MGIC Investment
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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1997

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ________________

Commission file number 1-10816

MGIC Investment Corporation
(Exact name of registrant as specified in its charter)

Wisconsin 39-1486475

(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)


MGIC Plaza, 250 East Kilbourn Avenue, Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code (414) 347-6480

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class: Common Stock, Par Value $1 Per Share

Name of Each Exchange
on Which Registered: New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:

Title of Class: None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes X No

State the aggregate market value of the voting stock held by non-
affiliates of the Registrant as of January 31, 1998: $6.2 billion.*

* Solely for purposes of computing such value and without thereby
admitting that such persons are affiliates of the Registrant, shares held
by The Northwestern Mutual Life Insurance Company and by directors and
executive officers of the Registrant are deemed to be held by affiliates
of the Registrant. Shares held are those shares beneficially owned for
purposes of Rule 13d-3 under the Securities Exchange Act of 1934.

Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of January 31, 1998: 113,867,817.

The following documents have been incorporated by reference in this
Form 10-K, as indicated:


Part and Item Number of
Form 10-K Into Which
Document Incorporated

1. Information from 1997 Annual Items 1 and 3 of Part I
Report to Shareholders (for Items 5 through 8 of Part II
Fiscal Year Ended December 31,
1997)

2. Proxy Statement for the 1998 Items 10 through 13 of Part III
Annual Meeting of Shareholders


Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
Part I


Item 1. Business.

A. General

MGIC Investment Corporation (the "Company") is a holding company
which, through its indirect wholly owned subsidiary, Mortgage Guaranty
Insurance Corporation ("MGIC"), is the leading provider of private
mortgage insurance coverage in the United States to mortgage bankers,
savings institutions, commercial banks, mortgage brokers, credit unions
and other lenders. Private mortgage insurance covers residential first
mortgage loans and expands home ownership opportunities by enabling people
to purchase homes with less than 20% down payments. If the home owner
defaults, private mortgage insurance reduces and, in some instances,
eliminates the loss to the insured institution. Private mortgage
insurance also facilitates the sale of low down payment mortgage loans in
the secondary mortgage market, principally to the Federal Home Loan
Mortgage Corporation ("Freddie Mac") and the Federal National Mortgage
Association ("Fannie Mae"). In addition to mortgage insurance, the
Company, through other subsidiaries, provides various underwriting and
contract services related to home mortgage lending.

MGIC is licensed in all 50 states of the United States, the District
of Columbia and Puerto Rico. The Company is a Wisconsin corporation. Its
principal office is located at MGIC Plaza, 250 East Kilbourn Avenue,
Milwaukee, Wisconsin 53202 (telephone number (414) 347-6480).

The following is a "Safe Harbor" Statement under the Private
Securities Litigation Reform Act of 1995, which applies to all statements
in this Form 10-K, including its Exhibits, which are not historical facts
and to all oral statements that the Company may make from time to time
which are not historical facts (such written and oral statements are
herein referred to as "forward looking statements"):

Actual results may differ materially from those
contemplated by the forward looking statements. These forward
looking statements involve risks and uncertainties, including
but not limited to, the following risks:

- that demand for housing generally or in MGIC's market
segment may be adversely affected by changes in interest
rates, adverse economic conditions, or other reasons;

- that government housing policy may change, including changes in
Federal Housing Administration ("FHA") loan limits, and changes
in the statutory charters and coverage requirements of Freddie
Mac and Fannie Mae;

- that MGIC's market share of new insurance written or the
amount of new insurance written may be adversely affected
as a result of factors affecting housing demand, government
housing policy and Freddie Mac and Fannie Mae discussed
above; or as a result of underwriting changes by the
Company; actions taken by the Company's competitors,
including their underwriting criteria, pricing or products
offered; decisions by lenders to originate low down payment
loans using substitutes for mortgage insurance , including
self-insurance, or to the extent legally permissible, to
provide insurance themselves; or for other reasons;

- that cancellations may increase and persistency may decrease due
to refinancings, changes in Freddie Mac or Fannie Mae
cancellation policies or legislation regarding mortgage
insurance cancellation, or due to other factors; and

- that delinquencies, incurred losses or paid losses may increase
as a result of adverse changes in regional or national economies
which affect borrowers' incomes or housing values.

The foregoing "Safe Harbor" Statement also identifies certain material
risks of the Company's business. Investors are also directed to other
risks discussed in documents filed by the Company with the Securities and
Exchange Commission.

B. The MGIC Book

Types of Product

There are two principal types of private mortgage insurance:
"primary" and "pool."

Primary Insurance. Primary insurance provides mortgage default
protection on individual loans and covers unpaid loan principal,
delinquent interest and certain expenses associated with the default and
subsequent foreclosure (collectively, the "claim amount"). The insurer
generally pays the coverage percentage of the claim amount specified in
the primary policy, but has the option to pay 100% of the claim amount and
acquire title to the property. The claim amount averages about 115% of
the unpaid principal balance of the loan. Primary insurance generally
applies to owner occupied, first mortgage loans on one-to-four family
homes, including condominiums. Primary coverage can be used on any type
of residential mortgage loan instrument approved by the mortgage insurer.
References in this document to amounts of insurance written or in force,
risk written or in force and other historical data related to MGIC's
insurance refer only to direct (before giving effect to reinsurance)
primary insurance, unless otherwise indicated.

The following table shows direct primary insurance in force and net
primary risk in force (the risk, determined by the coverage percentage,
which is retained after giving effect to reinsurance) for insurance that
has been written by MGIC (the "MGIC Book") as of the dates indicated:

Primary Insurance and Risk In Force

December 31,
1997 1996 1995 1994 1993
(In millions of dollars)
Direct Primary
Insurance In Force . $138,497 $131,397 $120,341 $104,416 $85,848

Net Primary
Risk In Force . . . . 31,580 28,565 24,593 19,664* 13,971

____________________
* Reflects the reassumption in 1994 of mortgage insurance previously
reinsured. See "Reinsurance" below.


The coverage percentage provided by MGIC is determined by the lender,
usually in order to comply with Freddie Mac and Fannie Mae requirements to
reduce loss exposure on loans purchased by them to a designated percentage
of the home's value. Until 1995, Freddie Mac and Fannie Mae had generally
required that loss exposure be reduced to 75% of the home's value.
Effective in the first quarter of 1995, Freddie Mac and Fannie Mae changed
their coverage requirements for most new loans as follows:

<TABLE>

Freddie Mac and Fannie Mae Coverages

<CAPTION>

Thirty Year and Certain Fixed Rate, Fully Amortizing Mortgage Loans with Term of
Other Mortgage Loans 20 years or less
Loan-to-Value New Previous Loan-to-Value New Previous
Ratio: Coverage Coverage Ratio: Coverage Coverage
<S> <C> <C> <C> <C> <C>
90.01 - 95.00% 30% 25%* 90.01 - 95.00% 25% 25%*
(up to 97% for Fannie Mae)
85.01 - 90.00% 25% 17% 85.01 - 90.00% 12% 17%
80.01 - 85.00% 12% 12% 80.01 - 85.00% 6% 12%

____________________
* Prior to 1995, Freddie Mac and Fannie Mae had increased coverage from
22% to 25%.

</TABLE>

As a result of these deeper coverage requirements, coverage
percentages on new insurance written in 1995-1997 were higher than
coverages on loans insured in 1994 and prior years. The following table
shows, by loan-to-value ("LTV") and coverage categories, new insurance
written during the periods indicated:


Coverage Categories as a Percentage of New Insurance Written

Year Ended December 31,
LTV and
Coverage 1997 1996 1995 1994

95% LTV/ 38.7% 38.4% 34.1% 1.5%
30% Coverage

90% LTV/ 39.1% 38.9% 33.0% 3.5%
25% Coverage

MGIC charges higher premium rates for higher coverages, and the
deeper Freddie Mac and Fannie Mae coverage requirements have resulted in
higher premiums charged on similar types of loans with the same
characteristics (such as LTV and loan type) affecting the premium rate.
While MGIC believes these deeper coverage requirements have had no
significant impact on underwriting expenses or frequency of default, they
have resulted in an increase in MGIC's average claim amount on books of
business written in 1995 and thereafter. Because reserves for losses are
only established by MGIC for loans in default and relatively few defaults
occur in the early years of a book of business, MGIC receives increased
premium from deeper coverage before any higher losses may be incurred
resulting from that deeper coverage. MGIC uses a pricing methodology for
these coverages similar to other types of coverage. However, there can be
no assurance that the higher premium rates adequately reflect the risks
associated with increased coverages. In addition, such higher premium
rates may make government insurance programs, particularly programs of the
FHA, more competitive. See "Sales and Marketing and Competition,
Competition" and "Regulation,Indirect Regulation" below. There can be no
assurance that the deeper coverage requirements of Freddie Mac and
Fannie Mae will remain in effect.

Mortgage insurance coverage cannot be terminated by the insurer,
except for non-payment of premium, and remains renewable at the option of
the insured lender, generally at the renewal rate fixed when the loan was
initially insured. Lenders may cancel insurance at any time at their
option or because of mortgage repayment, which may be accelerated because
of the refinancing of mortgages. In the case of a loan purchased by
Freddie Mac or Fannie Mae, a borrower meeting certain conditions may
require the mortgage servicer to cancel insurance upon the borrower's
request when the principal balance of the loan is 80% or less of the
home's current value and in certain circumstances when such principal
balance is 80% or less of the home's original value.

Some states require that mortgage servicers periodically notify
borrowers of the circumstances in which they may request a mortgage
servicer to cancel insurance and some states allow the borrower to require
the mortgage servicer to cancel insurance under certain circumstances or
require the mortgage servicer to cancel insurance automatically in certain
circumstance. Bills have been introduced and are pending in a number of
other states for such purposes. In 1997, the United States Senate and the
House of Representatives both passed differing bills that would have
required private mortgage insurance to be cancelled in certain circumstances
and that would have required mortgage servicers to provide certain notices
to borrowers regarding cancellation of mortgage insurance. Neither of these
bills became law. The Company cannot predict whether federal law
governing private mortgage insurance cancellation will be enacted.

Coverage tends to continue in areas experiencing economic contraction
and housing price depreciation. The persistency of coverage in such areas
coupled with cancellation of coverage in areas experiencing economic
expansion and housing price appreciation can increase the percentage of
the insurer's portfolio comprised of loans in economically weak areas.
This development can also occur during periods of heavy mortgage
refinancing because refinanced loans in areas of economic expansion
experiencing property value appreciation are less likely to require
mortgage insurance at the time of refinancing, while refinanced loans in
economically weak areas not experiencing property value appreciation are
more likely to require mortgage insurance at the time of refinancing or
not qualify for refinancing at all and, thus, remain subject to the
mortgage insurance coverage.

When a borrower refinances an MGIC-insured mortgage loan by paying it
off in full with the proceeds of a new mortgage, the insurance on that
existing mortgage is cancelled, and insurance on the new mortgage is
considered to be new primary insurance written. Therefore, continuation
of MGIC's coverage from a refinanced loan to a new loan results in both a
cancellation of insurance and new insurance written. The percentage of
primary risk written with respect to loans representing refinances was
12.2% in 1997, as compared to 13.7% in 1996. Refinance loans represented
13.8%, 9.7%, 9.9% and 15.7% of primary risk written during the successive
quarters of 1997.

In addition to varying with the coverage percentage, MGIC's premium
rates vary depending upon the perceived risk of a claim on the insured
loan and, thus, take into account the LTV, the loan type (fixed payment
versus non-fixed payment)and mortgage term. Premium rates cannot be
changed after the issuance of coverage. Because the Company believes that
over the long term each region of the United States is subject to similar
factors affecting risk of loss on insurance written, MGIC generally
utilizes a nationally based, rather than a regional or local, premium rate
policy.

Mortgage lenders usually require mortgage borrowers to fund the
mortgage insurance premiums, which the lenders pay to the mortgage
insurer. MGIC has three basic types of premium payment plans: monthly,
annual and single premium plans. During 1997 and 1996, these premium plans
represented the following dollar amounts and percentages of new insurance
written:

<TABLE>

Premium Plans as Percentages of
New Insurance Written

<CAPTION>
1997 1996
(In millions of dollars)
<S> <C> <C> <C> <C>
Monthly premium plan $29,914 92.8% $29,138 88.9%
Annual premium plan 1,951 6.0 3,333 10.2
Single premium plan 385 1.2 285 0.9
------- ------ ------- ------
Total $32,250 100.0% $32,756 100.0%
======= ====== ======= ======
</TABLE>


Under the monthly premium plan, a monthly premium payment is made to
MGIC to provide only one month of coverage, rather than one year of
coverage provided by the annual premium plan. To offset the reduced
initial cash flow, the annualized premium rates for the monthly premium
plan are higher than the premium rates for the annual plan for comparable
loans.

Under the annual premium plan, the initial premium is paid to MGIC in
advance, and earned over the next twelve months of coverage, with annual
renewal premiums paid in advance thereafter and earned over the subsequent
twelve months of coverage. The annual premiums can be paid with either a
higher premium rate for the initial year of coverage and lower premium
rates for the renewal years, or with premium rates which are equal (level)
for the initial year and subsequent renewal years.

Under the single premium plan, a single payment is made to MGIC,
covering a specified term exceeding 12 months, which can be either non-
refundable or refundable if the coverage is cancelled by the insured
lender.

Pool Insurance. Pool insurance is generally used as an additional
"credit enhancement" for certain secondary market mortgage transactions.
Pool insurance generally covers the loss on a defaulted mortgage loan
which exceeds the claim payment under the primary coverage, if primary
insurance is required on that mortgage loan, as well as the total loss on
a defaulted mortgage loan which did not require primary insurance, in each
case up to a stated aggregate loss limit.

During the first quarter of 1997, the Company began writing pool
insurance generally covering fixed-rate, 30-year mortgage loans delivered
to Freddie Mac and Fannie Mae ("agency pool insurance"). The aggregate
loss limit on agency pool insurance generally does not exceed 1% of the
aggregate original principal balance of the mortgage loans in the pool.
New pool risk written during the twelve months ended December 31, 1997 was
$394 million, which was virtually all agency pool insurance, with the
remaining risk written associated with loans insured under state housing
finance programs. Net MGIC Book pool risk in force at December 31, 1997
was $530 million compared to $181 million at December 31, 1996. In
October 1997, the California Commissioner of Insurance was asked by a
California legislator to review the legality of arrangements involving
agency pool insurance. In a letter received by MGIC in January 1998, the
U.S. Department of Housing and Urban Development ("HUD") wrote to MGIC
seeking an analysis of MGIC's agency pool insurance transactions under the
Real Estate Settlement Procedures Act of 1974 ("RESPA") which, in general,
prohibits any person from giving or receiving any "thing of value"
pursuant to an agreement or understanding to refer real estate settlement
services, which include mortgage insurance. In February 1998, MGIC
provided HUD with MGIC's analysis, which set forth MGIC's opinion that
MGIC's agency pool transactions comply with RESPA. There can be no
assurance that HUD will agree with MGIC's analysis. The Company
understands that in March 1998, HUD wrote to the other private mortgage
insurers and offered them an opportunity to submit their views in writing
on agency pool insurance under RESPA.

Customers

Originators of residential mortgage loans such as mortgage bankers,
savings institutions, commercial banks, mortgage brokers, credit unions
and other lenders (e.g., financial, insurance and service companies) are
the customers of MGIC. To obtain primary insurance from MGIC, a mortgage
lender must first apply for and receive a mortgage guaranty master policy
("Master Policy") from MGIC. MGIC had approximately 10,200 master
policyholders at December 31, 1997 (not including policies issued to
branches and affiliates of large lenders). In 1997, MGIC issued coverage
on mortgage loans for approximately 4,400 of its master policyholders.
MGIC's top 10 customers generated 27.0% of its new insurance written in
1997, compared to 20.0% in 1996.

Sales and Marketing and Competition

Sales and Marketing. MGIC sells its insurance products through its
own employees, located throughout the United States. At December 31,
1997, MGIC had 30 underwriting service centers located in 21 states and in
Puerto Rico.

Competition. MGIC and other private mortgage insurers compete
directly with federal and state governmental and quasi-governmental
agencies, principally the FHA and, to a lesser degree, the Veterans
Administration ("VA"). These agencies sponsor government-backed mortgage
insurance programs, which during 1997 accounted for approximately 46%
(compared to approximately 45% during 1996) of the total low down payment
residential mortgages which were subject to governmental or private
mortgage insurance. See "Regulation - Indirect Regulation" below.

In addition to competition from federal agencies, MGIC and other
private mortgage insurers face competition from state-supported mortgage
insurance funds in several states, including California, Illinois and New
York. From time to time, other state legislatures and agencies consider
expansions of the authority of their state governments to insure
residential mortgages.

MGIC and other mortgage insurers also compete with transactions
structured to avoid mortgage insurance on low down payment mortgage loans.
Such transactions include self-insuring and originating loans comprised of
both a first and a second mortgage, with the LTV ratio of the first
mortgage below what investors require for mortgage insurance, instead of
originating a loan in which the first mortgage covers the entire borrowed
amount. Captive mortgage reinsurance and similar transactions also result
in mortgage originators receiving a portion of the premium and the risk.

The private mortgage insurance industry consists of nine active
mortgage insurers (including a joint venture in which a mortgage insurer
is one of the joint venturers). During 1997 and 1996, MGIC was the
largest private mortgage insurer based on new primary insurance written
and at December 31, 1997, MGIC also had the largest book of direct primary
insurance in force.

The private mortgage insurance industry is highly competitive. The
Company believes MGIC competes with other private mortgage insurers
principally on the basis of the strength of its management team and field
organization; its ability to meet lender needs by providing underwriting
risk management, affordable housing, loss mitigation, capital markets and
training support; effective use of technology and innovation in the
delivery and servicing of MGIC's insurance products; and structured
programs involving agency pool insurance, captive reinsurance and other
programs in which insurance is offered on special terms for certain loans
or groups of loans. The Company believes MGIC's additional competitive
strengths, compared to other private insurers, are its customer
relationships, name recognition and reputation.

Certain private mortgage insurers compete by offering lower premium
rates than other companies, including MGIC, either in general or with
respect to particular classes of business. MGIC on a case-by-case basis
will adjust premium rates, generally depending on the risk
characteristics, loss performance or class of business of the loans to be
insured, or the costs associated with doing such business.

