Lance Glinn:

Rick, Richard, thanks so much for joining us Inside the ICE House. Happy to have both you here.

Rick Thornberry:

Good to be here.

Richard Watson:

My pleasure.

Lance Glinn:

So Rick, I want to start with you. You've praised this acquisition of Inigo and called it a milestone for Radian. How does this deal advance really the long-term strategic vision that you've been building and why was this the right time to take such a significant step?

Rick Thornberry:

Yeah, I appreciate the question. We've been working on this for a number of years, trying to find the right way to diversify our business beyond this incredible mono-line MI business that we've built over the last almost 50 years. And I think we've been on a journey to think through the right strategic diversification for the business. And I would say, as I've told Richard, we met a lot of companies along the way over the last few years as we identified the opportunity to become more of a global multi-line specialty insurer as opposed to yeah, just purely the mono-line. The diversification of our business, and we'll probably talk about as we go through today, became the driving force. Met a lot of players, really didn't see the fit along the way until we kind of met Richard and his team. But we were looking for a business that when you put one and one together, obviously strategically they become a very different business.

And I would just say after meeting so many different companies coming along, Richard and the Inigo team, we felt this not only chemistry, but we felt a cultural fit. The financial size of the transaction fit well. We were able to do it within our own means. So as we look forward and we think about the combination of company, Richard and I just did a town hall on Monday upon the closing of this transaction. And we talked all about the excitement it creates for all employees, for our customers, our investors, the opportunity to put these two companies together kind of with almost no overlap, but with complete diversification from an insurance point of view. So we're excited about it. It's a huge step forward. Right. And again, the way we were able to construct it from a financial point of view put us in a situation where it becomes immediately accretive, both from an earnings point of view and an ROE perspective.

Lance Glinn:

Sure.

Rick Thornberry:

So strategically it's a fit. Financially, it's a fit. Culturally, it's a fit.

Lance Glinn:

And you mentioned, right, there are those stone-cold numbers, right, that are on the books that you look at to determine not just an acquisition, not just the merger, but really everything that you do. But outside of those, the intangibles, right, the culture aspect of it. Can you sort of just dive in on why culturally Inigo made sense?

Rick Thornberry:

Yeah. And truthfully, that was the... When we kind of construct what a perfect deal looks like, there are financial aspects of it. And there were transactions that we looked at that financially weren't as attractive, certainly as Inigo. But I would tell you what actually, the first time we met, right, over dinner last summer, two teams meeting, talking. The cultural fit from a way we think about people, the way we think about customers, the way we think about risk from a commitment to underwriting, use of data and analytics and technology to drive our business decisions. So that combination culturally-

Lance Glinn:

Sure.

Rick Thornberry:

Probably was the factor that said, yeah, financially this one can fit. But I've referenced, you have to kind of go through a lot of different meetings and discussions. But as we met the team, and truthfully, as it played all the way up through today, the more we've got to know the team and understand their philosophy, them to understand our philosophy, that's probably the bond that brings us together, even more so than the financial attractiveness of the deal is that we can coexist, work together strategically, kind of have a common mission and common approach as we go forward. And I think that's what make the essence of this deal so special.

Richard Watson:

And we'd worked really hard when we set the business up to have a strong culture because I'd seen companies and been part of companies that had worked brilliantly with a great culture. And I'd seen that then move away. I'd seen the other side of that too. And so when you do something like this, it's a great opportunity to really have a deliberate focus on culture. So when we looked at the logic of this deal and what was the perfect partner for Inigo, there were lots of cold numbers-

Lance Glinn:

Sure.

Richard Watson:

There were lots of strategic kind of tick box things, really wanted to work. But the big thing was, do you feel comfortable? Do I feel like this is a team of people who I can come to work with absolute passion and commitment and energy and feel like I'm working with somebody as opposed to alongside or against, or is it aligned? My life's too short to bother with-

Lance Glinn:

Sure. Sure.

Richard Watson:

That type of atmosphere.

Lance Glinn:

Sure.

