What Enact Holdings, Inc. told the SEC could break it.

Although Enact (a private mortgage insurer) serves ~1,600 mortgage lenders diversified by size, type and geography, its volume is concentrated in a few large originators: its single largest customer accounted for ~22% of total new insurance written (NIW) and ~12% of total revenue (~$145M) in 2025 (up from 20%/11% in 2024 and 19%/10% in 2023), and its top five customers generated ~33% of NIW. Lenders can choose which mortgage insurers to use (or limit to a few), so the loss of, or reduced flow from, the largest customer — or a customer's decision to drop Enact from its approved-MI panel — could materially reduce NIW and revenue, and may not be replaceable. The customer is unnamed, so an aggregate concentration risk rather than an edge. Severity high.

“Our largest customer accounted for 22% of total NIW and 12% of our total revenues for the year ended December 31, 2025”

Enact's entire business model is structurally dependent on the GSEs (Fannie Mae and Freddie Mac, under FHFA conservatorship): private mortgage insurance is required to meet the 80% LTV threshold for loans sold to the GSEs without other credit protections, and Enact must continuously satisfy the GSEs' Private Mortgage Insurer Eligibility Requirements (PMIERs), which set risk-based capital standards, to remain an approved/eligible insurer. Changes to GSE PMI requirements, PMIERs capital factors, a change to GSE conservatorship or GSE/government housing-finance reform, or loss of eligibility, would directly impair Enact's ability to write business. It is also extensively regulated by state insurance departments (capital adequacy, contingency reserves), where insufficient regulatory capital could restrict operations or hit financial-strength ratings. A sector-defining government-program/regulatory dependence. Severity high.

“in order to meet the 80% LTV threshold required for sale to the GSEs without certain credit protections.”

Enact relies on Credit Risk Transfer (CRT) transactions — insurance-linked notes and quota-share reinsurance — to transfer risk and obtain capital relief under PMIERs, freeing capacity to write new insurance. The availability and cost of CRT depend on conditions beyond its control: general market conditions, changes in regulation, higher unemployment, or a significant negative shock to the U.S. housing market. In stressed markets it may be unable to obtain new CRT transactions on acceptable terms or at all, which would reduce its ability to manage required PMIERs capital and could constrain new-business growth or force it to hold more capital. A distinctive capital-markets/reinsurance dependence tied to the mortgage-insurance model. Severity medium.

“The availability and cost of CRT transactions may be impacted by conditions beyond our control, such as general market conditions, changes in regulation, higher rates of unemployment”