Two other mortgage insurers, General Electric Mortgage Insurance
Corporation and United Guaranty Residential Insurance Company,
an affiliate of American International Group, Inc., have higher claims-
paying ability ratings than MGIC, principally based on having definitive
capital support agreements from affiliated companies.

Risk Management

Risk Management Approach. MGIC evaluates four major elements of
risk:

- Individual Loan and Borrower. Except to the extent its delegated
underwriting program is being utilized as described below, MGIC
evaluates insurance applications based on its analysis of the
borrower's ability to repay the mortgage loan and the
characteristics and value of the property. The analysis of the
borrower includes reviewing the borrower's housing and total debt
ratios as well as the borrower's FICO credit score, as reported by
credit reporting agencies. In the case of delegated underwriting,
compliance with program parameters is monitored by periodic audits
of delegated business.

- Geographic Market. MGIC places significant emphasis on the
condition of the housing markets around the nation in determining
its underwriting policies.

- Product. The type of mortgage instrument that the borrower selects
and the purpose of the loan are important factors in MGIC's
analysis of mortgage default risk. MGIC analyzes four general
characteristics of the product to quantify this risk evaluation:
(i) LTV ratio; (ii) type of loan instrument; (iii) type of
property; and (iv) purpose of the loan. In addition to its
underwriting guidelines (as referred to below), pricing is MGIC's
principal method used to manage these risks. Loans with higher LTV
ratios generally have a higher premium, as do instruments such as
adjustable rate mortgage loans ("ARMs") and loans with a maturity
longer than fifteen years.

- Mortgage Lender. MGIC evaluates from time to time its major
customers and the performance of their business which MGIC has
insured.

Based on historical performance, the Company believes that the claim
incidence for loans with LTVs in excess of 90% but not more than 95% ("95%
LTV loans") is substantially higher than for loans with LTV ratios of 90%
or less; for ARMs during a prolonged period of rising interest rates would
be substantially higher than for fixed rate loans; for loans in which the
original loan amount exceeds $200,000 is higher than for loans where such
amount is $200,000 or less; and for loans with FICO credit scores below
620 is higher than for loans with FICO credit scores of 620 and above.
While there is no meaningful data on claim incidence for loans with LTVs
in excess of 95% ("97% LTV loans") because this product has only been
recently offered by the industry, the Company anticipates that claim
incidence on 97% LTV loans will be higher than on 95% LTV loans. MGIC
charges higher premium rates for insuring 95% and 97% LTV loans and ARMs.
However, there can be no assurance that such higher rates adequately
reflect the increased risk associated with those types of loans,
particularly in a period of economic recession.

There are also other types of loan characteristics relating to the
individual loan or borrower which affect the risk potential for a loan.
The presence of a number of higher-risk characteristics in a loan
materially increases the likelihood of a claim on such a loan unless there
are other characteristics to lower the risk.

Underwriting Process. To obtain primary insurance on a specific
mortgage loan, a master policyholder typically submits an application to
an MGIC underwriting service center, supported by various documents, if
required by MGIC. MGIC utilizes national underwriting guidelines to
evaluate the potential risk of default on mortgage loans submitted for
insurance coverage. These guidelines generally are consistent with
Fannie Mae and Freddie Mac underwriting guidelines and take into account
the applicable premium rates charged by MGIC and the loss experience of
the private mortgage insurance industry, as well as the initiatives to
expand home ownership opportunities undertaken by Fannie Mae and
Freddie Mac. MGIC's underwriters have discretionary authority to insure
loans which deviate in one or more respects from MGIC's underwriting
guidelines. In most such cases, offsetting underwriting strengths must be
identified.

In order to react to local or regional economic conditions, MGIC has
also developed for use by its underwriting staff certain modified
guidelines which attempt to address particular regional or local market
developments. These "special market underwriting guidelines" are updated
from time to time and deviate in varying degrees from MGIC's national
guidelines based on MGIC's analysis of area housing markets and related
economic indicators and conditions. The special market underwriting
guidelines are more liberal than the published national guidelines in some
markets, but in other markets are more restrictive.

To assist its staff of underwriters, MGIC utilizes a computer-
assisted underwriting system which analyzes and approves certain mortgage
insurance applications based on MGIC's underwriting standards, but without
personal underwriter intervention, thereby allowing MGIC's underwriting
staff to devote additional attention to evaluating more difficult
underwriting decisions. MGIC audits a representative sample of
applications approved by the system.

Delegated Underwriting. Delegated underwriting is a program whereby
approved lenders are allowed to commit MGIC to insure loans utilizing
their MGIC-approved underwriting guidelines and underwriting evaluation.
While MGIC does not underwrite on a case-by-case basis the credit of the
borrower, the value of the property, or other factors which it normally
considers in its underwriting decision, it does audit on a regular basis a
sample of the loans insured.

At December 31, 1997, MGIC's delegated underwriting program involved
664 lenders, including all of MGIC's top twenty customers. Loans insured
under MGIC's delegated underwriting program accounted for approximately
32.5% of MGIC's total risk in force at December 31, 1997. The percentage
of new risk written by delegated underwriters decreased to 36.8% in 1997
from 41.0% in 1996 and 38.2% in 1995. The Company believes that the
decrease in 1997 is attributable to MGIC's introduction in mid-1996 of a
program under which MGIC approves a loan for insurance if the borrower
satisfies certain minimum criteria for credit scores and debt ratios. The
performance of loans insured under the delegated underwriting program has
been comparable to MGIC's non-delegated business, although performance of
that program has not yet been tested in a period of severe economic
stress.

Affordable Housing. In recent years, MGIC has made a continued
commitment to insure residential mortgages secured by properties owned and
occupied by low- and moderate-income first time homebuyer borrowers, or by
first time homebuyer borrowers who reside in areas targeted for community
reinvestment or redevelopment ("affordable housing" loans). The
percentage of affordable housing loans under this definition was 16.6% of
new risk written in 1997, as compared to 17.9% in 1996. The Company
believes that affordable housing loans have higher risks than its other
insured business. Therefore, MGIC has instituted various programs seeking
to mitigate the higher risk characteristics of such loans. However, while
early in the life of such loans, on the basis of the limited information
available, the Company believes that the default rate and claims rate on
such loans will be higher than the average default rate on the MGIC Book.

Reinsurance

General. In each year from 1985 through 1993, MGIC had ceded certain
percentages of its new insurance written under quota share reinsurance
agreements with several international reinsurers. Effective January 1,
1994, MGIC reassumed from its principal reinsurer MGIC's mortgage insurance
written in 1985 through 1993 that had been ceded to this reinsurer and
discontinued quota share reinsurance for new insurance written. At
December 31, 1997, approximately 2% of MGIC's insurance in force was
reinsured. Reinsuring against possible loan losses does not discharge
MGIC from liability to a policyholder; however, the reinsurer agrees to
indemnify MGIC for the reinsurer's share of losses incurred.

Captive Mortgage Reinsurance. MGIC's products include captive
mortgage reinsurance in which an affiliate of a lender reinsures a portion
of the risk on loans originated or purchased by the lender which have MGIC
primary insurance. The amount of premium and risk ceded to captive
reinsurers by MGIC in 1997 was not material but is expected to increase in
1998 as additional captive reinsurance arrangements are implemented. In an
August 1997 letter, HUD set forth tests to determine whether, in HUD's
view, captive mortgage reinsurance programs comply with RESPA. While the
Company believes MGIC's captive mortgage reinsurance program meets HUD's
tests, certain of the tests involve complex judgments regarding premium
and risk ceded. There can be no assurance that MGIC's captive program
complies with RESPA.

Past Industry Losses; Defaults; and Claims

Past Industry Losses. The private mortgage insurance industry,
including the WMAC Book (see "The WMAC Book" below), experienced
substantial unanticipated incurred losses in the mid-to-late 1980s. From
the 1970s until 1981, rising home prices in the United States generally
led to profitable insurance underwriting results for the industry and
caused private mortgage insurers to emphasize market share. To maximize
market share, until the mid-1980s, private mortgage insurers employed
liberal underwriting practices, and charged premium rates which, in
retrospect, generally did not adequately reflect the risk assumed
(particularly on pool insurance). These industry practices compounded the
losses which resulted from changing economic and market conditions which
occurred during the early and mid-1980s, including (i) severe regional
recessions and attendant declines in property values in the nation's
energy producing states; (ii) the development by lenders of new mortgage
products to defer the impact on home buyers of double digit mortgage
interest rates; and (iii) changes in federal income tax incentives which
initially encouraged the growth of investment in non-owner occupied
properties.

Defaults. The claim cycle on private mortgage insurance begins with
the insurer's receipt of notification of a default on an insured loan from
the lender. Lenders are required to notify MGIC of defaults within 130
days after the initial default, although most lenders do so earlier. The
incidence of default is affected by a variety of factors, including the
level of borrower income growth, unemployment, divorce and illness, the
level of interest rates and general borrower creditworthiness. Defaults
that are not cured result in a claim to MGIC. Defaults may be cured by
the borrower bringing current the delinquent loan payments or by a sale of
the property and the satisfaction of all amounts due under the mortgage.