Richard Watson:

I just got better things to do. So to me, that was really key. And I think when you invested a lot of time, it means a lot to the people you've bought in as well because you're bringing people in who have a certain type of behavior, they're looking for something out of there, coming to work every day. And that's been one of the really rewarding parts of this deal for me was genuinely being able to look 250 people in the eye and say, "Here is the perfect partner for you."

Lance Glinn:

And to that point, when it comes to long-term ambition, right, for Inigo, why was Radian the right partner?

Richard Watson:

Well, I think for us, the two portfolios mix really well. I mean, there's good capital diversification, there's no clash. We're not kind of fighting over markets or there's no issue there. We can continue to grow our respective businesses as much as we're able. And certainly if I touch on the Inigo business, it really is. I mean, I'm pleased the progress we've made. We've made good progress in five years. I'm really pleased with that, but we're still in the big scheme of life as a small part of the specialty insurance and reinsurance business. So there's tons of opportunity for us to find growth. And it won't be every year. This is not a kind of straight top line linear growth story.

I mean, our market is a cyclical one. You've got to be prepared to allocate capital and act appropriately according to the market. But when you look over a five, 10, 15, 20 year time period, which is what I like to look over and just think about what we're doing, getting close to the customer, really doubling down on the data analytics piece and then building this culture that hopefully smart, driven, amazing people want to come and work at, there's just no reason why that can't grow over the next 10, 20 years. So I think the opportunity to market of this size is very exciting for us.

Rick Thornberry:

Yeah. One thing I just would pick up on that Richard mentioned is, yeah, in that first meeting and every meeting sense, their commitment to customer, our commitment to customer, I know those words sound just kind of-

Lance Glinn:

Sure.

Rick Thornberry:

Everybody says them, right? Every CEO of every company talks about their commitment to the customer. But I think when you hear us both talk about how we approach that market leadership from a customer commitment point of view, it's unique. And what we saw in that meeting with Richard and his team that first time and then subsequently was a commitment to doing something different in the space. And I think that positions them to kind of really think logically and strategically about how they grow their participation in the market. And their program, they've kind of found ways to really engage with the customer at a different level, leveraging data and analytics and insightful information through programs, which is uncharacteristic in the market. So I remember that first meeting we had, it was a dinner, by the way. I have referenced there.

Lance Glinn:

Okay.

Rick Thornberry:

It was a dinner where we had it. And I listened to them talk and you mentioned earlier the cold numbers kind of thing, but then the intangibles. That customer side of it, that commitment to being thoughtful about underwriting, the discipline of underwriting, bringing that all together for the benefit of the customer just resonated with me. And it's just continued to reinforce the opportunity both companies have to come together. So I just want to highlight that. They've done something unique. They're very good at what they do. They're very good at their craft and their trade. Obviously-

Richard Watson:

Oh, very kind.

Rick Thornberry:

They got a long track record. But I would say they've also tried to approach it in a better way. And we saw some immediate alignment in that right out of gate in terms of how we think as well. So that was important.

Lance Glinn:

And I want to ask real quick about this dinner, because you brought up the dinner quite a few times. Was it-

Rick Thornberry:

It was a great dinner.

Richard Watson:

It was a really good deal. We would've signed the deal there and then.

Lance Glinn:

Do we remember what was on the menu?

Rick Thornberry:

Oh, yeah. Absolutely.

Lance Glinn:

What was on the menu? What we talking?

Richard Watson:

Inigo, I think.

Lance Glinn:

Steak?

Rick Thornberry:

Inigo.

Lance Glinn:

Lobster, steak?

Rick Thornberry:

Steak.

Lance Glinn:

There we go. And then my second question is, was it, because it feels sort of like a love story or so, was it love at first sight? Was it love at first sight?

Rick Thornberry:

So it's funny you say that.

Richard Watson:

Wow.

Rick Thornberry:

Well, go ahead. You...

Richard Watson:

I mean-

Lance Glinn:

I'll let either one of you go. Whoever wants to answer.

Richard Watson:

I would say 100%. I mean, I talk about love a lot. I mean, I think it is. When you build a business, you're very passionate about it.

Lance Glinn:

Sure.

