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act-20230331
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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 March 31, 2023
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/ea4f619e24fea50a5f6d81872cd5e1f8-Enact Logo.jpg
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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 filer☐Accelerated filer☒
Non-accelerated filer☐Smaller 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): Yes ☐ No ☒
As of May 1, 2023, there were 161,580,827 shares of Common Stock, par value $0.01 per share, outstanding.


TABLE OF CONTENTS
Page
1

Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results and the quotations of management. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. Our forward-looking statements contained herein speak only as of the date of this quarterly report.
Although Enact Holdings, Inc. (the “Company”) believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved and it undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law. Factors or events that we cannot predict, including the following, may cause our actual results to differ from those expressed in forward-looking statements:
•inability to continue to maintain the private mortgage insurer eligibility requirements (“PMIERs”) or any other restrictions imposed on us by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), government-sponsored enterprises collectively referred to as the “GSEs”;
•deterioration in economic conditions or a decline in home prices, including a severe recession or impacts from banking sector volatility;
•uncertainty around COVID-19 and the remaining effects of forbearance programs and foreclosure timing;
•uncertainty of our loss reserve estimates or inaccuracies in our models;
•competition for our customers or the loss of a significant customer;
•changes to the charters or practices of the GSEs, including actions or decisions to decrease or discontinue the use of mortgage insurance;
•lenders or investors seeking alternatives to private mortgage insurance;
•failure of our risk management or loss mitigation strategies;
•fluctuations and continued increases in interest rates;
•limited availability of capital or reinsurance;
•adverse actions by rating agencies;
•competition with government-owned enterprises and GSEs;
•failure to manage the risk in our investment portfolio;
•disruption in the servicing of mortgages covered by our insurance policies or poor servicer performance;
•unanticipated claims arising under and risks associated with our delegated underwriting program or contract underwriting program;
2

•inadequacy of the premiums we charge to compensate for the losses we incur;
•decrease in the volume of Low-Down Payment Loan originations;
•failure to protect our confidential customer information;
•adverse changes in regulatory requirements;
•inability to maintain sufficient regulatory capital;
•risks relating to our continuing relationship with our parent;
•changes in tax laws;
•litigation, regulatory investigations or other actions;
•changes in accounting principles or policies or in our application of such accounting principles or policies;
•inability to attract and retain key employees;
•failure or any compromise of the security of our computer systems, disaster recovery systems, business continuity plans and failures to safeguard or breaches of confidential information; and
•occurrence of natural or man-made disasters or public health emergencies, including pandemics and disasters caused or exacerbated by climate change.
We provide additional information regarding these and other risks and uncertainties in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 28, 2023. In addition, unlisted factors may present significant additional obstacles to the realization of forward-looking statements. We therefore caution you against relying on any forward-looking statements.
3

Part I. Financial Information
Item 1. Financial Statements
ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
2023		December 31,
2022
(Amounts in thousands, except par value amount)(Unaudited) 
Assets  
Fixed maturity securities available-for-sale, at fair value (amortized cost of $5,337,054 and $5,371,673 as of March 31, 2023, and December 31, 2022, respectively)
$4,929,627 $4,884,760 
Short-term investments, at fair value2,185 3,047 
Total investments4,931,812 4,887,807 
Cash and cash equivalents621,621 513,775 
Accrued investment income35,945 35,844 
Deferred acquisition costs25,954 26,121 
Premiums receivable (net of allowance for credit losses of $868 and $873 as of March 31, 2023, and December 31, 2022, respectively)
42,005 41,738 
Other assets77,026 76,391 
Deferred tax asset107,868 127,473 
Total assets$5,842,231 $5,709,149 
Liabilities and equity
Liabilities:
Loss reserves$501,427 $519,008 
Unearned premiums188,680 202,717 
Other liabilities112,043 143,686 
Long-term borrowings743,460 742,830 
Total liabilities1,545,610 1,608,241 
Equity:
Common stock ($0.01 par value; 600,000 shares authorized; 161,938 shares issued and outstanding as of March 31, 2023, and 162,779 shares issued and outstanding as of December 31, 2022)
1,619 1,628 
Additional paid-in capital2,362,281 2,382,068 
Accumulated other comprehensive income(320,242)(382,744)
Retained earnings2,252,963 2,099,956 
Total equity4,296,621 4,100,908 
Total liabilities and equity$5,842,231 $5,709,149 
See Notes to Condensed Consolidated Financial Statements
4