The following table shows the number of primary and pool loans
insured in the MGIC Book, the related number of loans in default and the
percentage of loans in default (default rate) as of the dates indicated:

Default Statistics for the MGIC Book

<TABLE>
<CAPTION>
December 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
PRIMARY INSURANCE
Insured loans in force . . . . . 1,342,976 1,299,038 1,219,304 1,080,882 921,259
Loans in default . . . . . . . . 28,493 25,034 19,980 15,439 13,658
Percentage of loans in default
(default rate) . . . . . . . . . 2.12% 1.93% 1.64% 1.43% 1.48%

POOL INSURANCE
Insured loans in force . . . . . 374,378 19,123 20,427 23,242 30,890
Loans in default . . . . . . . . 2,174 855 1,053 1,097 1,419
Percentage of loans in default
(default rate) . . . . . . . . . 0.58% 4.47% 5.15% 4.72% 4.59%

</TABLE>

The default rate for primary loans has increased since 1994 due to an
increase in the risk profile of loans insured in late 1994 and the first
half of 1995 and the continued maturation of MGIC's insurance in force.
The number of pool insurance loans in force increased at December 31, 1997
as a result of agency pool insurance writings, and the number of pool
insurance loans in default at that date increased due to the increase in
pool insurance in force. The percentage of pool insurance loans in
default decreased at December 31, 1997 as a result of the increase in pool
insurance in force.

Regions of the United States may experience different default rates
due to varying localized economic conditions from year to year. The
following table shows the percentage of the MGIC Book's primary loans in
default by MGIC region at the dates indicated:


Default Rates for Primary Insurance By Region*

Dec. 31 Dec. 31, Dec. 31,
1997 1996 1995

MGIC REGION:
New England . . . . . . . 1.89% 2.09% 2.17%
Northeast . . . . . . . . 3.03 2.74 2.49
Mid-Atlantic . . . . . . 2.23 1.96 1.64
Southeast . . . . . . . . 2.13 1.83 1.46
Great Lakes . . . . . . . 1.75 1.57 1.21
North Central . . . . . . 1.72 1.49 1.21
South Central . . . . . . 1.86 1.56 1.27
Plains . . . . . . . . . 1.27 0.97 0.75
Pacific . . . . . . . . . 2.69 2.70 2.43

National . . . . . . . 2.12% 1.93% 1.64%

____________________
* The default rate is affected by both the number of loans in default
at any given date as well as the number of insured loans in force at
such date.


Claims. Claims result from defaults which are not cured. Whether a
claim results from an uncured default principally depends on the
borrower's equity in the home at the time of default and the borrower's
(or the lender's) ability to sell the home for an amount sufficient to
satisfy all amounts due under the mortgage. Claims are affected by
various factors, including local housing prices and employment levels, and
interest rates.

Under the terms of the Master Policy, the lender is required to file
a claim for primary insurance with MGIC within 60 days after it has
acquired good and marketable title to the underlying property through
foreclosure. Depending on the applicable state foreclosure law, an
average of about 12 months transpires from the date of default to payment
of a claim on an uncured default. The claim amount generally averages
about 115% of the unpaid principal amount of the loan.

Within 60 days after the claim has been filed, MGIC has the option of
either (i) paying the coverage percentage specified for that loan, with
the insured retaining title to the underlying property and receiving all
proceeds from the eventual sale of the property or (ii) paying 100% of the
claim amount in exchange for the lender's conveyance of good and
marketable title to the property to MGIC, with MGIC then selling the
property for its own account.

Claim activity is not evenly spread throughout the coverage period of
a book of primary business. Relatively few claims are received during the
first two years following issuance of coverage on a loan. This is
followed by a period of rising claims which, based on industry experience,
has historically reached its highest level in the third through fifth
years after the year of loan origination. Thereafter, the number of
claims received has historically declined at a gradual rate, although the
rate of decline can be affected by conditions in the economy, including
lower housing price appreciation. There can be no assurance that this
historical pattern of claims will continue in the future. Moreover, when
a loan is refinanced, because the new loan replaces, and is a continuation
of, an earlier loan, the pattern of claims frequency for that new loan may
be different from the historical pattern of other loans. As of
December 31, 1997, 56.5% of the MGIC Book primary insurance in force had
been written during 1995, 1996, and 1997, although a portion of such
insurance arose from the refinancing of earlier originations.

In addition to the increasing level of claim activity arising from
the maturing of the MGIC Book, another important factor affecting MGIC
Book losses is the amount of the average claim paid, which is generally
referred to as claim severity. The main determinants of claim severity
are the amount of the mortgage loan and coverage percentage on the loan.
The average claim severity on the MGIC Book primary insurance was $21,669
for 1997 as compared to $21,817 in 1996. Although prior to 1995 the
coverage percentage remained relatively constant on the MGIC Book, the
Company anticipates that MGIC Book claim severity will likely increase
over the long term due to the higher coverage percentages generally
written beginning in 1995 as required by Fannie Mae and Freddie Mac.

Loss Reserves

A significant period of time may elapse between the occurrence of the
borrower's default on a mortgage payment (the event triggering a potential
future claim payment by MGIC), the reporting of such default to MGIC and
the eventual payment of the claim related to such uncured default. To
recognize the liability for unpaid losses related to outstanding reported
defaults (known as the default inventory), the Company (similar to other
private mortgage insurers) establishes loss reserves, representing the
estimated percentage of defaults which will ultimately result in a claim
(known as the claim rate), and estimates of the severity of each claim
which will arise from the defaults included in the default inventory. In
accordance with industry accounting practices, the Company does not
establish loss reserves for future claims on insured loans which are not
currently in default.

The Company also establishes reserves to provide for the estimated
costs of settling claims, including legal and other fees, and general
expenses of administering the claims settlement process ("loss adjustment
expenses"), and for losses and loss adjustment expenses from defaults
which have occurred, but which have not yet been reported to the insurer.

The Company's reserving process is based upon the assumption that
past experience, adjusted for the anticipated effect of current economic
conditions and projected future economic trends, provides a reasonable
basis for estimating future events. However, estimation of loss reserves
is a difficult process, especially in light of the rapidly changing
economic conditions over the past few years in certain regions of the
United States. In addition, economic conditions that have affected the
development of the loss reserves in the past may not necessarily affect
development patterns in the future, in either a similar manner or degree.

For a further description of loss reserves, see Note 6 to the
consolidated financial statements of the Company, included in Exhibit 13
to this Annual Report on Form 10-K.

Geographic Dispersion

The following table reflects the percentage of primary risk in force
in the top 10 states and top 10 metropolitan statistical areas ("MSAs")
for the MGIC Book at December 31, 1997:


Dispersion of Primary Risk in Force

Top 10 States Top 10 MSAs

1. California 13.1% 1. Chicago 4.3%
2. Texas 6.7 2. Boston 3.6
3. Illinois 5.7 3. Los Angeles 3.4
4. Michigan 5.5 4. Washington, DC 3.1
5. New York 4.5 5. Atlanta 2.4
6. Ohio 4.4 6. Detroit 2.2
7. Florida 4.3 7. Philadelphia 2.1
8. Pennsylvania 4.0 8. Dallas 1.8
9. Massachusetts 3.7 9. Orange County 1.7
10. New Jersey 3.5 10. Seattle 1.6
----- -----
Total 55.4% Total 26.2%
===== =====


The percentages shown above for various MSAs can be affected by
changes, from time to time, in the federal government's definition of an
MSA.

Insurance in Force by Policy Year

The following table sets forth the dispersion of MGIC's primary
insurance in force as of December 31, 1997, by year(s) of policy
origination since MGIC began operations in 1985:

Primary Insurance In Force by Policy Year

Primary
Insurance in Percent of
Policy Year Force Total
(In millions of dollars)

1985-1992 $ 21,111 15.3%
1993 20,030 14.5
1994 19,053 13.7
1995 21,800 15.7
1996 27,684 20.0
1997 28,819 20.8
-------- -----
Total $138,497 100.0%
======== =====


Product Characteristics of Risk in Force

At December 31, 1997 and 1996, 98.2% and 99.2%, respectively, of
MGIC's risk in force was primary insurance and the remaining risk in force
was pool insurance. The following table reflects at the dates indicated
the (i) total dollar amount of primary risk in force for the MGIC Book and
(ii) percentage of such primary risk in force (as determined on the basis
of information available on the date of mortgage origination) by the
categories indicated.