Richard Watson:

It is a big emotional thing. It's not just hard numbers. I mean, for me, I'd spoken to a good number of people. We'd investigated a lot of different options. What was the right option for us? And the best bit of this dinner was coming out of it and you're in the cab on the way back to the hotel and I was with two of my colleagues and you have that, "What did you think? What do you think?" And we were all just bouncing off the walls. We were like, "Oh my God, this is so perfect. This is just brilliant. It's just what we've been looking for." And every other meeting we'd had, there'd been some element of compromise.

Lance Glinn:

Sure.

Richard Watson:

There was some part of the portfolio that clashed or they didn't want or-

Lance Glinn:

Sure.

Richard Watson:

They didn't love. So, oh my God, this was the first meeting we had where we came out and we were just, this is so perfect from the business point of view, but also from that cultural match. So yeah, it was such an extraordinary moment because I think it's fair to say from both sides, I think you had that same sentiment. If you literally could have signed on the dotted line there and then I would've signed. Like damn, we'll figure the details out. It's done.

Rick Thornberry:

It's funny you use those words, love at first sight, because I used that in a town hall the other day.

Richard Watson:

Yeah.

Lance Glinn:

Okay.

Rick Thornberry:

And I said in a professional business sense, I think both sides just kind of felt because as Richard had gone through kind of a courting process with others, we had met everything from the wild, wild west show to-

Lance Glinn:

Sure.

Rick Thornberry:

Really finite kind of business models, things that didn't offer. So from a business model, cultural, financial, but I'd just say the chemistry between the teams and how we kind of thought about the opportunity together, it was apparent on day one.

Richard Watson:

Yeah.

Rick Thornberry:

You don't know how that works through diligence, how that works through a whole closing process, but I would say that's only gotten better and the excitement that we carry into day three now, I guess, day three-

Lance Glinn:

Wow.

Rick Thornberry:

Together is pretty high, so.

Lance Glinn:

So you mentioned business model specifically of Radian and this deal, Rick, seems to be a natural extension of Radian strategy rather than a pivot from what the company has already been doing. So from your vantage point, how do Radian's strengths in underwriting discipline, analytics, capital stewardship translate into the demands and the environment of specialty insurance that Inigo lives in?

Rick Thornberry:

I think, look, there's very little business overlap between the two models. Mortgage insurance doesn't really lay up comparably to the specialty insurance-

Lance Glinn:

Sure.

Rick Thornberry:

Products that they offer. But I think that insight, leveraging data and analytics, leveraging AI and all the buzzwords of the day, but kind of bringing our proprietary data and analytics kind of mindset and our view of going back to the customer, kind of thinking about that discipline, committed view of underwriting kind of through the cycle. So we have different cycles. That's one of the beautiful things about this business. Totally uncorrelated almost to a few decimal points-

Lance Glinn:

Sure.

Rick Thornberry:

When you look at it, certainly there's corner cases. But for us, it's that same kind of level of commitment that if you think about it, if we in our MI business had this like underwriting, data and analytics, customer kind of just force, and then we had kind of the wild, wild west show on the other side-

Lance Glinn:

Sure.

Rick Thornberry:

From a specialty insurance that very little data and analytics, more customer kind of relationship, hey, we do this deal because the discipline that they have, the discipline we have, it's very similar and very different models. So I think culturally, philosophically, risk management wise, we align very well. Even though the two businesses don't overlap, they don't kind of exploit the same markets, different customer sets, it's just a philosophical consistency. So you mentioned that it wasn't a pivot, it was kind of an expansion of our strategy.

Lance Glinn:

Sure.

Rick Thornberry:

And that was intentional. I mean, I'm coming up on nine years, I think, if I look at a calendar of Radian, and we've been looking for that perfect size of diversification. This doubles our revenues when you look at it. We did an investor presentation when we announced the deal, and the size of it from a strategic diversification makes a difference. It matters. And the beauty of the deal and the unique financial structure that we are able to do it makes it meaningful on day one, where we could use our own excess capital, kind of a creative note structure that we worked on from our mortgage insurance subsidiary, all to fund the purchase within our own means, if you will. So very, very significant, very purposeful, and I think truly creating the diversification we're looking for.