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

 Three months ended
March 31,
(Amounts in thousands, except per share amounts)20232022
Revenues:
Premiums$235,108 $234,279 
Net investment income45,341 35,146 
Net investment gains (losses)(122)(339)
Other income612 502 
Total revenues280,939 269,588 
Losses and expenses:
Losses incurred(10,984)(10,446)
Acquisition and operating expenses, net of deferrals51,705 54,262 
Amortization of deferred acquisition costs and intangibles2,640 3,090 
Interest expense13,065 12,776 
Total losses and expenses56,426 59,682 
Income before income taxes
224,513 209,906 
Provision for income taxes48,525 45,276 
Net income$175,988 $164,630 
Net income per common share:
Basic$1.08 $1.01 
Diluted$1.08 $1.01 
Weighted average common shares outstanding:
Basic162,442 162,841 
Diluted163,179 163,054 
See Notes to Condensed Consolidated Financial Statements
5

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

 Three months ended
March 31,
(Amounts in thousands)20232022
Net income$175,988 $164,630 
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities without an allowance for credit losses
62,510 (224,300)
Foreign currency translation(8)29 
Other comprehensive income (loss)62,502 (224,271)
Total comprehensive income (loss)$238,490 $(59,641)
See Notes to Condensed Consolidated Financial Statements
6

ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Three months ended March 31, 2023
(Amounts in thousands)
Common
stock
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
equity
Balance as of December 31, 2022$1,628 $2,382,068 $(382,744)$2,099,956 $4,100,908 
Comprehensive income (loss):
Net income— — — 175,988 175,988 
Other comprehensive loss, net of taxes— — 62,502 — 62,502 
Repurchase of common stock(10)(22,190)— — (22,200)
Stock-based compensation expense and exercises and other1 2,403 — (225)2,179 
Dividends— — — (22,756)(22,756)
Balance as of March 31, 2023$1,619 $2,362,281 $(320,242)$2,252,963 $4,296,621 
Three months ended March 31, 2022
(Amounts in thousands)
Common
stock
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
equity
Balance as of December 31, 2021$1,628 $2,371,861 $83,581 $1,648,453 $4,105,523 
Comprehensive income (loss):
Net income— — — 164,630 164,630 
Other comprehensive income, net of taxes— — (224,271)— (224,271)
Stock-based compensation expense and exercises and other— 2,707 — — 2,707 
Balance as of March 31, 2022$1,628 $2,374,568 $(140,690)$1,813,083 $4,048,589 

See Notes to Condensed Consolidated Financial Statements
7

ENACT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three months ended
March 31,
(Amounts in thousands)20232022
Cash flows from operating activities:  
Net income$175,988 $164,630 
Adjustments to reconcile net income to net cash provided by operating activities:
Net investment losses122 339 
Amortization of fixed maturity securities discounts and premiums(657)(961)
Amortization of deferred acquisition costs and intangibles2,640 3,090 
Acquisition costs deferred(1,546)(1,629)
Deferred income taxes2,626 2,943 
Stock-based compensation expense2,179 2,715 
Amortization of debt issuance costs630 588 
Other— (8)
Change in certain assets and liabilities:
Accrued investment income(101)(1,504)
Premiums receivable(267)1,885 
Other assets986 2,874 
Loss reserves(17,581)(16,046)
Unearned premiums(14,037)(9,909)
Other liabilities(31,643)11,822 
Net cash provided by operating activities119,339 160,829 
Cash flows from investing activities:
Purchases of fixed maturity securities available-for-sale (121,118)(351,130)
Proceeds from sales of fixed maturity securities available-for-sale19,544 90,422 
Proceeds from maturities of fixed maturity securities available-for-sale136,776 114,211 
Net change in short-term investments863 — 
Other(2,602)— 
Net cash provided by (used in) investing activities33,463 (146,497)
Cash flows from financing activities:
Repurchase of common stock(22,200)— 
Dividends paid(22,756)— 
Net cash used in financing activities(44,956)— 
Net increase in cash and cash equivalents107,846 14,332 
Cash and cash equivalents at beginning of period513,775 425,828 
Cash and cash equivalents at end of period$621,621 $440,160 
See Notes to Condensed Consolidated Financial Statements
8
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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. In September 2021, we completed a minority initial public offering (“IPO”) for 18.4% of EHI’s common stock.
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 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 through our primary insurance subsidiary, Enact Mortgage Insurance Corporation, (“EMICO”), formerly known as Genworth Mortgage Insurance Corporation, with operations in all 50 states and the District of Columbia. We completed name changes to some of our subsidiary legal entities during the first quarter of 2022. EMICO is an approved insurer by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Fannie Mae and Freddie Mac are government-sponsored enterprises and we refer to them collectively as the “GSEs.”
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.
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. 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, 2022 and 2021.