Characteristics of Primary Risk in Force

December 31, December 31,
1997 1996

Direct Risk in Force (Dollars
in Millions . . . . . . . . . . . . $32,175 $29,308

Lender Concentration:
Top 10 lenders . . . . . . . . . . . 20.5% 17.9%
Top 20 lenders . . . . . . . . . . . 31.0% 28.1%

LTV:(1)
95s(2) . . . . . . . . . . . . . . . 46.6% 43.5%
90s(3) . . . . . . . . . . . . . . . 53.2 56.2
80s . . . . . . . . . . . . . . . . . 0.2 0.3
-------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0%
======== ========
Loan Type:
Fixed(4) . . . . . . . . . . . . . . 73.6% 71.5%
ARM(5) . . . . . . . . . . . . . . . 23.4 25.0
Balloon(6) . . . . . . . . . . . . . 2.9 3.4
Other . . . . . . . . . . . . . . . . 0.1 0.1
-------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0%
======== ========

Original Insured Loan Amount:
$200,000 and less . . . . . . . . . 87.0% 87.8%
Over $200,000 . . . . . . . . . . . 13.0 12.2
-------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0%
======== ========
Mortgage Term:
15-years and under . . . . . . . . . 4.4% 5.3%
Over 15 years . . . . . . . . . . . . 95.6 94.7
-------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0%
======== ========
Property Type:
Single-family(7) . . . . . . . . . . 93.6% 93.4%
Condominium . . . . . . . . . . . . . 6.0 6.1
Other(8) . . . . . . . . . . . . . . 0.4 0.5
-------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0%
======== ========
Occupancy Status:
Primary residence . . . . . . . . . . 98.6% 99.0%
Second home . . . . . . . . . . . . . 1.0 0.8
Non-owner occupied . . . . . . . . . 0.4 0.2
-------- --------
Total . . . . . . . . . . . . . . . . 100.0% 100.0%
======== ========
____________________

(1) Loan-to-value represents the ratio (expressed as a percentage) of the
dollar amount of the mortgage loan to the value of the property at
the time the loan became insured. They are identified as in excess
of 90% LTV ("95s"); in excess of 80% LTV and up to 90% LTV ("90s");
and equal to or less than 80% LTV ("80s").
(2) Includes 97% LTV loans, which were 2.3% and 1.7%, respectively, of
primary risk in force at December 31, 1997 and 1996.
(3) MGIC includes in its classification of 90s, loans where the borrower
makes a down payment of 10% and finances the associated mortgage
insurance premium payment as part of the mortgage loan. At
December 31, 1997 and 1996, 3.2% and 3.7%, respectively, of the
primary risk in force consisted of these types of loans.
(4) Includes fixed rate mortgages with temporary buydowns (where in
effect, the applicable interest rate is typically reduced by one or
two percentage points during the first two years of the loan).
(5) Includes ARMs where payments adjust fully with interest rate
adjustments. Also includes ARMs with negative amortization, which at
December 31, 1997 and 1996, represented 2.1% and 2.2%, respectively,
of primary risk in force. As of December 31, 1997 and 1996, ARMs
with LTVs in excess of 90% represented 9.5% and 9.2%, respectively,
of primary risk in force.
(6) Balloon payment mortgages are loans with a maturity, typically five
to seven years, that is shorter than the loans' amortization period.
(7) Includes townhouse-style attached housing with fee simple ownership.
(8) Includes cooperatives and manufactured homes deemed to be real
estate.

C. The WMAC Book

In 1985, the Company acquired certain assets and businesses of
Wisconsin Mortgage Assurance Corporation ("WMAC") and WMAC's parent,
including the MGIC name and offices of WMAC, and hired substantially all
of WMAC's employees ("Acquisition"). WMAC retained substantially all of
its insurance in force, net of domestic reinsurance (the "WMAC Book" and
sometimes in other documents referred to as the "Old Book"). Effective as
of the time of the Acquisition, WMAC reinsured 100% of the WMAC Book with
several international reinsurers. One of the reinsurers of the WMAC Book
retroceded a 20% quota share of the WMAC Book to a subsidiary of the
Company. In subsequent transactions, MGIC assumed a portion of the
remaining 80% of such reinsurance. At December 31, 1997, MGIC reinsured
approximately 66% of the WMAC Book and had approximately $1.1 billion of
risk in force from the WMAC Book.

D. Other Business

The Company, through subsidiaries, provides various mortgage services
for the mortgage finance industry, such as contract underwriting, premium
reconciliation and claims administration for HUD and the Resolution Trust
Corporation, respectively, and secondary marketing of mortgage-related
assets. The Company also owns approximately 48% of Credit-Based Asset
Servicing and Securitization LLC and affiliated entities (collectively,
"C-BASS"). C-BASS, which began operations in mid-1996, is principally
engaged in the acquisition, sale and servicing of delinquent and other
residential mortgage assets. The revenues recognized from these mortgage
services operations, other non-insurance services and C-BASS represented
3.8% and 3.0% of the Company's consolidated revenues in 1997 and 1996,
respectively.

In 1997, the Company, through subsidiaries, began insuring second
mortgages, including home equity loans. New insurance written on second
mortgages in 1997 was immaterial.

E. Investment Portfolio

Policy and Strategy

Cash flow from the Company's investment portfolio represented
approximately 34% of its total cash flow from operations during 1997.
Approximately 90% of the Company's long-term investment portfolio is
managed by a subsidiary of The Northwestern Mutual Life Insurance Company,
although the Company maintains overall control of investment policy and
strategy. The Company maintains direct management of the remainder of its
investment portfolio.

The Company's current policies emphasize preservation of capital, as
well as total return. Therefore, the Company's investment portfolio
consists almost entirely of high-quality, fixed-income investments.
Liquidity is sought through diversification and investment in publicly
traded securities. The Company attempts to maintain a level of liquidity
commensurate with its perceived business outlook and the expected timing,
direction and degree of changes in interest rates. The Company's
investment policies in effect at December 31, 1997, limited investments in
the securities of a single issuer (other than the U.S. government and its
agencies) and generally did not permit purchasing fixed income securities
rated below "A."

At December 31, 1997, based on amortized cost value, approximately
98.3% of the Company's total fixed income investment portfolio was
invested in securities rated "A" or better, with 61.5% which were rated
"AAA" and 25.4% which were rated "AA," in each case by at least one
nationally recognized securities rating organization.

The Company's investment policies and strategies are subject to
change depending upon regulatory, economic and market conditions and the
existing or anticipated financial condition and operating requirements,
including the tax position, of the Company.

Investment Operations

At December 31, 1997, the consolidated book value (which is equal to
market value) of the Company's investment portfolio was approximately
$2.4 billion. At December 31, 1997, municipal securities represented
71.3% of the book value of the total investment portfolio. Securities due
within one year, within one to five years, within five to ten years, and
after ten years, represented 5.3%, 9.6%, 43.7% and 41.4%, respectively, of
the total book value of the Company's investment in debt securities. The
Company's net pre-tax investment income was $123.6 million for the year
ended December 31, 1997, representing an after-tax yield of 5.0% for the
year, a decline from 5.1% for 1996, resulting from a decline in the
average interest rate on investments in 1997 as compared to 1996.

For further information concerning investment operations, see Note 4
to the consolidated financial statements of the Company, included in
Exhibit 13 to this Annual Report on Form 10-K.

F. Regulation

Direct Regulation

The Company and its insurance subsidiaries, including MGIC, are
subject to regulation, principally for the protection of policyholders, by
the insurance departments of the various states in which each is licensed
to do business. The nature and extent of such regulation varies, but
generally depends on statutes which delegate regulatory, supervisory and
administrative powers to state insurance commissioners.

In general, such regulation relates, among other things, to licenses
to transact business; policy forms; premium rates; annual and other
reports on financial condition; the basis upon which assets and
liabilities must be stated; requirements regarding contingency reserves
equal to 50% of premiums earned; minimum capital levels and adequacy
ratios; reinsurance requirements; limitations on the types of investment
instruments which may be held in an investment portfolio; the size of
risks and limits on coverage of individual risks which may be insured;
deposits of securities; limits on dividends payable; and claims handling.
Most states also regulate transactions between insurance companies and
their parents or affiliates. For a description of limits on dividends
payable, see Note 10 to the consolidated financial statements of the
Company, included in Exhibit 13 to this Annual Report on Form 10-K.

Mortgage insurance premium rates are also subject to state regulation
to protect policyholders against the adverse effects of excessive,
inadequate or unfairly discriminatory rates and to encourage competition
in the insurance marketplace. Any increase in premium rates must be
justified, generally on the basis of the insurer's loss experience,
expenses and future trend analysis. The general mortgage default
experience may also be considered. Premium rates are subject to review
and challenge by state regulators. Legislatures and state insurance
departments generally allow private mortgage insurers to insure
residential loans with LTVs of up to 97%.

A number of states generally limit the amount of insurance risk which
may be written by a private mortgage insurer to 25 times the insurer's
total policyholders' reserves, commonly known as the "risk-to-capital"
requirement.

MGIC is required to contribute to a contingency loss reserve an
amount equal to 50% of earned premiums. Such amounts cannot be withdrawn
for a period of 10 years, except under certain circumstances.

Mortgage insurers are generally single-line companies, restricted to
writing residential mortgage insurance business only. This essentially
prohibits MGIC from using its capital resources in support of other types
of insurance or non-insurance business. Although the Company, as an
insurance holding company, is prohibited from engaging in certain
transactions with MGIC without submission to and, in some instances, prior
approval of applicable insurance departments, the Company is not subject
to insurance company regulation on its non-insurance businesses.

As the most significant purchasers and sellers of conventional
mortgage loans and beneficiaries of private mortgage insurance, Freddie
Mac and Fannie Mae impose requirements on private mortgage insurers in
order for such insurers to be eligible to insure loans sold to such
agencies. These requirements of Freddie Mac and Fannie Mae are subject to
change from time to time. Currently, MGIC is an approved mortgage insurer
for both Freddie Mac and Fannie Mae. In addition, to the extent Fannie Mae
or Freddie Mac changes current guarantee fee arrangements, allows
alternative credit enhancement, alters or liberalizes underwriting
guidelines on low down payment mortgages they purchase, or otherwise
changes its business practices or processes with respect such mortgages,
private mortgage insurersmay be affected.

