Radian Group Expands Into Multi-Line Specialty Insurance With Inigo

Radian Group Inc. RDN recently inked a definitive deal to purchase Inigo Limited as it intends to expand beyond mortgage insurance into a broader, multi-line specialty insurance business. Pending regulatory approvals and other customary closing conditions, the transaction is expected to be completed in the first quarter of 2026. Inigo, founded in 2021, is a highly profitable Lloyd’s specialty insurer and has established itself as a highly focused, fast-growing, and profitable specialty insurer. In the first half of 2025, Inigo reported a profit before tax of $116 million and a net combined ratio of 86%. The company offers contemporary data-driven specialty insurance products to commercial and industrial clients and has established a track record of profitability and underwriting discipline.Financial Considerations for RDNRadian Group will acquire Inigo in a primarily all-cash transaction valued at $1.7 billion. This financially compelling transaction will be funded by using Radian Group’s excess capital and available liquidity sources without issuing new equity.Acquisition Rationale Favoring RDNThis buyout signals a major strategic shift where Radian Group will transform its business model from a leading U.S. mortgage insurer to a global, diversified multi-line specialty insurer. This, in turn, will expand the insurer’s product expertise and capabilities and optimize the deployment of its excess capital.The primarily all-cash deal will leverage Inigo’s strong performance with Radian Group’s solid capital position to expand into the large and attractive Lloyd’s global specialty market. The Inigo deal is expected to significantly boost financials. The deal values Inigo at 1.5 times its projected tangible equity at the end of 2025. Radian Group projects mid-teens percentage growth in earnings per share and approximately a 200-basis point increase in return on equity in the first full year after the transaction is closed in early 2026. This Zacks Rank #3 (Hold) insurer also expects the deal will double its total annual revenues. This will provide the resilience to deploy capital across multiple insurance lines through various business cycles.The U.S. mortgage insurer has also agreed to divest all businesses which were earlier reported in its “All Other” category, that consists of its Mortgage Conduit, Title, and Real Estate Services businesses. Radian Group remains focused on improving its mortgage insurance portfolio to drive long-term earnings growth. Business restructuring intensifies its focus on core business and services with higher growth potential, ensuring a predictable and recurring fee-based revenue stream. Radian Group thus, poised to benefit from a solid mortgage insurance market based on strong credit characteristics of new loans insured, declining claim payments. With this divestiture, the insurer intends to simplify its operations and focus on the new insurance venture, global multi-line specialty insurance business. The divestiture is estimated to be completed within the third quarter of 2026.Another Notable AcquisitionStrategic acquisitions bode well for long-term growth. In January 2024, Radian Group made a strategic investment in FinLocker, a personal financial fitness and homeownership tool, to support its growth and enhance the homeownership experience through personalized, data-driven tools. The collaboration between Radian and FinLocker was intended to align Radian Group's homegenius platform with FinLocker's financial fitness and homeownership platform.RDN’s Price PerformanceShares of Radian Group have gained 6.1% in the past year compared with the industry’s 6% growth.Image Source: Zacks Investment ResearchKey PicksSome better-ranked stocks from the insurance industry are Heritage Insurance Holdings, Inc. HRTG, The Travelers Companies, Inc. TRV and The Hanover Insurance Group, Inc. THG. While HRTG sports a Zacks Rank #1 (Strong Buy), TRV and THG carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Heritage Insurance’s earnings surpassed estimates in each of the last four quarters, the average surprise being 360.66%. Shares of HRTG have jumped 62.5% in the past year. The Zacks Consensus Estimate for HRTG’s 2025 and 2026 earnings implies year-over-year growth of 103.98% and 1.22%, respectively. The Travelers’ earnings surpassed estimates in each of the last four quarters, the average surprise being 89.97%. Shares of TRV have jumped 15.7% in the past year. The Zacks Consensus Estimate for TRV’s 2025 and 2026 revenues implies year-over-year growth of 15.3% and 4.8%, respectively.The Hanover Insurance’s earnings surpassed estimates in each of the last four quarters, the average surprise being 29.77%. Shares of THG have jumped 19.5% in the past year. The Zacks Consensus Estimate for THG’s 2025 and 2026 earnings implies year-over-year growth of 17.5% and 3.7%, respectively.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Travelers Companies, Inc. (TRV): Free Stock Analysis Report Radian Group Inc. (RDN): Free Stock Analysis Report The Hanover Insurance Group, Inc. (THG): Free Stock Analysis Report Heritage Insurance Holdings, Inc. (HRTG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks