in Delaware in 2012. On May 3, 2021, EHI amended its certificate of incorporation to change its name from Genworth Mortgage Holdings, Inc. This amendment also authorized EHI to issue 600,000,000 shares of common stock, each having a par value of $0.01 per share. Concurrently, we entered into a share exchange agreement with Genworth Holdings, Inc. (“Genworth Holdings”), pursuant to which Genworth Holdings exchanged its 100 shares of common stock, representing all of the previously issued and outstanding capital stock, for 162,840,000 newly-issued shares of common stock, par value $0.01, of EHI. All of the share and per share information presented in the condensed consolidated financial statements and notes to the condensed consolidated financial statements have been adjusted to reflect the share exchange on a retroactive basis for all periods and as of all dates presented.
On September 15, 2021, we priced our initial public offering (“IPO”) of common stock, which resulted in the issuance and sale of 13,310,400 shares of common stock at the IPO price of $19.00 per common share. All shares were offered by the selling stockholder, our parent company, Genworth Holdings. In addition to the shares sold in the IPO, 14,655,600 common shares were sold in a concurrent private sale (“Private Sale”) at a price per share of $17.86, which is equal to the IPO price less the underwriting discount share. Genworth Holdings also granted the underwriters a 30-day option to purchase up to an additional 1,996,560 common shares (“Over-Allotment Option”) at the IPO price less the underwriting discount. On September 16, 2021, the underwriters exercised their option to purchase all 1,996,560 common shares permitted under the terms of the underwriting agreement. The IPO, Private Sale and Over-Allotment Option (collectively the “Offering”) closed on September 20, 2021, and Genworth Holdings retained all net proceeds from the Offering. The gross proceeds of the Offering, before payment of underwriter fees and other expenses, were approximately $553 million. Costs directly related to the Offering, including underwriting fees and other expenses, were approximately $24 million.
On November 29, 2019, Genworth completed a holding company reorganization whereby Genworth contributed 100% of the issued and outstanding voting securities of the Company to Genworth Holdings. Post-contribution, we were a direct, wholly owned subsidiary of Genworth Holdings, and Genworth Holdings was a direct, wholly owned subsidiary of Genworth. After our IPO, Genworth Holdings is still a wholly owned subsidiary of Genworth but we are no longer a wholly owned subsidiary of Genworth Holdings. We are engaged in the business of writing and assuming residential mortgage guaranty insurance. The insurance protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a lien on residential real estate.
We offer private mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans (“primary mortgage insurance”). Our primary mortgage insurance enables borrowers to buy homes with a down payment of less than 20% of the home’s value. Primary mortgage insurance also facilitates the sale of these low down payment mortgage loans in the secondary mortgage market, most of which are sold to government sponsored enterprises. We also selectively enter into insurance transactions with lenders and investors, under which we insure a portfolio of loans at or after origination.
We operate our business through our primary insurance subsidiary, Genworth Mortgage Insurance Corporation (“GMICO”), with operations in all 50 states and the District of Columbia. GMICO is an approved insurer by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home
8