Lance Glinn:

And Richard, Inigo comes to Radian with this reputation, strong results, disciplined execution, growth. What do you see as sort of the biggest drivers of the company's performance? And how do you envision maintaining that edge that you've already built now being a part of a publicly traded company?

Richard Watson:

I think the biggest edge by Country Mile has been the people. It's just, can you get really smart people on board? Can you motivate them? Can you give them a compelling vision? Can they turn up every day with a sense of excitement and opportunity? And I'm pleased with the progress we've made there. I'm sure there'll be lots of moments when we can do it better. But for me, that opportunity to bring a fantastic team of people together, to get in front of a customer, to get excited about solving a customer's problem, it's just a very exciting prospect. And when we talk to Rick about the Radian business, and there's this common alignment on that approach to running a good business, to actually the good business needs that sort of core strength of great people, good culture-

Lance Glinn:

Sure.

Richard Watson:

Et cetera. I mean, that to me frees us to go and get on with what we do, which is we love sitting in front of a customer, getting the customer into the office, showing them what we do, how we do it, playing our data back to them, helping them hopefully see their risk in a slightly different way than perhaps what they've seen already. So that idea of sitting in front of a customer and having something unique and interesting to show them is really exciting. I mean, our team has a genuine thrill when we sit in front of these customers and we can talk about how we can help them. And so for me, talking to Rick has allowed us to now almost put capital aside. I mean, it's a dark thing for a CEO to say, right? But I don't want half my-

Lance Glinn:

For sure. I get it. I get it.

Richard Watson:

I don't want half my day to be worrying about capital. I mean, it's important. I want to allocate it sensibly. I want to take good-

Lance Glinn:

Sure.

Richard Watson:

Care of it.

Lance Glinn:

Sure.

Richard Watson:

But actually what I really want to do is get on the front foot in front of customers. I want us to push the boundaries in terms of how we're using data and analytics. I want us to push the boundaries and how we treat our customers and how we talk to them and I want to get on and do all that. So this has been great because suddenly you're talking to a company that has strong capital, has a commitment to all the things we want to do and understands the importance ultimately of great underwriting.

Lance Glinn:

Yeah.

Richard Watson:

And that's a really important point. And you emphasize that again in that first meeting, is that in the fine analysis, great insurance companies hinge around having consistently good underwriting.

Rick Thornberry:

Yeah.

Richard Watson:

If you can do that year-on-year on year-on-year, it's the accumulation of little improvements, little out performance over time. That's worth a lot.

Rick Thornberry:

Richard raises a really important point too, because I think you think about this combination, we have a mortgage insurance business, a market leader. You in a very quick short timeframe have developed a market leadership kind of position with a lot of opportunity a head of you. But the unique combination is you have a mortgage insurance business that generates excess capital, right? And truthfully, that's what we've been in pursuit of, is to find a right home for that excess capital. The opportunity that Inigo provides is an opportunity to find a path to invest that capital and attractive risk adjusted returns.

So two market leaders, one in a position that generates excess capital, one that provides an opportunity to potentially use that capital from a growth perspective. That's where the financial kind of attractiveness of this deal ultimately is going to get met is that capital allocation between businesses and other things as we think going forward. So I think yeah, that part, to Richard's point, we should never say that we have unlimited capital. There's no capital concern, but his business combined with this great Radian mortgage insurance business, two talented teams, two deep customer base kind of with a commitment to underwriting is a unique combination.

Lance Glinn:

And Richard, in your answer, you talked about obviously the importance of capital. At the New York Stock Exchange. Right. We all know the importance of capital, but you do want to get in front of the customers. You want to be the very best you can be. You want to enjoy what you do and you want to make sure you do it at the top level for sure. And I want to now pivot the conversation on those topics to leadership, and especially leadership during the time of transition and during the time of obviously an acquisition. And so for Rick, to start with you, obviously when you're going through something like this, mindset and strategy are of the utmost importance, but what principles really guide you, right? How do you approach leadership when an organization like Radian is evolving at scale and bringing in another business?