9
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(2)Accounting changes
Accounting Pronouncements Recently Adopted
We have not adopted new accounting pronouncements in 2023.
Accounting Pronouncements Not Yet Adopted
There are no significant new accounting pronouncements impacting our financial statements.
(3)Investments
Net Investment Income
Sources of net investment income were as follows for the periods indicated:
Three months ended
March 31,
(Amounts in thousands)
20232022
Fixed maturity securities available-for-sale$41,375 $36,534 
Cash, cash equivalents and short-term investments5,620 10 
Gross investment income before expenses and fees46,995 36,544 
Investment expenses and fees(1,654)(1,398)
Net investment income$45,341 $35,146 
Net Investment Gains (Losses)
The following table sets forth net investment gains (losses) for the periods indicated:
Three months ended
March 31,
(Amounts in thousands)
20232022
Fixed maturity securities available-for-sale:
Gross realized gains$— $350 
Gross realized (losses)(122)(862)
Net realized gains (losses)(122)(512)
Net change in allowance for credit losses on fixed maturity securities available-for-sale— 173 
Net investment gains (losses)$(122)$(339)
There was no allowance for credit losses recorded on fixed maturity securities classified as available-for-sale as of March 31, 2023 or December 31, 2022 or activity during the three months ended March 31, 2023.
10
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Unrealized Investment Gains (Losses)
Net unrealized gains and losses on available-for-sale securities reflected as a separate component of accumulated other comprehensive income (“AOCI”) were as follows as of the dates indicated:
(Amounts in thousands)
March 31, 2023December 31, 2022
Net unrealized gains (losses) on investment securities:
Fixed maturity securities$(407,427)$(486,913)
Short-term investments(29)(30)
Unrealized gains (losses) on investment securities(407,456)(486,943)
Income taxes87,070 104,047 
Net unrealized investment gains (losses)$(320,386)$(382,896)
The change in net unrealized gains (losses) on available-for-sale securities reported in accumulated other comprehensive income was as follows as of and for the periods indicated:
Three months ended
March 31,
(Amounts in thousands)
20232022
Beginning balance$(382,896)$83,588 
Unrealized gains (losses) arising during the period:
Unrealized gains (losses) on investment securities79,366 (285,401)
Provision for income taxes(16,952)60,697 
Change in unrealized gains (losses) on investment securities62,414 (224,704)
Reclassification adjustments to net investment (gains) losses, net of taxes of $(26) and $(108), respectively
96 404 
Change in net unrealized investment gains (losses)62,510 (224,300)
Ending balance$(320,386)$(140,712)
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.