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
Loan Mortgage Corporation (“Freddie Mac”). Fannie Mae and Freddie Mac are government-sponsored enterprises and we refer to them collectively as the “GSEs.”
We also perform fee-based contract underwriting services for mortgage lenders. The provision of underwriting services by mortgage insurers eliminates the duplicative lender and mortgage insurer underwriting activities and expedites the approval process.
We operate our business in a single segment, which is how our chief operating decision maker (who is our chief executive officer) reviews our financial performance and allocates resources. Our segment includes a run-off insurance block with reference properties in Mexico (“run-off business”), which is immaterial to our condensed consolidated financial statements. In April 2021, we entered into an agreement to purchase our Parent’s minority ownership interest in its mortgage guarantee business in India for a cash purchase price that is not material to us. The closing of the transaction is subject to customary closing conditions, including receipt of any required regulatory approvals.
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Preparing financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. These unaudited condensed consolidated financial statements include all adjustments (including normal recurring adjustments) considered necessary by management to present a fair statement of the financial position, results of operations and cash flows for the periods presented. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Potential impacts, risks and uncertainties of the coronavirus pandemic (“COVID-19”) may include declines in investment valuations and impairments, deferred acquisition cost (“DAC”) or intangible assets impairments or the acceleration of amortization, deferred tax asset recoverability and increases to loss reserves, among other matters. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes for the years ended December 31, 2020 and 2019.
On July 20, 2020, Genworth reached a settlement agreement with AXA S.A. (“AXA”) regarding a dispute over payment protection insurance mis-selling claims sold by Genworth’s former lifestyle protection insurance business that was acquired by AXA in 2015. As part of the settlement agreement, Genworth issued a secured promissory note agreeing to pay AXA in two installments in 2022. Under the terms of the secured promissory note, as amended, Genworth pledged as collateral to AXA a 19.9% security interest in our outstanding common stock. On March 3, 2021, Genworth repaid the first installment payment originally due to AXA in June 2022 and a portion of the second installment payment due to AXA in September 2022 from cash proceeds received from the sale of Genworth Mortgage Insurance Australia Limited. On September 21, 2021, Genworth used a portion of the net proceeds from our IPO to repay the remaining outstanding balance of the secured promissory note of approximately £215 million ($296 million), excluding future claims still being processed. Following the full repayment of the secured promissory note, AXA released its 19.9% security interest in our outstanding common shares.
(2)Accounting Changes
Accounting Pronouncements Recently Adopted
On January 1, 2021, we adopted new accounting guidance related to simplifying the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. We adopted this new accounting guidance using the
9

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
retrospective method or modified retrospective method for certain changes and prospective method for all other changes, which did not have a significant impact on our consolidated financial statements and disclosures.
On January 1, 2021, we early adopted new accounting guidance related to accounting for credit losses on financial instruments. The guidance requires entities to recognize an allowance equal to its estimate of lifetime expected credit losses and applies to most debt instruments not measured at fair value.
The new guidance retains most of the existing impairment guidance for available-for-sale fixed maturity securities but amends the presentation of credit losses to be presented as an allowance as opposed to a write-down and permits the reversal of credit losses when reassessing changes in the credit losses each reporting period. Available-for-sale fixed maturity securities in an unrealized loss position are evaluated to determine whether the decline in fair value is related to credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency/agencies and adverse conditions specifically related to the security, among other factors. If a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Estimating the cash flows expected to be collected is a quantitative and qualitative process that incorporates information received from third-party sources along with internal assumptions and judgments. When developing the estimate of cash flows expected to be collected, we utilize an analytical model that provides for various loss scenarios and consider the industry sector, current levels of subordination, geographic location and other relevant characteristics of the security or underlying assets, as well as reasonable and supportable forecasts. Losses are written off against the allowance when deemed uncollectible or when we intend to sell or expect we will be required to sell a security prior to recovering our amortized cost. We exclude accrued interest related to available-for-sale fixed maturity securities from the estimate of allowance for credit losses. Accrued interest is included in accrued investment income in our condensed consolidated balance sheet. We do not measure an allowance for credit losses related to accrued interest as uncollectible accrued interest related to our available-for-sale fixed maturity securities is written off after 90 days and once collectability is determined to be uncertain and not probable. Amounts written off related to accrued interest are recorded as a credit loss expense included in net investment gains (losses). We adopted the guidance related to our available-for-sale fixed maturity securities using the modified retrospective method, which did not have a significant impact on our consolidated financial statements.
The new guidance further requires that expected credit losses on premiums receivable are measured in accordance with the credit loss requirements for financial instruments measured at amortized cost. Due to the short-term nature of our premiums receivable, we consider lifetime expected credit losses on premiums receivable to be consistent with our current allowance and as a result the new accounting guidance did not have an impact on premiums receivable upon adoption.
The new guidance also requires the recognition of an allowance for expected credit losses as a liability in our consolidated balance sheet for off-balance sheet credit exposures, including private placement investments. We adopted the guidance related to our off-balance sheet credit exposures using the modified retrospective method, which did not have an impact on our consolidated financial statements.

10

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
(3)Investments
Net Investment Income
Sources of net investment income were as follows for the periods indicated:
Three months ended
September 30,
Nine months ended
September 30,
(Amounts in thousands)
2021202020212020
Fixed maturity securities available-for-sale$37,055 $34,512 $110,007 $99,621 
Cash, cash equivalents and short-term investments13 86 65 2,135 
Gross investment income before expenses and fees37,068 34,598 110,072 101,756 
Investment expenses and fees(1,073)(1,401)(4,129)(3,866)
Net investment income$35,995 $33,197 $105,943 $97,890 
Net Investment Gains (Losses)
The following table sets forth net investment gains (losses) for the periods indicated:
Three months ended
September 30,
Nine months ended
September 30,
(Amounts in thousands)
2021202020212020
Fixed maturity securities available-for-sale:  
Gross realized gains$839 $158 $1,423 $906 
Gross realized (losses)(128)(37)(1,261)(1,129)
Net realized gains (losses)711 121 162 (223)
Impairments:
Total other-than-temporary impairments (1,730) (1,730)
Portion of other-than-temporary impairments included in other comprehensive income (loss)    
Net other-than-temporary impairments (1,730) (1,730)
Net change in allowance for credit losses on fixed maturity securities available-for-sale(131) (2,291) 
Net investment gains (losses)$580 $(1,609)$(2,129)$(1,953)



11

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
The following table represents the allowance for credit losses aggregated by security type for fixed maturity available-for-sale securities as of and for the three months ended September 30, 2021:
(Amounts in thousands)Beginning balanceCumulative effect of change in accountingIncrease from securities without allowance in previous periodsSecurities soldEnding balance
Fixed maturity securities:
Non-U.S. corporate$ $ $ $ $ 
Total fixed maturity securities available-for-sale $ $ $ $ $ 
The following table represents the allowance for credit losses aggregated by security type for fixed maturity available-for-sale securities as of and for the nine months ended September 30, 2021:
(Amounts in thousands)Beginning balanceCumulative effect of change in accountingIncrease from securities without allowance in previous periodsSecurities soldEnding balance
Fixed maturity securities:
Non-U.S. corporate$ $357 $2,157 $(2,514)$ 
Total fixed maturity securities available-for-sale $ $357 $2,157 $(2,514)$ 
Unrealized Investment Gains (Losses)
Net unrealized gains and losses on available-for-sale securities reflected as a separate component of accumulated other comprehensive income (“OCI”) were as follows as of the dates indicated:
(Amounts in thousands)
September 30, 2021December 31, 2020
Net unrealized gains (losses) on fixed maturity securities without an allowance for credit losses
$170,151 $ 
Net unrealized gains (losses) on fixed maturity securities with an allowance for credit losses
  
Net unrealized gains (losses) on fixed maturity securities not other-than-temporarily impaired
 264,680 
Net unrealized gains (losses) on fixed maturity securities other-than-temporarily impaired
  
Subtotal170,151 264,680 
Income taxes(36,196)(56,302)
Net unrealized investment gains (losses)$133,955 $208,378 
12

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
The change in net unrealized gains (losses) on available-for-sale securities reported in accumulated other comprehensive income was as follows as of and for the periods indicated:
Three months ended
September 30,
(Amounts in thousands)
20212020
Beginning balance$159,854 $152,948 
Cumulative effect of change in accounting, net of taxes— — 
Unrealized gains (losses) arising during the period:
Unrealized gains (losses) on investment securities(32,185)37,225 
Provision for income taxes6,848 (7,697)
Change in unrealized gains (losses) on investment securities(25,337)29,528 
Reclassification adjustments to net investment (gains) losses, net of taxes of $149 and $(339), respectively
(562)1,271 
Change in net unrealized investment gains (losses)(25,899)30,799 
Ending balance$133,955 $183,747 
Nine months ended
September 30,
(Amounts in thousands)
20212020
Beginning balance$208,378 $93,431 
Cumulative effect of change in accounting, net of taxes281  
Unrealized gains (losses) arising during the period:
Unrealized gains (losses) on investment securities(94,724)109,822 
Provision for income taxes20,148 (21,063)
Change in unrealized gains (losses) on investment securities(74,576)88,759 
Reclassification adjustments to net investment (gains) losses, net of taxes of $34 and $(414), respectively
(128)1,557 
Change in net unrealized investment gains (losses)(74,704)90,316 
Ending balance$133,955 $183,747 
Amounts reclassified out of accumulated other comprehensive income to net investment gains (losses) include realized gains (losses) on sales of securities, which are determined on a specific identification basis.








