And now as we get into a year — 12 months ago, the environment is completely different. Inflation has really subsided. HPA has flattened out, has grown a little bit in certain sectors. So, there’s — credit still remains strong and I think investors realize that. So, I think, again, good — I wouldn’t be surprised if you see other entrants into the ILN market because I think that’s — it looks like it’s a good time to be tapping that side of the market.
Bose George: Okay, great. That’s helpful. And a couple of little modelling question. The other income line item was up, what was driving that?
David Weinstock: Yes, the safe line stock. Other income, and there’s a handful of things in there, but I would say probably the principal item of moving that up a little bit, so we had a couple of things, right? I mentioned that the derivatives in there. So, that was really the big thing that we had derivative gain this quarter. And last quarter, we had a small unfavourable valuation. So that’s really — that’s going to bounce around associated with the derivatives.
Bose George: Okay. Great. And then actually, just the share count was down a little bit as well. So just curious what drove that?
Mark Casale: Yes. We’ve repurchased — I think we’ve done 1.1 million shares repurchased through this year. We started in March, Bose, given a lot of that uncertainty with the KB index. So, we felt like, again, purchasing shares in that 90% to 95% book value really is pretty accretive to book value per share growth. So yes, that was really — that’s really the mover.
Operator: Your next question comes from the line of Doug Harter from Credit Suisse. Your line is open.
Doug Harter: Mark, can you talk about the pricing dynamics you saw in the second quarter and kind of whether that changed kind of over the course of the quarter?
Mark Casale: We didn’t — I think prices continue to move up. I mean, we were — our average premium on new insurance written was probably up equally, that was in the first and second quarters. I would say in the second quarter, probably a little bit more pricing around the tails, less base increases. But I think we’re at a good and we said it in the script. I mean it’s a pretty competitive — it’s always a competitive market, but it’s — I think the pricing from a normalized standpoint, right? And we say normalized at 2% to 3% claim rate. I think the pricing is — the unit economics of the pricing are kind of within that 12% to 15% range. I think given the uncertainty, though, Doug, right, I mean we still think things will — the recession should.
It’s the long-awaited recession. We’re still believing it’s in the ’24 time period as the impact of higher rates kind of work their way through especially smaller businesses, the consumer has a lot of cash now, and it’s still employed, but smaller businesses start to lay off. So you could start seeing that impact in ’24. So we’re still — there still is more price increases to be had, again, from a market standpoint. We’re always shooting to be in that mid-teens share — market share. And to the extent that we can optimize pricing around that, I think we’ll continue to do that. And I see that in the industry. We said this from the get-go. If you’re number one in share, it’s because you have the lowest price. It’s almost all best execution across both the engine and cards.
So there’s really no hiding that. So I think the game is, is how to optimize your premiumand maintain that share. And I think the whole industry has done a good job with it. I mean it’s been nice to see or heard for years that the industry is it’s not disciplined. And I think that’s the furthest thing from the truth. I think the key though is really the advent of the pricing engines, right? The industry has changed under three primary methods from the last 10 years. One, which people don’t talk too much about and not enough about is just the credit quality of the book, and that’s really a result of both the GSEs, the improvements around their engines, the qualified mortgage, which kind of keeps a lot of that I would say, core quality business outside of the GSE.
So the GSEs have really been a great guardrail. Second has been reinsurance, which we talked about, our ability to offload that risk. And the third is the pricing engines itself. Just the base engine, forget, our ability to optimize score or the Essent core, that’s great. That’s a little bit different when I’m talking about the engines itself and the ability to make changes on it have really changed the industry. So we were able to react during COVID. The industry raised pricing in the face of this uncertainty and then worked this past year, the ability to raise pricing in — across different MSAs, different tails, whatever appetite the MI — any participant had were able to impact that change, which, again, 5, 10 years ago, you couldn’t do it, you couldn’t institute a price increase every quarter with a rate card.