Fannie Mae has issued primary mortgage insurance master policy
guidelines applicable to MGIC and all other Fannie Mae-approved private
mortgage insurers, establishing certain minimum terms of coverage
necessary in order for an insurer to be eligible to insure loans purchased
by Fannie Mae. The terms of MGIC's Master Policy comply with these
guidelines.

MGIC's claims-paying ability is rated "AA+" by Standard & Poor's
Corporation and "Aa2" by Moody's Investors Service, Inc. Maintenance of
a claims-paying ability rating of at least AA-/Aa3 is critical to a
mortgage insurer's ability to continue to write new business. In
assigning claims-paying ability ratings, rating agencies review a mortgage
insurer's competitive position and business, management, corporate strategy
historical and projected operating and underwriting performance,
adequacy of capital to withstand extreme loss scenarios under assumptions
determined by the rating agency, as well as other factors. The rating
agency issuing the claims-paying ability rating can withdraw or change its
rating at any time.

Certain proposed legislation regarding cancellation of mortgage
insurance is discussed at "The MGIC Book - Types of Product - Primary
Insurance" above.

Indirect Regulation

The Company and MGIC are also indirectly, but significantly, impacted
by regulations affecting purchasers of mortgage loans, such as Freddie Mac
and Fannie Mae, and regulations affecting governmental insurers, such as
the FHA and VA, and lenders. Private mortgage insurers, including MGIC,
are highly dependent upon federal housing legislation and other laws and
regulations to the extent they affect the demand for private mortgage
insurance and the housing market generally. From time to time, those laws
and regulations have been amended so as to change competition from
government agencies, particularly FHA. The Clinton Administration has
recently proposed to Congress that the FHA loan limits be increased to
the Fannie Mae and Freddie Mac loan limits. In addition, various other
proposals have been discussed from time to time by Congress and certain
federal agencies to reform or modify the FHA.

Subject to certain exceptions, RESPA prohibits any person from giving
or receiving any "thing of value" pursuant to an agreement or
understanding to refer real estate settlement services, which include
mortgage insurance. In recent years, RESPA has been a source of
substantial uncertainty and litigation for the home mortgage lending and
real estate settlement services industries.

The OTS, the OCC, the Federal Reserve Board, and the Federal Deposit
Insurance Corporation have uniform guidelines on real estate lending by
insured lending institutions under their supervision. The guidelines
specify that a residential mortgage loan originated with an LTV of 90% or
greater should have appropriate credit enhancement in the form of mortgage
insurance or readily marketable collateral, although no depth of coverage
percentage is specified in the guidelines.

Since 1989, OTS has had in effect its risk-based capital rules for
savings institutions which establish a lower capital requirement if a low
down payment loan is insured with private mortgage insurance, as opposed
to being self-insured. To the extent risk-based capital rules for savings
institutions are changed in the future, or if, as has been proposed by
some plans, the functions and authority of the OTS are transferred to, or
consolidated with, other federal banking agencies, and such actions do not
continue to provide for favorable capital treatment for privately insured
mortgage loans, some or all of the benefits of OTS' risk-based capital
rules to MGIC and the mortgage insurance industry may be curtailed or
eliminated.

Lenders are subject to various laws, including the Home Mortgage
Disclosure Act, the Community Reinvestment Act and the Fair Housing Act,
and Fannie Mae and Freddie Mac are subject to various laws, including laws
relating to government sponsored enterprises, which may impose obligations
or create incentives for increased lending to low and moderate income
persons, or in targeted areas.

There can be no assurance that other federal laws and regulations
affecting such institutions and entities will not change, or that new
legislation or regulations (including legislation or regulation that
expands the permissible insurance activities of affiliates of
depositary institutions) will not be adopted which will adversely affect
the private mortgage insurance industry.

G. Employees

At December 31, 1997, the Company had 1,090 full- and part-time
employees, of whom approximately two-thirds were assigned to its Milwaukee
headquarters and the remainder were assigned to its field offices.

Item 2. Properties.

At December 31, 1997, the Company leased office space in various
cities throughout the United States under leases expiring between 1998 and
2002 and which required annual rentals of $1.9 million in 1997.

The Company owns its headquarters facility and an additional
office/warehouse facility, both located in Milwaukee, Wisconsin, which
contain an aggregate of approximately 340,000 square feet of space.

The Company maintains two mainframe computers at its corporate data
center located in its headquarters facility to support its data processing
requirements. The Company has in place back up procedures in the event of
emergency situations.

Item 3. Legal Proceedings.

Information concerning certain legal proceedings involving the
Company and its subsidiaries is included in Note 12 to the
consolidated financial statements, included in Exhibit 13 to this Annual
Report on Form 10-K, which Note is incorporated herein by reference.

Item 4. Submission of Matters to a Vote of Security Holders.

None

Executive Officers

Certain information with respect to the Company's executive officers
as of March 1, 1998 is set forth below:

Name and Age Title

William H. Lacy, 53 . . . . President and Chief Executive Officer of the
Company and Chairman of the Board and Chief
Executive Officer of MGIC; Director of the
Company and MGIC

Curt S. Culver, 45 . . . . President and Chief Operating Officer of
MGIC and Executive Vice President of the
Company

J. Michael Lauer, 53 . . . Executive Vice President and Chief Financial
Officer of the Company and MGIC

James S. MacLeod, 50 . . . Executive Vice President,Field Operations of
MGIC

Lawrence J. Pierzchalski, 45 Executive Vice President,Risk
Management of MGIC

Gordon H. Steinbach, 52 . . Executive Vice President,Credit Policy of
MGIC

Jeffrey H. Lane, 48 . . . . Senior Vice President, General Counsel and
Secretary of the Company and MGIC


Mr. Lacy has served as President and Chief Executive Officer of the
Company since October 1987 and Chairman of the Board and Chief Executive
Officer of MGIC since May 1996. He was Executive Vice President and Chief
Operating Officer of the Company from March 1985 to October 1987. He was
President and Chief Executive Officer of MGIC from March 1985 to May 1996.

Mr. Culver has served as President and Chief Operating Officer of
MGIC and Executive Vice President of the Company since May 1996. Mr.
Culver served as Executive Vice President+Marketing and Field Operations
of MGIC from January 1995 to May 1996; was Executive Vice
President+Marketing of MGIC from May 1993 to January 1995; was Executive
Vice President-Corporate Development of MGIC from July 1992 to May 1993,
and was Senior Vice President-Office of the President of MGIC from January
1991 to July 1992. He was Senior Vice President-Marketing of MGIC from
April 1988 to January 1991 and held various management positions with MGIC
in the areas of marketing and sales from March 1985 to April 1988.

Mr. Lauer has served as Executive Vice President and Chief Financial
Officer of the Company and MGIC since March 1989.

Mr. MacLeod has served as Executive Vice President-Field Operations
of MGIC since January 1998. He served as Senior Vice President-Field
Operations of MGIC from May 1996 to January 1998 and was Senior Vice
President-Sales of MGIC from January 1995 to May 1996. He served as Senior
Vice President - Business Development Operations of MGIC from October 1994
to January 1995. Prior thereto he was Senior Vice President - Office of
the President of MGIC from May 1993 to October 1994; was Senior Vice
President - Marketing of MGIC from January 1991 to May 1993; was Senior
Vice President - Division Manager of MGIC from July 1987 to January 1991
and had held various management positions with MGIC in the areas of
underwriting and risk management from March 1985 to July 1987.

Mr. Pierzchalski has served as Executive Vice President-Risk
Management of MGIC since May 1996. He served as Senior Vice President-
Risk Management of MGIC from July 1992 to May 1996. He was Vice
President-Risk Management from April 1990 to July 1992, and held various
management positions with MGIC in the areas of market research, corporate
planning and risk management from March 1985 to April 1990.

Mr. Steinbach has served as Executive Vice President-Credit Policy of
MGIC since October 1996. He served as the Executive Vice President-
Affordable Housing and Claims of MGIC from July 1992 to October 1996 and
was Executive Vice President-Risk Management/Claims of MGIC from April
1991 to July 1992. He was Executive Vice President-Risk Management of
MGIC from March 1988 to April 1991, Senior Vice President-Risk Management
of MGIC from May 1986 to March 1988 and Senior Vice President-Underwriting
from March 1985 to May 1986.

Mr. Lane has served as Senior Vice President, General Counsel and
Secretary of the Company and MGIC since August 1996. For more than five
years prior to his joining the Company, Mr. Lane was a partner of Foley &
Lardner, a law firm headquartered in Milwaukee, Wisconsin.
PART II


Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.

The information set forth under the caption "MGIC Stock" in
Exhibit 13 to this Annual Report on Form 10-K is incorporated
herein by reference.

Item 6. Selected Financial Data.

The information set forth in the tables under the caption
"Five-Year Summary of Financial Information" in Exhibit 13 to
this Annual Report on Form 10-K is hereby incorporated by
reference in answer to this Item.

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

The information set forth under the caption "Management's
Discussion and Analysis" in Exhibit 13 to this Annual Report on
Form 10-K is hereby incorporated by reference in answer to this
Item.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The information set forth in the second paragraph under the
caption "Management's Discussion and Analysis - Financial
Condition" in Exhibit 13 to this Annual Report on Form 10-K is
hereby incorporated by reference in answer to this Item.

Item 8. Financial Statements and Supplementary Data.