13

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
Fixed Maturity Securities Available-For-Sale
As of September 30, 2021, the amortized cost, gross unrealized gains (losses), allowance for credit losses and fair value of our fixed maturity securities classified as available-for-sale were as follows:
(Amounts in thousands)
Amortized
cost
Gross unrealized gainsGross unrealized losses
Allowance for credit losses
Fair
value
U.S. government, agencies and GSEs$62,579 $2,539 $(1)$ $65,117 
State and political subdivisions449,370 12,650 (2,237) 459,783 
Non-U.S. government22,423 343 (8) 22,758 
U.S. corporate2,825,145 132,821 (9,860) 2,948,106 
Non-U.S. corporate690,717 23,390 (1,504) 712,603 
Other asset-backed1,155,682 13,216 (1,198) 1,167,700 
Total fixed maturity securities available-for-sale$5,205,916 $184,959 $(14,808)$ $5,376,067 
As of December 31, 2020, the amortized cost, gross unrealized gains (losses) and fair value of our fixed maturity securities classified as available-for-sale were as follows:
  
Gross unrealized gains
Gross unrealized losses
 
(Amounts in thousands)
Amortized
cost
Not
other-than-
temporarily
impaired
Other-than-
temporarily
impaired
Not
other-than-
temporarily
impaired
Other-than-
temporarily
impaired
Fair
value
U.S. government, agencies and GSEs$134,215 $4,009 $ $ $ $138,224 
State and political subdivisions172,631 14,749  (3) 187,377 
Non-U.S. government29,592 1,439    31,031 
U.S. corporate2,695,009 194,961  (1,345) 2,888,625 
Non-U.S. corporate578,295 32,251  (2,877) 607,669 
Other asset-backed1,172,174 21,830  (334) 1,193,670 
Total fixed maturity securities available-for-sale$4,781,916 $269,239 $ $(4,559)$ $5,046,596 












14

ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2021 and 2020
(Unaudited)
Gross Unrealized Losses and Fair Values of Fixed Maturity Securities Available-For-Sale
The following table presents the gross unrealized losses and fair values of our fixed maturity securities for which an allowance for credit losses has not been recorded, aggregated by investment type and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of September 30, 2021:
 
Less than 12 months 
12 months or more
Total
(Amounts in thousands)
Fair
value 
Gross unrealized losses
Number of securities
Fair value
Gross unrealized losses
Number of securities
Fair value
Gross unrealized losses
Number of securities
Fixed maturity securities:         
U.S. government, agencies and GSEs$104 $(1)1 $ $  $104 $(1)1 
State and political subdivisions170,402 (2,237)33    170,402 (2,237)33 
Non-U.S. government10,777 (8)1    10,777 (8)1 
U.S. corporate409,396 (8,433)61 21,543 (1,427)2 430,939 (9,860)63 
Non-U.S. corporate145,571 (1,477)23 2,183 (27)1 147,754 (1,504)24 
Other asset-backed255,275 (1,174)44 3,726 (24)1 259,001 (1,198)45 
Total for fixed maturity securities in an unrealized loss position$991,525 $(13,330)163 $27,452 $(1,478)4 $1,018,977 $(14,808)167 
% Below cost:
<20% Below cost$991,525 $(13,330)163 $27,452 $(1,478)4 $1,018,977 $(14,808)167 
Total for fixed maturity securities in an unrealized loss position$991,525 $(13,330)163 $27,452 $(1,478)4 $1,018,977 $(14,808)167 
Investment grade$963,517 $(12,835)155 $27,452 $(1,478)4 $990,969 $(14,313)159 
Below investment grade28,008 (495)8    28,008 (495)8 
Total for fixed maturity securities in an unrealized loss position$991,525 $(13,330)163 $27,452 $(1,478)4 $