MGIC reported a net loss of $1.47 billion, or $18.17 a share, compared with prior-year net income of $121.5 million, or $1.47 a share. The reserve reflects the present value of expected future losses and expenses related to Wall Street bulk transactions.
Revenue climbed 8.7% to $399.1 million, helped by an increase in earned premiums and investment income.
The mean estimates of analysts polled by Thomson Financial were for a loss of $6.77 a share on $416 million in revenue.
MGIC said low cure rates -- the percentage of defaults resolved without a claim -- higher loss severities, and higher delinquencies had a "material impact" on the company's results.
Net premiums written jumped 25% to $380.5 million. New insurance written climbed 55% to $24 billion despite bulk business tumbling 53% to $2.4 billion. MGIC said in January it stopped writing the portion of its bulk business that insures loans that are included in Wall Street securitizations in the fourth quarter.
Last week, MGIC said its Mortgage Guaranty Insurance Corp. unit was implementing new underwriting criteria in an effort to improve the credit-risk profile of its new insurance written.
MGIC incurred $1.35 billion in losses, up from $187.3 million, reflecting increases in the number and size of loans that are delinquent, increased loss severity and decreased cure rates in certain markets -- particularly California and Florida. In January, MGIC projected it would record about $1.3 billion in incurred losses.