Rick Thornberry:

Yeah. I think one is build trust, be transparent, yeah, be consistent. Yeah. Richard and I have spent a lot of time talking about the fact that through this process, both of us have delivered what we said. And I think, and I've gone through other M&A events over my career. I've been on both sides of that transaction.

Lance Glinn:

Sure.

Rick Thornberry:

I've sat in Richard's seat where I built the company from scratch and sold it. So I've shared those experiences with them along the way. I think I've kind of guided you fairly through some of that fun stuff.

Richard Watson:

100%.

Rick Thornberry:

So I think it's just really building trust, being transparent, understanding that there is some emotion to any kind of transaction like this for a lot of individuals, not just Richard and the other founders, but for the entire team because there's change. So I think myself and my team have tried to keep that in mind as we've gone through this. We are a public company, they're joining a public company, so we have to teach them about, kind of remind them in some cases, remind them of the public company kind of positioning. But I think, look, we're a company that's led by our values. They're a very value-driven company. Actually, there's a lot of overlap in those values. We may just say them in different words, but the commitment to it. So I think we just stay true to that, build trust, be very transparent, be honest and open with each other where we disagree.

And I think over the last several months bringing us to this point, that has served us well. And I think the other thing I just want to say, because I've said this to Richard, is our intention is not to disrupt the magic that he and his team have built. They have built an incredible business. There's things that we can bring to them, help them with, capital and other things.

Lance Glinn:

Sure.

Rick Thornberry:

But at the end of the day, the most important thing is for him and his team to continue to do what they do really well. They're very good at what they do, their customers respect them, their counterparties respect them. So for us, it's to support that and continue to try to find ways to improve on that mission.

Lance Glinn:

And then so to play off that, Richard, for you, when you're stepping into a large organization, it's obviously important, I would think, to maintain Inigo's culture and obviously to do that requires that guidance from the top. How do you guide your team through this change while keeping them confident, keeping them focused, and keeping them engaged on the mission and the value that you guys have built over these last few years?

Richard Watson:

Yeah, I think it's been really important to the process for two things, to try and make it not a distraction. At the end of the day, I mean, one of the big messages we spoke about a lot is if we do a really good job, if we get our heads down, work really hard, do something really well, we'll have choices about the future.

Lance Glinn:

Sure.

Richard Watson:

We can make a choice. If we don't do that, get distracted, our results aren't strong, then the choices will be made to us.

Lance Glinn:

Sure.

Richard Watson:

So the big thing was don't let this distract you. This is the normal course of business. If we're good, we will have choices. We'll find the right partner. So that was, I think, something we spoke about as a team a lot. That was really important. And I genuinely don't think the business skipped a beat. I mean, I just don't think it was distracted in any way. There was an increased workload through the diligence process.

Lance Glinn:

Sure. Sure.

Richard Watson:

People had to-

Rick Thornberry:

Little bit of fun.

Richard Watson:

Really double down on that point of view. But in terms of the broker experience, the customer experience, what we were developing, I don't think we missed a beat. I mean, the team did it extremely well. And the other thing that Rick I think rightly touched on is this transparency piece. I mean, we are incredibly transparent, both with our customers. How do we calculate the price? Where does it come from? What assumptions are we making? It's not a black box. We'll open the whole thing up in a way that I don't think any other insurance company does. We do the same with our staff. We're very open. I mean, I think we were fortunate because we had really good private equity backers. I mean, I would say-

Lance Glinn:

Sure.

Richard Watson:

They did a great job in backing us when we had nothing, just plan and an ambition. They did a great job. So we'll always be indebted to them, but we always knew as well that that was only going to last so long. So I think from the get go, there was always this opportunity to find the next block of capital, the next step.

Lance Glinn:

Sure. Sure.

Richard Watson:

It was an obvious thing. And so for us, we talked about it quite a lot. We told people what was going on within a degree. I mean, you've got to respect an element of-

Lance Glinn:

Sure. Of course.

Richard Watson:

A boundary and confidentiality, but we were pretty open. We're having these conversations. This is what we're looking for. And I think it was, for me as a CEO, to be able to have outlined to everybody what we want, here are the sort of five or six things we're really looking for and to be able to stand up six months later and say, "We've got it."