The consolidated statements of operations, of shareholders'
equity and of cash flows for each of the years in the three-
year period ended December 31, 1997, and the related
consolidated balance sheet of the Company as of December 31,
1997 and 1996, together with the related notes thereto and the
report of independent accountants, as well as the unaudited
quarterly financial data, all set forth in Exhibit 13 to this
Annual Report on Form 10-K, are hereby incorporated by
reference in answer to this Item.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.
PART III


Item 10. Directors and Executive Officers of the Registrant.

The information on the Directors of the Registrant is included
in the Company's Proxy Statement for the 1998 Annual Meeting of
Shareholders, and is hereby incorporated by reference. The
information on the Executive Officers of the Registrant appears
at the end of Part I of this Form 10-K.

Item 11. Executive Compensation.

This information is included in the Company's Proxy Statement
for the 1998 Annual Meeting of Shareholders (other than
information covered by Instruction (9) to Item 402 (a) of
Regulation S-K of the Securities and Exchange Commission), and
is hereby incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

This information is included in the Company's Proxy Statement
for the 1998 Annual Meeting of Shareholders, and is hereby
incorporated by reference.

Item 13. Certain Relationships and Related Transactions.

This information is included in the Company's Proxy Statement
for the 1998 Annual Meeting of Shareholders, and is hereby
incorporated by reference.
PART IV




Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.

(a) 1. Financial statements- The financial statements listed in
the accompanying Index to Consolidated Financial
Statements and Financial Statement Schedules are filed
as part of this Form 10-K.

2. Financial statement schedules - The financial statement
schedules listed in the accompanying Index to
Consolidated Financial Statements and Financial
Statement Schedules are filed as part of this Form 10-K.

3. Exhibits - The accompanying Index to Exhibits is
incorporated by reference in answer to this portion of
this Item and the Exhibits listed in such Index are
filed as part of this Form 10-K.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended
December 31, 1997.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

[Item 14(a) 1 and 2]

Consolidated Financial Statements (all contained in Exhibit 12 to
this Annual Report on Form 10-K)

Consolidated statement of operations for each of the three years in
the period ended December 31, 1997

Consolidated balance sheet at December 31, 1997 and 1996

Consolidated statement of shareholders' equity for each of the three
years in the period ended December 31, 1997

Consolidated statement of cash flows for each of the three years in
the period ended December 31, 1997

Notes to consolidated financial statements

Report of independent accountants

Financial Statement Schedules (all contained immediately following the
signature page to this Annual Report on Form 10-K)

Report of independent accountants on financial statement schedules

Schedules at and for the specified years in the three-year period
ended December 31, 1997:

Schedule I - Summary of investments , other than investments in
related parties

Schedule II- Condensed financial information of Registrant

Schedule IV- Reinsurance

All other schedules are omitted since the required information
is not present or is not present in amounts sufficient to
require submission of the schedules, or because the information
required is included in the consolidated financial statements
and notes thereto.
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on
March 30, 1998.

MGIC INVESTMENT CORPORATION


By /s/ William H. Lacy
William H. Lacy
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below as of the date set forth above by the
following persons on behalf of the registrant and in the capacities
indicated.

Name and Title


/s/ William H. Lacy
William H. Lacy
President, Chief Executive Officer and
Director


/s/ J. Michael Lauer
J. Michael Lauer
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)


/s/ Patrick Sinks
Patrick Sinks
Vice President, Controller and
Chief Accounting Officer
(Principal Accounting Officer)


/s/ James A. Abbott
James A. Abbott, Director


/s/ Mary K. Bush
Mary K. Bush, Director


/s/ Karl E. Case
Karl E. Case, Director


/s/ David S. Engelman
David S. Engelman, Director


/s/ James D. Ericson
James D. Ericson, Director


/s/ Daniel Gross
Daniel Gross, Director


/s/ Kenneth M. Jastrow, II
Kenneth M. Jastrow, II, Director


/s/ Sheldon B. Lubar
Sheldon B. Lubar, Director


/s/ William A. McIntosh
William A. McIntosh, Director


/s/ Leslie M. Muma
Leslie M. Muma, Director



/s/ Peter J. Wallison
Peter J. Wallison, Director



/s/ Edward J. Zore
Edward J. Zore, Director
Report of Independent Accountants on
Financial Statement Schedules


To the Board of Directors
of MGIC Investment Corporation


Our audits of the consolidated financial statements referred to in our
report dated January 7, 1998 appearing on page 23 of the 1997 Annual
Report to Shareholders of MGIC Investment Corporation (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedules listed in Item 14(a) of this Form 10-K. In our
opinion, these Financial Statement Schedules present fairly, in all
material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.






PRICE WATERHOUSE LLP

Milwaukee, Wisconsin
January 7, 1998
MGIC INVESTMENT CORPORATION

SCHEDULE I - SUMMARY OF INVESTMENTS -
OTHER THAN INVESTMENTS IN RELATED PARTIES

December 31, 1997

Amount at
Amortized Market which shown in
Type of Investment Cost Value the balance sheet
(In thousands of dollars)

Fixed maturities:
Bonds:
United States
Government and
government
agencies and
authorities $ 60,972 $ 64,543 $64,543
States, municipalities
and political
subdivisions 1,620,660 1,723,020 1,723,020
Foreign governments 14,086 15,002 15,002
Public utilities 46,488 48,550 48,550
All other corporate
bonds 324,513 332,329 332,329
Redeemable preferred
stocks 2,414 2,510 2,510
--------- --------- ----------
Total fixed
maturities 2,069,133 2,185,954 2,185,954

Equity securities:
Common stocks:
Banks, trust and
insurance
companies 103,670 116,053 116,053
--------- --------- ---------
Total equity
securities 103,670 116,053 116,053
--------- --------- ---------
Short-term investments 114,733 114,733 114,733
--------- --------- ---------
Total investments $2,287,536 $2,416,740 $2,416,740
========= ========= =========
<TABLE>

MGIC INVESTMENT CORPORATION

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEET
PARENT COMPANY ONLY
December 31, 1997 and 1996
1997 1996
(In thousands of dollars)
<S> <C> <C>
ASSETS
Investment portfolio, at market value:
Fixed maturities $ 11,487 $ 20,211
Short-term investments 5,411 4,683
------- --------
Total investment portfolio 16,898 24,894

Cash - 7
Investment in subsidiaries, at equity in net assets 1,693,879 1,341,206
Income taxes receivable - affiliates 18,912 12,088
Accrued investment income 224 260
Other assets 9 16
--------- ---------
Total assets $ 1,729,922 $ 1,378,471
========= =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 237,500 $ -
Accounts payable - affiliates 3,057 12,356
Other liabilities 2,583 -
--------- ---------
Total liabilities 243,140 12,356
--------- ---------

Shareholders' equity (note B):

Common stock, $1 par value, shares authorized
150,000,000; shares issued 121,110,800;
outstanding 1997 - 113,791,593; 1996 - 117,900,868 121,111 121,111
Paid-in surplus 218,499 207,984
Treasury stock (shares at cost, 1997 - 7,319,207;
1996 - 3,209,932) (252,942) (7,073)
Unrealized appreciation in investment portfolio of
subsidiaries, net of tax 83,985 40,685
Retained earnings 1,316,129 1,003,408
---------- ----------
Total shareholders' equity 1,486,782 1,366,115
---------- ----------
Total liabilities and shareholders' equity $ 1,729,922 $ 1,378,471
---------- ----------

See accompanying supplementary notes to Parent Company condensed financial statements.


</TABLE>
<TABLE>

MGIC INVESTMENT CORPORATION

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
<CAPTION>
CONDENSED STATEMENT OF OPERATIONS
PARENT COMPANY ONLY
Years Ended December 31, 1997, 1996 and 1995

1997 1996 1995
(In thousands of dollars)
<S> <C> <C> <C>
Revenue:
Equity in undistributed net income of subsidiaries $ 304,434 $ 240,631 $ 186,184
Dividends received from subsidiaries 22,143 16,349 20,521
Investment income, net 1,576 1,256 902
Realized investment gains (losses), net 233 (32) 42
Other income - 3 -
------------- ------------ -------------
Total revenue 328,386 258,207 207,649
------------- ------------ -------------
Expenses:

Operating expenses 374 216 84
Interest expense 6,080 - -
------------- ------------ -------------
Total expenses 6,454 216 84
------------- ------------ -------------
Income before tax 321,932 257,991 207,565
Credit for income tax (1,818) - -
------------- ------------ -------------
Net income $ 323,750 $ 257,991 $ 207,565
============= ============ =============


See accompanying supplementary notes to Parent Company condensed financial statements.

