* Fourth-quarter loss per share $1.34 vs $0.92 a year
* Writes $11.7 billion of new insurance
* Says risk-to-capital ratio to stay below 25:1 for 2013
* Expects $900 mln to $1 bln in net paid claims this year
* Shares up 4 percent
Feb 11 Mortgage insurer Radian Group Inc
said it expects to return to operating profitability in 2013 and
surpass the $37 billion in new insurance it wrote last year, as
it puts the worst of the housing crash behind it.
Mortgage insurers such as Radian, MGIC Investment Corp
, Genworth Financial Inc and Old Republic
International Corp sold billions of dollars of policies
at low prices during the housing boom and were stuck with huge
losses when the market crashed.
But five years after the market meltdown, profits on new
insurance are increasingly offsetting legacy losses.
Radian has also benefited as competitors have fallen by the
PMI Group Inc filed for bankruptcy two years ago and Old
Republic International and Triad Guaranty have stopped writing
new insurance. The Federal Housing Administration (FHA), which
backs about a third of all new mortgages, is also cutting down
on its exposure to the market given its depleting cash reserves.
"In 2012, more than 325 new customers chose Radian," Chief
Executive S.A. Ibrahim said on a post-earnings conference call.
More than a fifth of Radian's business now comes from
customers acquired in the last two years.
In January, the proportion was 25 percent, he added. Radian
sold $4 billion of policies in the month, twice the amount it
sold in January last year.
New mortgage insurance written in the fourth quarter nearly
doubled to $11.7 billion, the company said.
Radian's risk-to-capital ratio will also stay within
regulatory limits this year.
Mortgage insurers, which protect lenders in case home loans
turn bad, have been struggling to meet capital adequacy
benchmarks and several of Radian's competitors have sought
waivers to continue writing business in many U.S. states.
Radian's risk-to-capital ratio was 20.8 to 1 as of the end
of the year. Most U.S. states allow a maximum ratio of 25 to 1,
after which the insurer must seek waivers in individual states
to continue writing insurance.
POSTS FOURTH-QUARTER LOSS
The mortgage insurer posted a bigger-than-expected loss
after it set aside far more money to cover bad loans in the
September-December quarter than in preceding three months.
The loss for the quarter ended Dec. 31 increased to $177.3
million, or $1.34 per share, from $121.5 million, or 92 cents
per share, a year earlier.
Radian posted its first profit of the year in the
Radian set aside $306.9 million to cover mortgage losses in
the fourth quarter, up 79 percent from the preceding quarter.
Provisions were down 8 percent compared to a year earlier.
Radian said it expected to pay between $900 million and $1
billion in net claims during 2013, compared with $1.02 billion
Shares of the Philadelphia-based company, which traded at
more than $67 before the housing meltdown in 2007, rose 4
percent to $6.99 in midday trade on the New York Stock on