Lance Glinn:

Yeah.

Richard Watson:

Every single one of these things. That was fantastic. I think that the hard thing for me would've been an element of compromise.

Lance Glinn:

Sure.

Richard Watson:

Yeah. We've got this.

Lance Glinn:

Sure.

Richard Watson:

But by the way, this is going to be different. There's going to be cost synergies. There's going to be some... Oh God, that would have been really, really tricky. But I was very fortunate that we'd outlined what we wanted. We'd held people's hand. The business didn't get distracted, and then we found the perfect partner.

Lance Glinn:

Absolutely. And to Rick, to your point in your earlier answer, right, because what Inigo does is different than what Radian does, you want or you're bringing in Inigo to continue to do what they do. Right.

Rick Thornberry:

Yep.

Lance Glinn:

You're not trying to completely change their identity. You're not trying to change the things that they've been doing that have made them successful. You want them to keep doing what they're doing, but obviously there are things that a publicly traded company can provide when it comes to things like capital or insights or whatnot, right? So to your point, right, just keeping people not distracted, allowing people to continue to do the work that they've been doing for the years before all of this has been happening, I could see is of the utmost importance for both of you over the course of this whole process. I do want to shift now the conversation because it's one that sort of works its way into all the conversations we have regardless of the industry that we're talking to, and that's artificial intelligence.

And really the impact and the influence that AI is having on every industry of the business landscape because it is. And it's both in business as well as our daily lives. Right. We all use the ChatGPTs, the Copilots, the Geminis, whatever, you name it. We all use it in some way, shape, or form. So Richard, I'll start with you. Specialty underwriting is something that requires a lot of what I think AI can provide, right? Speed, pattern recognition, efficiency. How does it augment an underwriter's expertise and aid in what Inigo does?

Richard Watson:

I mean, I think this is the best thing that's happened to our market in the 40 plus years I've been doing this. I can do things now that I dreamt of being able to do when I was sitting there as an underwriter. If I give you a simple example, if I look at a typical customer for us is an S&P 500 company. They have a whole schedule of buildings, they have engineering reports, they have a history of claims reports-

Lance Glinn:

Sure.

Richard Watson:

With incidents that's happened, and that is the sort of massive information that we get presented. And in the past, it's been a bit spotty as to what we got, what we didn't get. Did it all come across? Did some of it come across? And at the end of the day, our underwriters aren't engineers. I mean, they're reading engineering reports, they're reading complex technical documents and relying on the advice of a range of professionals. But in the final analysis, they're having to absorb it against some quite tight time schedules and having to make quite big decisions. It's tough. So anything that can help us digitize, analyze-

Lance Glinn:

Sure.

Richard Watson:

Organize this information and start over time to see a strong correlation or pattern between certain types of exposure, behavior, certain locations, certain geographies, whatever it might be, and ultimate outcomes for the customer. I mean, that's gold dust to us. So the fact that in the past we will be getting PDF files, we'd be getting paper copies still. And at the end of the day, most of that information just gets binned.

Lance Glinn:

Yeah.

Richard Watson:

Well, if we can just change that, if we can get all the engineering reports, all the risk information, we can scrape as much information from external sources as possible, take all the claims information. Imagine in a big claim, there's going to be incredible level of-

Lance Glinn:

Sure.

Richard Watson:

Detail and really important information. And typically the industry has lost that. So for me, I think this is a phenomenal opportunity for us. If we build it correctly.

Lance Glinn:

Sure.

Richard Watson:

If we access it, we store it, we get it in a way that is accessible and we can look in different patterns over time, I mean, it's going to be, is already an extraordinary opportunity for us. So as an underwriter, I'm sure there are moments when you think, Oh, is my job going to be replaced? Is it going to be taken? No, no, absolutely not. I'm sure there are elements of the market where that is the case, but this is a strong customer interaction. We still need people upfront.

Lance Glinn:

Sure. There's a human touch to it that will always be there.