11
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Fixed Maturity Securities Available-For-Sale
As of March 31, 2023, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:
(Amounts in thousands)
Amortized
cost
Gross unrealized gainsGross unrealized losses
Fair
value
U.S. government, agencies and GSEs$43,772 $99 $(1,162)$42,709 
State and political subdivisions510,953 2,142 (81,317)431,778 
Non-U.S. government10,571 — (1,078)9,493 
U.S. corporate2,882,422 2,786 (205,723)2,679,485 
Non-U.S. corporate681,986 552 (52,036)630,502 
Residential mortgage-backed10,448 2 (106)10,344 
Other asset-backed1,196,902 1,133 (72,719)1,125,316 
Total fixed maturity securities available-for-sale$5,337,054 $6,714 $(414,141)$4,929,627 
Short-term investments2,214 — (29)2,185 
Total investments$5,339,268 $6,714 $(414,170)$4,931,812 
As of December 31, 2022, the amortized cost, gross unrealized gains (losses) and fair value of our investment securities were as follows:
(Amounts in thousands)
Amortized
cost
Gross unrealized gains
Gross unrealized losses
Fair
value
U.S. government, agencies and GSEs$46,319 $59 $(1,609)$44,769 
State and political subdivisions515,935 1,815 (97,894)419,856 
Non-U.S. government10,607 — (1,258)9,349 
U.S. corporate2,886,269 1,355 (240,761)2,646,863 
Non-U.S. corporate716,333 158 (63,647)652,844 
Residential mortgage-backed11,162 — (119)11,043 
Other asset-backed1,185,048 462 (85,474)1,100,036 
Total fixed maturity securities available-for-sale$5,371,673 $3,849 $(490,762)$4,884,760 
Short-term investments3,077 — (30)3,047 
Total investments$5,374,750 $3,849 $(490,792)$4,887,807 

12
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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 March 31, 2023:
 
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$9,024 $(187)6 $32,152 $(975)11 $41,176 $(1,162)17 
State and political subdivisions30,891 (1,835)6 380,669 (79,482)82 411,560 (81,317)88 
Non-U.S. government— — — 9,493 (1,078)1 9,493 (1,078)1 
U.S. corporate1,104,499 (28,535)292 1,445,412 (177,188)245 2,549,911 (205,723)537 
Non-U.S. corporate255,688 (6,862)77 338,163 (45,174)63 593,851 (52,036)140 
Residential mortgage-backed9,377 (106)5 — — — 9,377 (106)5 
Other asset-backed327,606 (5,760)115 716,264 (66,959)155 1,043,870 (72,719)270 
Total for fixed maturity securities in an unrealized loss position$1,737,085 $(43,285)501 $2,922,153 $(370,856)557 $4,659,238 $(414,141)1,058 
We did not recognize an allowance for credit losses on securities in an unrealized loss position included in the table above. Based on a qualitative and quantitative review of the issuers of the securities, we believe the unrealized losses are largely due to changes in interest rates and recent market volatility, and are not indicative of credit losses. The issuers continue to make timely principal and interest payments.
For all securities in an unrealized loss position without an allowance for credit losses, we expect to recover the amortized cost based on our estimate of the amount and timing of cash flows to be collected. We do not intend to sell nor do we expect that we will be required to sell these securities prior to recovering our amortized cost.
13
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the gross unrealized losses and fair values of our fixed maturity securities, aggregated by investment type and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of December 31, 2022:
 
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$43,873 $(1,600)18 $96 $(9)1 $43,969 $(1,609)19 
State and political subdivisions203,752 (40,988)43 196,235 (56,906)46 399,987 (97,894)89 
Non-U.S. government— — — 9,349 (1,258)1 9,349 (1,258)1 
U.S. corporate2,033,713 (131,150)468 568,171 (109,611)92 2,601,884 (240,761)560 
Non-U.S. corporate486,117 (35,515)125 155,345 (28,132)27 641,462 (63,647)152 
Residential mortgage-backed11,043 (119)6 — — — 11,043 (119)6 
Other asset-backed655,525 (31,684)217 375,810 (53,790)71 1,031,335 (85,474)288 
Total for fixed maturity securities in an unrealized loss position$3,434,023 $(241,056)877 $1,305,006 $(249,706)238 $4,739,029 $(490,762)1,115 
Contractual Maturities of Fixed Maturity Securities Available-For-Sale
The scheduled maturity distribution of fixed maturity securities as of March 31, 2023, is set forth below. Actual maturities may differ from contractual maturities because issuers of securities may have the right to call or prepay obligations with or without call or prepayment penalties.
(Amounts in thousands)
Amortized
cost
Fair
value
Due one year or less$187,395 $185,488 
Due after one year through five years2,323,642 2,186,748 
Due after five years through ten years1,386,185 1,218,687 
Due after ten years232,482 203,044 
Subtotal4,129,704 3,793,967 
Residential mortgage-backed10,448 10,344 
Other asset-backed1,196,902 1,125,316 
Total fixed maturity securities available-for-sale$5,337,054 $4,929,627 
As of March 31, 2023, securities issued by the finance and insurance, technology and communications, consumer—non-cyclical, and utilities industry groups represented approximately 33%, 13%, 12%, and 10%, respectively, of our domestic and foreign corporate fixed maturity securities portfolio. No other industry group comprised more than 9% of our investment portfolio.
As of March 31, 2023, we did not hold any fixed maturity securities in any single issuer, other than securities issued or guaranteed by the U.S. government, which exceeded 10% of equity.
As of March 31, 2023 and December 31, 2022, $25.4 million and $25.1 million, respectively, of securities in our portfolio were on deposit with various state insurance commissioners in order to comply with relevant insurance regulations.

