MGIC Investment Corp. (MTG)’s Fourth Quarter 2014 Earnings Call Trasncript

As a result I feel our company is in excellent position to take advantage of the opportunities being created today, but more importantly we are positioned nicely for growth and success in 2015 and beyond.

With that, operator let’s take questions.

Operator
Thank you. Ladies and gentlemen to ask a question please press * then 1 on yout telephone. If you question has been answered and you wish to remove yourself from the queue you may press the pound key. Our first question comes from Bose George with KBW. Your line is open.

Q: Good morning. Actually first, can you just go through the components of that $20 million benefit to the losses incurred line item?

Timothy J. Mattke – EVP and CFO
Sure. The $20 million benefit you’re referring to is the positive reserve development in the quarter. As Curt said just under half of it came from a favorable resolution of litigation revolving around our bulk business as far as claim paying practices. The other half I would say are adjustments to our IBNR, LAE and other within there. So I think the point we’re trying to make is there were no significant adjustments to severity or claim rate on the noticed inventory, but it was within those IBNR, LAE and other reserves that the adjustments were made.

Q: Okay great, thanks. And then actually just switching to investment income, just curious what driving that up the last couple of quarters?

Timothy J. Mattke – EVP and CFO
I think for the most part we try to move out a little bit on duration, that’s helped us and obviously from a credit perspective we have been able to get a little bit of yield there as well.

Q: Okay. And then just finally on the deferred tax asset can you just give us your latest thoughts on when that could potentially reverse?

Timothy J. Mattke – EVP and CFO
Sure, I think based on looking upon the results this year, as we said in the past it’s a complicated sort of formula in discussion, because there is no pure formula to it. But I think at this point there is a likely chance that it would come back on in 2015. When during the year we don’t know at this point, but I would say that 2015 looks more likely than 2016 at this point.

Q: Okay, great. Thanks and Curt good luck in retirement.

Curt S. Culver – Chairman and CEO
Yeah, thank you.