Richard Watson:

We still need people upfront, but I want them to have incredibly informed decisions and interactions with the customer because that way... I mean, ultimately, this sort of stuff that ultimately saves lives and if we can start to point out patterns, if we can start to point out, if you do this, this is less likely to happen, I mean, that's an incredible thing.

Lance Glinn:

Yeah.

Richard Watson:

So no, for me, we're pouring as much time and energy as we can to try and find these opportunities. And it's like, that's the old thing about when's the best time to plant a tree? 20 years ago. I mean, even now we're like, "God, I wish we'd done this five years ago." So-

Lance Glinn:

Sure.

Richard Watson:

You're always slightly playing catch up, but honestly, it's the opportunity of a lifetime for people like us.

Lance Glinn:

And you bring up sort of that human touch, right? You want that connection. And we all, I'm sure have lived through it where we want to connect to a human and it's a process just to do that. And I think, and Rick, correct me if I'm wrong, but there will always sort of be that human touch in whatever insurance industry that you're in, whether it's specialty, whether it's mortgage, it's that human touch that the insurance industry needs that AI can't necessarily provide. Can you talk to me about why it's so important that Radian has that human touch and has that person to person connection when it comes to working with your customers?

Rick Thornberry:

Look, I'll just echo what Richard said. I think this is a huge step forward and I think we all embrace it. Obviously, you got to think through the governance and the unintended consequences of things like this that are changing fast. But I would say as an organization, we're embracing it. I think from what we've learned, and I'll just, if you think about the opportunity it presents, it presents an opportunity for us to reimagine a process that we couldn't three years ago.

Lance Glinn:

Yep.

Rick Thornberry:

Okay. And I think that's the fundamental change and our team is excited about that. So we're reimagining the customer experience no different than we're reimagining the underwriting process that we have. So you can enable speed and flexibility for a customer through questions, like you said. But the end of the day, I think of it like this, is that the human adds kind of the reasoning aspect of it that a customer needs to hear and so, but you can think about how you kind of determine when that human needs to enter the loop-

Lance Glinn:

Sure.

Rick Thornberry:

If you will. And so I think the technology is providing us a way to actually speed responses through kind of intelligent assessment of emails, through voicemails, through chats, whatever. We've all experienced it in other settings. That's kind of table stakes. Richard's point about documents, I've provided documents. What questions can you avoid asking the customer and taking up their time because you could take unstructured data out of those documents and-

Lance Glinn:

Sure.

Rick Thornberry:

Structure it and run the path. So I think what we're doing is we're trying to focus the customer interaction back to the meaningful, important kind of question back and forth service element, and that becomes more valuable to the customer because it's a higher and better use of their time. Okay. And I just went through a recent example where I was trying to cancel an account and I went through the chatbot and all-

Lance Glinn:

I feel like we've all been there.

Rick Thornberry:

Yeah.

Richard Watson:

Yeah.

Rick Thornberry:

And I was like, okay-

Lance Glinn:

With one thing or the other.

Rick Thornberry:

This could happen with one conversation with a human, right, but they're asking me and each question just continues to build on it. We want to avoid that. And AI kind of can jump that forward through a level of assessment and reasoning. So the consumer, in our case, we're both B2B businesses, right? And so from a B2B point of view, make sure that business customer has the opportunity to get to the question they really want to answer versus all the other kind of nonsense that happens before that.

Lance Glinn:

And you said that the human bring reason. I think the human also brings reliability.

Rick Thornberry:

Yeah, trust.

Lance Glinn:

And so, trust.

Richard Watson:

Do you think?

Lance Glinn:

Yeah. Well-

Richard Watson:

Sometimes question that.

Lance Glinn:

Sometimes, right? Sometimes I guess. But to your point, you said it, right? You're trying to cancel an account for whatever. You're trying to place an order for whatever. And it's just such a hassle sometimes to do it strictly through AI. And it's small things, it's big things, right? But to have AI be there, but then to have the human sort of at the end, or at least as part of the process to speed things along and make sure things happen the way you want them to happen, I think that's of the utmost importance. So gentlemen, as we begin to wrap up our conversation, Richard, I'll start with you. When you just imagine Inigo's future within the Radian family, what just excites you most about the growth opportunities and how Inigo could continue to push innovation and underwriting excellence?