14
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(4)Fair value
Recurring fair value measurements
We hold fixed maturity securities and short-term investments, which are carried at fair value. The fair value of fixed maturity securities and short-term investments are estimated primarily based on information derived from third-party pricing services (“pricing services”), internal models and/or broker quotes, which use a market approach, income approach or a combination of the market and income approach depending on the type of instrument and availability of information. In general, a market approach is utilized if there is readily available and relevant market activity for an individual security. In certain cases where market information is not available for a specific security but is available for similar securities, that security is valued using market information for similar securities, which is also a market approach. When market information is not available for a specific security (or similar securities) or is available but such information is less relevant or reliable, an income approach or a combination of a market and income approach is utilized. For securities with optionality, such as call or prepayment features (including asset-backed securities), an income or combination approach may be used. These valuation techniques may change from period to period, based on the relevance and availability of market data.
Further, while we consider the valuations provided by pricing services and broker quotes to be of high quality, management determines the fair value of our investment securities after considering all relevant and available information.
In general, we first obtain valuations from pricing services. If prices are unavailable for public securities, we obtain broker quotes. For all securities, excluding certain private fixed maturity securities, if neither a pricing service nor broker quotes valuation is available, we determine fair value using internal models. For certain private fixed maturity securities where we do not obtain valuations from pricing services, we utilize an internal model to determine fair value since transactions for similar securities are not readily observable and these securities are not typically valued by pricing services.
Given our understanding of the pricing methodologies and procedures of pricing services, the securities valued by pricing services are typically classified as Level 2 unless we determine the valuation process for a security or group of securities utilizes significant unobservable inputs, which would result in the valuation being classified as Level 3.
Broker quotes are typically based on an income approach given the lack of available market data. As the valuation typically includes significant unobservable inputs, we classify the securities where fair value is based on our consideration of broker quotes as Level 3 measurements.
For private fixed maturity securities, we utilize an income approach where we obtain public bond spreads and utilize those in an internal model to determine fair value. Other inputs to the model include rating and weighted-average life, as well as sector which is used to assign the spread. We then add an additional premium, which represents an unobservable input, to the public bond spread to adjust for the liquidity and other features of our private placements. We utilize the estimated market yield to discount the expected cash flows of the security to determine fair value. We utilize price caps for securities where the estimated market yield results in a valuation that may exceed the amount that would be received in a market transaction. When a security does not have an external rating, we assign the security an internal rating to determine the appropriate public bond spread that should be utilized in the valuation. While we generally consider the public bond spreads by sector and maturity to be observable inputs, we evaluate the similarities of our private placement with the public bonds, any price caps utilized, liquidity premiums applied, and whether external ratings are available for our private placements to determine whether the spreads utilized would be considered observable inputs. We classify private securities without an external rating or public bond spread as Level 3. In general, a significant increase (decrease) in credit spreads
15
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
would have resulted in a significant decrease (increase) in the fair value for our fixed maturity securities as of March 31, 2023.
For remaining securities priced using internal models, we determine fair value using an income approach. We maximize the use of observable inputs but typically utilize significant unobservable inputs to determine fair value. Accordingly, the valuations are typically classified as Level 3.
Our assessment of whether or not there were significant unobservable inputs related to fixed maturity securities was based on our observations obtained through the course of managing our investment portfolio, including interaction with other market participants, observations related to the availability and consistency of pricing and/or rating, and understanding of general market activity such as new issuance and the level of secondary market trading for a class of securities. Additionally, we considered data obtained from pricing services to determine whether our estimated values incorporate significant unobservable inputs that would result in the valuation being classified as Level 3.
A summary of the inputs used for our fixed maturity securities and short-term investments based on the level in which instruments are classified is included below. We have combined certain classes of instruments together as the nature of the inputs is similar.
Level 1 measurements
There were no fixed maturity securities classified as Level 1 as of March 31, 2023, and December 31, 2022.
Level 2 measurements
Fixed maturity securities:
Third-party pricing services
In estimating the fair value of fixed maturity securities, approximately 89% of our portfolio was priced using third-party pricing services as of March 31, 2023. These pricing services utilize industry-standard valuation techniques that include market-based approaches, income-based approaches, a combination of market-based and income-based approaches or other proprietary, internally generated models as part of the valuation processes. These third-party pricing vendors maximize the use of publicly available data inputs to generate valuations for each asset class. Priority and type of inputs used may change frequently as certain inputs may be more direct drivers of valuation at the time of pricing. Examples of significant inputs incorporated by pricing services may include sector and issuer spreads, seasoning, capital structure, security optionality, collateral data, prepayment assumptions, default assumptions, delinquencies, debt covenants, benchmark yields, trade data, dealer quotes, credit ratings, maturity and weighted-average life. We conduct regular meetings with our pricing services for the purpose of understanding the methodologies, techniques and inputs used by the third-party pricing providers.
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ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents a summary of the significant inputs used by our pricing services for certain fair value measurements of fixed maturity securities that are classified as Level 2 as of March 31, 2023:
(Amounts in thousands)
Fair value
Primary methodologies
Significant inputs
U.S. government, agencies and GSEs$42,709 Price quotes from trading desk, broker feedsBid side prices, trade prices, Option Adjusted Spread (“OAS”) to swap curve, Bond Market Association OAS, Treasury Curve, Agency Bullet Curve, maturity to issuer spread
State and political subdivisions$431,778 Multi-dimensional attribute-based modeling systems, third-party pricing vendorsTrade prices, material event notices, Municipal Market Data benchmark yields, broker quotes
Non-U.S. government$9,493 Matrix pricing, spread priced to benchmark curves, price quotes from market makersBenchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources
U.S. corporate$2,279,530 Multi-dimensional attribute-based modeling systems, broker quotes, price quotes from market makers, internal models, OAS-based modelsBid side prices to Treasury Curve, Issuer Curve, which includes sector, quality, duration, OAS percentage and change for spread matrix, trade prices, comparative transactions, Trade Reporting and Compliance Engine (“TRACE”) reports
Non-U.S. corporate$483,345 Multi-dimensional attribute-based modeling systems, OAS-based models, price quotes from market makersBenchmark yields, trade prices, broker quotes, comparative transactions, issuer spreads, bid-offer spread, market research publications, third-party pricing sources
Residential mortgage-backed$10,344 OAS-based models, single factor binomial models, internally pricedPrepayment and default assumptions, aggregation of bonds with similar characteristics, including collateral type, vintage, tranche type, weighted-average life, weighted-average loan age, issuer program and delinquency ratio, pay up and pay down factors, TRACE reports
Other asset-backed$1,124,332 Multi-dimensional attribute-based modeling systems, spread matrix priced to swap curves, price quotes from market makersSpreads to daily updated swap curves, spreads derived from trade prices and broker quotes, bid side prices, new issue data, collateral performance, analysis of prepayment speeds, cash flows, collateral loss analytics, historical issue analysis, trade data from market makers, TRACE reports

