Mortgage insurance companies have had a busy year with many unprecedented changes, and the most recent earnings report shows those changes are paying off.

This year, MI companies upped their game, growing more competitive against the Federal Housing Administration with cuts to their mortgage insurance premiums. In fact, an analysis from the Urban Institute suggests private mortgage insurance is growing more competitive against the FHA.

Most new MI costs became effective in June of this year.

But this wasn’t the only change MI companies instated this year. Back in March, several MI companies announced a new standard for mortgages with over 45% debt-to-income ratios. Last year, Fannie Mae and Freddie Mac announced they were increasing their debt-to-income ratio to 50%, a move that mortgage insurance companies thought was too lax, and fought back against.

And now those changes seem to be paying off as MI companies report a surge in their second quarter earnings.

Radian reported Thursday an increase in its net income to $208.9 million in the second quarter, up from a net loss of $27.3 million in the second quarter of 2017. This increase also includes the impact of tax benefits related to an expected settlement with the Internal Revenue Service, as well as the reversal of certain previously accrued state and local tax liabilities.

But even when considering the adjusted pretax operating income, it still increased to $191 million in the second quarter, up 17% from $163.7 million in the second quarter of 2017.

This translated to a diluted net income per share of $0.69 in the second quarter, up 44% from $0.48 per share in the second quarter last year.

The company also saw a 10% growth in new insurance in force and 11% growth in book value. It reported a record-breaking new insurance written of $16.4 billion in the second quarter, up 41% from the first quarter this year and up 14% from last year.

Old Republic International Corp. also reported positive earnings results Thursday, showing a net income of $197.7 million in the second quarter, up a full 94.6% from $101.6 million in the second quarter of 2017.

Both companies also attributed the recent reduction in corporate tax rate from 35% to 21% as a positive and significant contribution to their earnings.

But even without taking the new tax rate into the equation, and leaving out unrealized fair value investment gains on equity securities in 2017, Old Republic still saw an increase of nearly 44% to its net operating income in the second quarter.

And earlier this month, Mortgage Guaranty Insurance Corp. reported an increase in its net income to $186.8 million or $0.49 per diluted share in the second quarter, up from $118.6 million or $0.31 per diluted share in the second quarter of 2017.

New insurance written increased to $13.2 billion, up from $12.9 billion in the second quarter of 2017. MGIC’s insurance force of $200.7 billion at June 30, 2018, showed an increase of 1.6% from the previous quarter and 7.2% from the same time last year.

“The favorable employment and housing trends we have been experiencing continued, and contributed to an increase of insurance in force, a reduction in new primary delinquent notices, a decline of the primary delinquent inventory, and additional positive primary loss reserve development that materially reduced net losses incurred,” MGIC and MTG CEO Patrick Sinks said.

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