Mihir Bhatia: Right. Got it. That makes sense and thank you for that. We would agree about that. The premium conversations have certainly been quite encouraging this quarter. Maybe just turning to the deal, and I understand you don’t want to talk about short term, like one, two years, what you’re seeing in terms of financial benefits or targets or anything at this early stage. But maybe like you mentioned, this is a long-term play for you three years, five years down the line. How are you going to be judging success of the deal from a financial standpoint? Do you think it’s like 20%, 30%, 40% of total profits for the combined Essent Group? Or is it a much slower longer tail than that where there’s like €“it takes a while to just build up that kind of momentum? Like how are you thinking about like €“ give us at least a long term something about how you’re thinking about judging the success of this acquisition ?
Mark Casale: Yeah, I mean it’s a fair question, right? I would say, again, I would go to — and we’re going to be disclosing separately, right? I mean just given the revenues of the title business relative to the revenues of the MI business, it would most likely be a separate segment. So this is going to play out for everyone. As you know, we’re going to be pretty transparent. I would say, we really look at returns at the end of the day. So we have these core return targets of 12% to15% in a core business. We have it within Essent Re. And I would remind you, when €“ Essent Re, we break it out, I think folks are going to be pleasantly surprised as to kind of the returns of the business. And just you saw €“ it’s in the script.
I mean you’re looking at almost $70 million of revenues, and there’s expenses assigned to that for sure, but there’s also investment income. So there’s — it’s a good business. It has. It’s right within that 12% to 15% return profile. The ventures, which is €“ it’s not really a business, but it certainly is a unit that we manage separately. That also has return targets. So we’ve had €“ we’ve returned €“ we’ve had pretty good return on that initial investment. I believe the IRR since inception is 17%. So it’s right again within that 12% to 15% target. And I think with title it’s going to be the same thing. It’s a little bit capital-light, so the returns should be higher. In terms of the growth, I mean, Mihir, we’re going to have €“ it’s going to be €“ business is an iterative process.
So we’re going to get in there. We have two, and these are really two businesses, right? You have the antique business, which is almost like a wholesale. It’s an underwriter, but it attracts title agents. It’s relatively small. 200 title agents that they have. So we’re going to €“ as we look at antique, it’s going to be how can we grow their base of title agents? How can we activate new agents, right? How can we build out a larger salesforce? How can we scale some of those things? How can we use our capital to make — from a ratings perspective to make it more attractive for salespeople to come work for us and for agents that want to use us, right? What offerings can we invest in to make that attractive? On the B&T side, I mean, they’re really €“ they are a top 10 player on €“ with lenders really around centralized refinancings, which has clearly been down.