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ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Internal models
A portion of our Level 2 U.S. corporate and non-U.S. corporate securities are valued using internal models. The fair value of these fixed maturity securities was $183.6 million and $73.0 million, respectively, as of March 31, 2023. Internally modeled securities are primarily private fixed maturity securities where we use market observable inputs such as an interest rate yield curve, published credit spreads for similar securities based on the external ratings of the instrument and related industry sector of the issuer. Additionally, we may apply certain price caps and liquidity premiums in the valuation of private fixed maturity securities. Price caps and liquidity premiums are established using inputs from market participants.
Short-term investments:
The fair value of short-term investments classified as Level 2 is determined after considering prices obtained by pricing services.
Level 3 measurements
Broker quotes
A portion of our U.S. corporate and other asset-backed securities are valued using broker quotes. Broker quotes are obtained from third-party providers that have current market knowledge to provide a reasonable price for securities not routinely priced by pricing services. Brokers utilized for valuation of assets are reviewed annually. The fair value of our Level 3 fixed maturity securities priced by broker quotes was $3.2 million as of March 31, 2023.
Internal models
A portion of our U.S. corporate and non-U.S. corporate securities are valued using internal models. The primary inputs to the valuation of the bond population include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, duration, call provisions, issuer rating, benchmark yields and credit spreads. Certain private fixed maturity securities are valued using an internal model using market observable inputs such as the interest rate yield curve, as well as published credit spreads for similar securities, which includes significant unobservable inputs. Additionally, we may apply certain price caps and liquidity premiums in the valuation of private fixed maturity securities. Price caps are established using inputs from market participants. For structured securities, the primary inputs to the valuation include quoted prices for identical assets, or similar assets in markets that are not active, contractual cash flows, weighted-average coupon, weighted-average maturity, issuer rating, structure of the security, expected prepayment speeds and volumes, collateral type, current and forecasted loss severity, average delinquency rates, vintage of the loans, geographic region, debt service coverage ratios, payment priority with the tranche, benchmark yields and credit spreads. The fair value of our Level 3 fixed maturity securities priced using internal models was $288.3 million as of March 31, 2023.

