* Fourth-quarter loss per share $1.34 vs $0.92 a year earlier
* 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 (Reuters) - 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 wayside.
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.
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 third-quarter.
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 in 2012.
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 Monday.