</TABLE>
<TABLE>

MGIC INVESTMENT CORPORATION

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
<CAPTION>
CONDENSED STATEMENT OF CASH FLOWS
PARENT COMPANY ONLY
Years Ended December 31, 1997, 1996 and 1995


1997 1996 1995
(In thousands of dollars)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 323,750 $ 257,991 $ 207,565
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in undistributed net income of subsidiaries (304,434) (240,631) (186,184)
Increase in income taxes receivable (6,824) (6,443) (1,969)
Decrease in accrued investment income 36 18 31
(Decrease) increase in accounts payable - affiliates (9,299) 1,413 1,704
Increase (decrease) in other liabilities 2,583 - (226)
Other (81) (1) (233)
------------ ---------- ---------
Net cash provided by operating activities 5,731 12,347 20,688
------------ ---------- ---------

Cash flows from investing activities:
Increase in investment in subsidiaries (5,000) (10,000) (15,000)
Purchase of fixed maturities (8,650) (7,232) (11,034)
Sale of fixed maturities 17,523 4,632 9,205
Sale of equity securities - 30 -
------------ ---------- ---------
Net cash (used in) provided by investing activities 3,873 (12,570) (16,829)
------------ ---------- ---------

Cash flows from financing activities:
Dividends paid to shareholders (11,029) (9,425) (9,371)
Repurchase of outstanding common shares (248,426) - -
Increase in note payable 237,500 - -
Reissuance of treasury stock 13,072 10,209 6,079
------------ ---------- ---------
Net cash provided by (used in) financing activities (8,883) 784 (3,292)
------------ ---------- ---------
Net increase in cash and short-term investments 721 561 567
Cash and short-term investments at beginning of year 4,690 4,129 3,562
------------ ---------- ---------
Cash and short-term investments at end of year $ 5,411 $ 4,690 $ 4,129
============ ========== =========


See accompanying notes to Parent Company condensed financial statements.


</TABLE>
MGIC INVESTMENT CORPORATION

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

PARENT COMPANY ONLY

SUPPLEMENTARY NOTES


Note A

The accompanying Parent Company financial statements should be read in
conjunction with the Consolidated Financial Statements and Notes to
Consolidated Financial Statements appearing on pages 10 through 23 of the
MGIC Investment Corporation 1997 Annual Report to Shareholders.

Note B

The Company's insurance subsidiaries are subject to statutory
regulations as to maintenance of policyholders' surplus and payment of
dividends. The maximum amount of dividends that the insurance
subsidiaries may pay in any twelve-month period without regulatory
approval by the Office of the Commissioner of Insurance of the State of
Wisconsin is the lesser of adjusted statutory net income or 10% of
statutory policyholders' surplus as of the preceding calendar year end.
Adjusted statutory net income is defined for this purpose to be the
greater of statutory net income, net of realized investment gains, for the
calendar year preceding the date of the dividend or statutory net income,
net of realized investment gains, for the three calendar years preceding
the date of the dividend less dividends paid within the first two of the
preceding three calendar years. In 1998, the Company's principal
insurance subsidiary, Mortgage Guaranty Insurance Corporation can pay
$33.3 million of dividends and the other insurance subsidiaries of the
Company can pay $2.5 million of dividends without such regulatory
approval.

Certain of the Company's non-insurance subsidiaries also have
requirements as to maintenance of net worth. These restrictions could
also affect the Company's ability to pay dividends. In 1998, the Company
can pay dividends of $25.9 million from the Parent Company's funds and
funds available from the non-insurance subsidiaries. In 1997, 1996 and
1995, the Company paid dividends of $11.0 million, $9.4 million and $9.4
million, respectively or $.095 per share in 1997 and $.08 per share in
1996 and 1995.
<TABLE>

MGIC INVESTMENT CORPORATION

SCHEDULE IV - REINSURANCE
<CAPTION>
MORTGAGE INSURANCE PREMIUMS EARNED
Years Ended December 31, 1997, 1996 and 1995

Assumed Percentage
Ceded to From of Amount
Gross Other Other Net Assumed to
Amount Companies Companies Amount Net
(In thousands of dollars)
<S> <C> <C> <C> <C>
Year ended December 31,
1997 $ 712,069 $ 15,990 $ 12,665 $ 708,744 1.8%
============ ============== ============== ==============
1996 $ 623,148 $ 19,350 $ 13,245 $ 617,043 2.1%
============ ============== ============== ==============
1995 $ 522,069 $ 23,760 $ 8,191 $ 506,500 1.6%
============ ============== ============== ==============

</TABLE>
INDEX TO EXHIBITS

[Item 14(a)3]

Exhibit
Numbers Description of Exhibits

3.1 Articles of Incorporation, as amended, including
Articles of Amendment effective May 23, 1994.(1)

3.2 Amended and Restated Bylaws.(2)

4.1 Article 6 of the Articles of Incorporation
(included within Exhibit 3.1)

4.2 Amended and Restated Bylaws (included as
Exhibit 3.2)

[The Company is a party to a Credit Agreement with
a group of financial institutions which is not
being filed pursuant to Reg. S-K Item 602(b) (4)
(iii) (A). The Company hereby agrees to furnish a
copy of such Credit Agreement to the Commission
upon its request.]

10.1 Common Stock Purchase Agreement between the Company
and The Northwestern Mutual Life Insurance Company
("NML"), dated November 30, 1984(3)

10.2 Tax Agreement between NML, the Company and certain
subsidiaries of the Company, dated January 1, 1986,
including amendment thereto dated as of August 2,
1991(4)

10.3 Tax Sharing Agreement between the Company, MGIC and
certain subsidiaries of MGIC, dated January 22,
1986(5)

10.4 Amendment to Tax Agreement, dated as of August 14,
1991, by and between NML, the Company, and its
subsidiaries(6)

10.5 Amended and Restated Investment Advisory and
Servicing Agreement between the Company and
Northwestern Mutual Investment Services, Inc.,
dated December 5, 1997.

10.6 MGIC Investment Corporation Amended and Restated
1989 Stock Option Plan (including forms of option
agreement).(7)

10.7 MGIC Investment Corporation 1991 Stock Incentive
Plan.

10.8 Form of Stock Option Agreement under 1991 Stock
Option Plan (now known as the 1991 Stock Incentive
Plan).(8)

10.9 Form of Stock Option Agreement under 1991 Stock
Incentive Plan (1997 Form 1).

10.10 Form of Restricted Stock Award Agreement under 1991
Stock Incentive Plan.

10.11 Executive Bonus Plan

10.12 Supplemental Executive Retirement Plan.(9)

10.13 MGIC Investment Corporation Deferred Compensation
Plan for Non-Employee Directors.(10)

10.14 MGIC Investment Corporation 1993 Restricted Stock
Plan for Non-Employee Directors.(11)

10.15 Two forms of Award Agreement under MGIC Investment
Corporation 1993 Restricted Stock Plan for Non-
Employee Directors.(12)

10.16 Form of MGIC Mortgage Guaranty Master Policy, in
effect generally for insurance commitments issued
beginning March 1, 1995, including the Master
Policy Program Endorsement relating to delegated
underwriting.(13)

11 Statement re: computation of per share earnings

13 Information from the 1997 Annual Report of the
Company to Shareholders which is incorporated by
reference in this Annual Report on Form 10-K.

21 List of Subsidiaries

23 Consent of Price Waterhouse LLP

27 Financial Data Schedule

Supplementary List of the above Exhibits which relate to management
contracts or compensatory plans or arrangements.

10.6 MGIC Investment Corporation Amended and Restated
1989 Stock Option Plan (including forms of option
agreement).

10.7 MGIC Investment Corporation 1991 Stock Incentive
Plan.

10.8 Form of Stock Option Agreement under 1991 Stock
Option Plan (now known as the 1991 Stock Incentive
Plan).

10.9 Form of Stock Option Agreement under 1991 Stock
Incentive Plan (1997 Form 1).

10.10 Form of Restricted Stock Award Agreement under 1991
Stock Incentive Plan.

10.11 Executive Bonus Plan

10.12 Supplemental Executive Retirement Plan.

10.13 MGIC Investment Corporation Deferred Compensation
Plan for Non-Employee Directors.

10.14 MGIC Investment Corporation 1993 Restricted Stock
Plan for Non-Employee Directors.

10.15 Two forms of Award Agreement under MGIC Investment
Corporation 1993 Restricted Stock Plan for Non-
Employee Directors.

The following documents, identified in the footnote references
above, are incorporated by reference, as indicated, to: the Company's
Form S-1 Registration Statement (No. 33-41289), which became effective in
August 1991 (the "1991 S-1"); the Company's Annual Reports on Form 10-K
for the years ended December 31, 1991, 1992, 1993, 1994 or 1996 (the "1991
10-K," "1992 10-K," "1993 10-K," "1994 10-K," and "1996 10-K,"
respectively; or to the Quarterly Report on Form 10-Q for the Quarter
ended June 30, 1994 (the "10-Q as of June 30, 1994"). The documents are
further identified by cross-reference to the Exhibits in the respective
documents where they were originally filed:

(1) Exhibit 3.3 to the 10-Q as of June 30, 1994.

(2) Exhibit 3.2 to the 1991 S-1 and the amendment thereto is
Exhibit 3.3 to the 1992 10-K.

(3) Exhibit 10.1 to the 1991 S-1.

(4) The Tax Agreement is Exhibit 10.8 to the 1991 S-1 and the
amendment thereto is Exhibit 10.21 to the 1991 S-1.

(5) Exhibit 10.9 to the 1991 S-1.

(6) Exhibit 10.10 to the 1991 10-K.

(7) Exhibit 10.16 to the 1991 S-1.

(8) Exhibit 10.19 to the 1991 10-K.

(9) Exhibit 10.16 to the 1996 10-K

(10) Exhibit 10.23 to the 1993 10-K.

(11) Exhibit 10.24 to the 1993 10-K.

(12) Exhibits 10.27 and 10.28 to the 10-Q as of June 30, 1994.

(13) Exhibit 10.26 to the 1994 10-K.