Nov. 7 (Bloomberg) -- Radian Group Inc. led a slump of mortgage insurers after Chief Executive Officer S.A. Ibrahim said increased competition pressured rates.
Radian dropped $1.02, or 7 percent, to $13.50 at 10:37 a.m. in New York. MGIC Investment Corp. slipped 6.5 percent.
MGIC and Philadelphia-based Radian more than doubled this year after selling stock and bonds to bolster capital as investors bet they will prosper in a housing rebound. The recovery has drawn newcomers, like Essent Group Ltd., which is backed by Goldman Sachs Group Inc. and JPMorgan Chase & Co. and had an initial public offering last month. Genworth Financial Inc. has said it is cutting rates for the coverage.
Executives at Radian “anticipate increased competition in our industry from new and existing mortgage insurance companies,” Ibrahim said. “Competitors recently reduced their borrower-paid mortgage insurance premiums by 5 basis points, which we promptly matched.”
Radian today posted a net third-quarter loss of $12.7 million. Genworth, which also sells life insurance, said last month that its U.S. mortgage unit had its first loss of the year in the three months ended Sept. 30.
Genworth slumped 4.4 percent while Essent slipped 1.9 percent. Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs.
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