Richard Watson:

I think for me, if you look at our big customers, take our top, I don't know, 100 customers. And if you look at where we sit in their list of insurance carriers, just rank it in terms of premium, let's say, we're probably like number 20 something.

Lance Glinn:

Sure.

Richard Watson:

We're not number three, we're not number 10. We've got so much potential to grow. Over time when the market is right and it's a sensible time to do it, we've got so much opportunity to do that. And the best bit has been the reaction the customers have given us when we've sat down in a really engaged way, playing back the information, going through a 1700-page deck of their information, how we look at it, how it compares to the market, et cetera. The reception there has been extraordinary. We'll get the risk managers into the office, they'll come and spend a week in our office going through how we rate their business, how we look at risk. That level of engagement and transparency I think is just not happening-

Lance Glinn:

Sure.

Richard Watson:

Elsewhere in our industry. I think the beauty of the partnership with Radian is this recognition that what we've done in the first five years is actually something that is valuable, it's respected, but it's got tons of runway.

Lance Glinn:

Sure.

Richard Watson:

And the fact that we can focus on the customer and doing that and not worry about company clashes or other... I think as a manager, you can waste so much time sorting out little spats between different parts of your company and how that region interacts with that region. And we have none of that.

Lance Glinn:

Yeah.

Richard Watson:

We have none of that complexity. It is just radically simple. That's a wonderful place to be. So yeah, I mean, I'm very excited about that prospect, that we've got this big market, genuinely know that we're doing something unique and we've got the backing of a fantastic company with fantastic shareholders and the commitment to go, let us get on with it.

Lance Glinn:

The work that's been done has been great, but the potential of what's still to come is still very significant for sure. And so Rick, as we close out the conversation, and as you look several years ahead, look at Radian now as a whole, how do you envision Radian's identity evolving now with Inigo in it as well as a truly diversified global multi-line insurer?

Rick Thornberry:

Yeah. Well, I think we had to do an acquisition like this to be able to have that future. Right. So I think we took the first step three days ago, two days ago, whatever day it was. But we took the first step. And I think when I look forward, right, and I think about the future of these two companies, I think what we're going to have an opportunity is to kind of leverage the benefit of both franchises.

Lance Glinn:

Sure.

Rick Thornberry:

Both the MI franchise to continue to do what it does well, Inigo to continue to do what it does well. I think to Richard's point, the opportunity and the green field that's still kind of out there for Inigo to be very selective, very disciplined, which is again, something I admire about the team, their ability to assess kind of risk adjusted returns in terms of how they think about that transaction from an insurance point of view, but the opportunity to grow alongside this mortgage insurance business that provides excess capital, performs at a high level. I think when you look forward, you're going to see Radian increasingly become defined by the diversification across several different specialty insurance products alongside this mortgage insurance. By the way, I think of mortgage insurance as just a specialty product. There couldn't be anything more special than mortgage insurance.

Lance Glinn:

Yeah.

Rick Thornberry:

So when you look at it over time, I think you'll see greater diversification across the product set, the insurance products set we offer with a global reach that creates a highly diversified business with really uncorrelated risk kind of going through different cycles that are also uncorrelated. And I think five years out, you should see Radian defined as that truly global, specialized, kind of fully diversified global specialty insurer that we aspire to be today. And I think we've taken that first step, but I am from the state of Missouri.

Lance Glinn:

Okay.

Rick Thornberry:

Okay. And that's the show me state. I was-

Lance Glinn:

Sure.

Rick Thornberry:

Explaining that to Richard the other day. And I think we have a bit of show me to kind of demonstrate that the combination is as incredible and as valuable as we think it is. And so that's what we're committed to go do.

Lance Glinn:

Absolutely. Well, gentlemen, I really appreciate the conversation. Thank you so much for joining us Inside the ICE House.

Richard Watson:

It's a pleasure.

Rick Thornberry:

My pleasure. Thank you.

Speaker 4:

That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen and follow us on X @icehousepodcast. From the New York Stock Exchange, we'll talk to you again next week inside The ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation have been offered to buy any security, or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.