18
ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following tables set forth our assets by class of instrument that are measured at fair value on a recurring basis as of the dates indicated:
 March 31, 2023
(Amounts in thousands) 
Total
Level 1
Level 2
Level 3 
Fixed maturity securities:    
U.S. government, agencies and GSEs$42,709 $— $42,709 $— 
State and political subdivisions431,778 — 431,778 — 
Non-U.S. government9,493 — 9,493 — 
U.S. corporate2,679,485 — 2,463,155 216,330 
Non-U.S. corporate630,502 — 556,371 74,131 
Residential mortgage-backed10,344 — 10,344 — 
Other asset-backed1,125,316 — 1,124,332 984 
Total fixed maturity securities4,929,627 — 4,638,182 291,445 
Short-term investments2,185 — 2,185 — 
Total$4,931,812 $— $4,640,367 $291,445 
 December 31, 2022
(Amounts in thousands)
Total
Level 1
Level 2
Level 3 
Fixed maturity securities:    
U.S. government, agencies and GSEs$44,769 $— $44,769 $— 
State and political subdivisions419,856 — 419,856 — 
Non-U.S. government9,349 — 9,349 — 
U.S. corporate2,646,863 — 2,426,237 220,626 
Non-U.S. corporate652,844 — 557,690 95,154 
Residential mortgage-backed11,043 — 11,043 — 
Other asset-backed1,100,036 — 1,096,555 3,481 
Total fixed maturity securities4,884,760 — 4,565,499 319,261 
Short-term investments3,047 — 3,047 — 
Total$4,887,807 $— $4,568,546 $319,261 
We had no liabilities recorded at fair value as of March 31, 2023, and December 31, 2022.
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ENACT HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following tables present additional information about assets measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value as of or for the dates indicated:
 Beginning
balance
as of
January 1, 2023
Total realized and
unrealized gains
(losses) 
Purchases
Sales
Settlements
Transfer
into
Level 3 (1)
Transfer
out of
Level 3 (1)
Ending
balance
as of
March 31, 2023
Total gains
(losses)
attributable to
assets still held
(Amounts in thousands)
Included
in net
income
Included
in OCI
Included
in net
income
Included
in OCI 
Fixed maturity securities: