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, 2002

                                       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 Identification No.)
incorporation or organization)

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
                                     Common Share Purchase Rights

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



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           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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes X    No

State the aggregate market value of the voting stock held 
by non-affiliates of the Registrant as of June 30, 2002:      $7.0 billion* 

* Solely for purposes of computing such value and without thereby admitting that
such persons are affiliates of the Registrant, shares held 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 but excluding shares subject to
stock options.

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock as of February 15, 2003: 99,243,731.

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

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

1.   Information from 2002 Annual Report to      Item 1 of Part I
     Shareholders (for Fiscal Year Ended         Items 5 through 8 of Part II
     December 31, 2002)

2.   Proxy Statement for the 2003 Annual         Item 5 of Part II
     Meeting of Shareholders                     Items 10 through 13 of Part III


*In each case, to the extent provided in the Items listed

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]


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                                     Part I


Item 1.  Business.

A.   General

     MGIC Investment Corporation (the "Company") is a holding company which,
through its wholly owned subsidiary Mortgage Guaranty Insurance Corporation
("MGIC"), is the leading provider of private mortgage insurance coverage in the
United States to the home mortgage lending industry. 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
homeowner 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 National Mortgage Association
("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac")
(Fannie Mae and Freddie Mac are collectively referred to as the "GSEs"). In
addition to mortgage insurance on first liens, the Company, through other
subsidiaries, provides lenders with various underwriting and other services and
products 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 Company and its business may be materially affected by the factors
discussed in "Management's Discussion and Analysis -- Risk Factors" in Exhibit
13 to this Annual Report on Form 10-K. These factors may also cause actual
results to differ materially from the results contemplated by forward looking
statements that the Company may make.

B.   The MGIC Book

     Types of Product

     In general, there are two principal types of private mortgage insurance:
"primary" and "pool."

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     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. References in this document to "primary
insurance" include insurance written in bulk transactions (see "Bulk
Transactions" below) that is supplemental to mortgage insurance written in
connection with the origination of the loan. Effective with the third quarter of
2001, in reports by private mortgage insurers to the trade association for the
private mortgage insurance industry, mortgage insurance that is supplemental to
other mortgage insurance is classified as pool insurance. The trade association
classification is used by members of the private mortgage insurance industry in
reports to a mortgage industry publication that computes and publishes primary
market share information.

     The following table shows, on a direct basis, primary insurance in force
(the unpaid principal balance of insured loans as reflected in MGIC's records)
and primary risk in force (the coverage percentage applied to the unpaid
principal balance and for risk in force as of December 31, 2000 - 2002, taking
into account any loss limit that is applicable to a portfolio or group of
insured loans), for insurance that has been written by MGIC (the "MGIC Book") as
of the dates indicated:

                       Primary Insurance and Risk In Force

                                                 December 31,
                               ------------------------------------------------
                                 2002      2001      2000      1999      1998
                               --------  --------  --------  --------  --------
                                           (In millions of dollars)
Direct Primary
Insurance In Force.........    $196,988  $183,904  $160,192  $147,607  $137,990


Direct Primary
Risk In Force(1)...........    $ 47,623  $ 42,678  $ 39,090  $ 35,623  $ 32,891


(1) Net of aggregate loss limits for 2002, 2001 and 2000. Aggregate loss limits
for years prior to 2000 are immaterial and are not reflected.

     The coverage percentage provided by MGIC is determined by the lender. For
loans sold by lenders to Fannie Mae or Freddie Mac, the coverage percentage must
comply with the 

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requirements established by the particular GSE to which the loan is delivered.
Effective in the first quarter of 1995, Freddie Mac and Fannie Mae increased
their coverage requirements for, among other loan types, 30-year fixed rate
mortgages with loan-to-value ratios, determined at loan origination ("LTVs"), of
90.01-95.00% ("95s") from 25% coverage to 30% coverage and for such mortgages
with LTVs of 85.01-90.00% ("90s") from 17% to 25%. During the first quarter of
1999, the GSEs changed their mortgage insurance requirements for fixed rate and
certain other mortgages on owner occupied properties having terms greater than
20 years when the loan is approved by their automated underwriting services.
Lenders may deliver these loans to the GSEs with the prior coverage requirements
(30% for a 95 and 25% for a 90), or in the case of 95s, with either (i) 25%
coverage or (ii) 18% coverage and the payment of a delivery fee to the GSE, and
in the case of 90s, with either (i) 17% coverage or (ii) 12% coverage and the
payment of a delivery fee to the GSE.

     The following table shows new insurance written during the last five years
for 95s with 30% coverage and for 90s with 25% coverage:

          Coverage Categories as a Percentage of New Insurance Written

                                    Year Ended December 31,
                       -------------------------------------------------
     LTV/
     Coverage          2002       2001       2000        1999      1998
     --------          ----       ----       ----        ----      ----
     
     95 / 30%          23.9%      26.5%      32.2%      32.0%      33.9%
     
     90 / 25%          29.0%      29.7%      29.6%      34.7%      38.6%
                       ----       ----       ----       ----       ----
        Total          52.9%      56.2%      61.8%      66.7%      72.5%

The Company expects the aggregate percentage of its new insurance written with
95/30% and 90/25% coverage will continue to decline in response to the GSEs
changed mortgage insurance requirements. The amount of 90s and 95s that MGIC
insures as a percentage of its new insurance written is also affected by
refinance activity, which generally involves loans with lower LTVs. Refinance
activity was a higher percentage of new insurance written in 1998, 2001 and 2002
than in the other years shown in the table. The amount of 90s and 95s written
through the bulk channel is substantially lower than insurance written through
the flow channel. (MGIC's bulk business prior to 2000 was not significant.)

     MGIC charges higher premium rates for higher coverages, and the deeper
coverage requirements imposed by the GSEs beginning in 1995 have resulted in
higher earned premiums for loans with the same characteristics (such as LTV and
loan type). MGIC believes depth of coverage requirements have no significant
impact on frequency of default. Higher coverage percentages generally result in
increased severity (which is the amount paid on a claim), and lower coverage

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percentages generally result in decreased severity. In accordance with industry
accounting practice, reserves for losses are only established for loans in
default. Because relatively few defaults occur in the early years of a book of
business (see "Past Industry Losses; Defaults; and Claims--Claims" below),
the higher premium revenue from deeper coverage is recognized before any higher
losses resulting from that deeper coverage may be incurred. On the other hand,
while a decline in coverage percentage will result in lower premium revenue, it
should also result in lower incurred (and paid) losses at the same level of
claim incidence. However, given the historical pattern of claims, the decline in
revenue will precede the benefits of reduced severity. MGIC's premium pricing
methodology generally targets substantially similar returns on capital
regardless of the depth of coverage. However, there can be no assurance that
changes in the level of premium rates adequately reflect the risks associated
with changes in the depth of coverage.

     In partnership with mortgage insurers, the GSEs are also offering programs
under which, on delivery of an insured loan to a GSE, the primary coverage is
restructured to an initial shallow tier of coverage followed by a second tier
that is subject to an overall loss limit and, depending on the program,
compensation may be paid to the GSE reflecting services or other benefits
realized by the mortgage insurer from the coverage conversion. Lenders receive
guaranty fee relief from the GSEs on mortgages delivered with these restructured
coverages.

     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.

     Under the federal Homeowners Protection Act (the "HPA") a borrower has the
right to stop paying premiums for private mortgage insurance on loans closed
after July 28, 1999 secured by a property comprised of one dwelling unit that is
the borrower's primary residence when certain LTV ratio thresholds determined by
the value of the home at loan origination and other requirements are met. In
general, a borrower may stop making mortgage insurance payments when the LTV
ratio is scheduled to reach 80% (based on the loan's amortization schedule
established at loan origination) if the borrower so requests and if certain
requirements relating to the borrower's payment history and the absence of
junior liens and a decline in the property's value since origination are
satisfied. In addition, a borrower's obligation to make payments for private
mortgage insurance generally terminates regardless of whether a borrower so
requests when the LTV ratio reaches 78% of the unpaid principal balance of the
mortgage and the borrower is (or thereafter becomes) current in his mortgage
payments. A borrower's right to stop paying for private mortgage insurance
applies only to borrower paid mortgage insurance. The HPA requires that lenders
give borrowers certain notices with regard to the cancellation of private
mortgage insurance.

     In addition, some states require that mortgage servicers periodically
notify borrowers of the circumstances in which they may request a mortgage
servicer to cancel private mortgage insurance 


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and some states allow the borrower to require the mortgage servicer to cancel
private mortgage insurance under certain circumstances or require the mortgage
servicer to cancel such insurance automatically in certain circumstances.

     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 43.8% in 2002 compared to 43.7% in 2001 and
18.0% in 2000.

     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 and, for A- and subprime loans, the location of the
borrower's credit score within a range of credit scores. In general, A- loans
have FICO scores between 575 and 619 and subprime loans have FICO credit scores
of less than 575.

     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.

     The borrower's mortgage loan instrument may require the borrower to pay the
mortgage insurance premium ("borrower paid mortgage insurance") or there may be
no such requirement imposed on the borrower, in which case the premium is paid
by the lender, who may recover the premium through an increase in the note rate
on the mortgage ("lender paid mortgage insurance"). Almost all of MGIC's primary
insurance in force and new insurance written, other than through bulk
transactions, is borrower paid mortgage insurance. New insurance written through
bulk transactions is generally paid by the securitization vehicles that hold the
mortgages; the mortgage note rate generally does not reflect the premium for the
mortgage insurance.

     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 


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plan. 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.

     During each of the last three years, the monthly premium plan represented
more than 90% of MGIC's new insurance written. The annual premium plan
represented substantially all of the remaining new insurance written.

     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 2002 was
$674 million and was $412 million in 2001. New pool risk written during these
years was comprised of agency pool insurance, risk associated with loans
delivered to the Federal Home Loan Banks under their mortgage purchase programs
and risk associated with loans made under state housing finance programs. Net
(giving effect to external reinsurance) MGIC Book pool risk in force at December
31, 2002 was $2.4 billion compared to $1.8 billion and $1.5 billion at December
31, 2001 and 2000, respectively. The risk amounts referred to above are
contractual aggregate loss limits and, for the year ended December 31, 2002, for
$3.0 billion of risk without such limits, risk calculated at $276 million for
new risk written and $274 million for risk in force, representing the estimated
amount that would credit enhance these loans to a 'AA' level.

     For a discussion of litigation brought as a nationwide class action
alleging that MGIC violated the Real Estate Settlement Procedures Act ("RESPA")
by providing agency pool insurance and entering into other transactions with
lenders that were not properly priced (the "RESPA Litigation"), see Item 3
"Legal Proceedings." The settlement of the RESPA Litigation, which was approved
by the District Court in June 2001 but which has been challenged through an
appeal of a related order, includes an injunction that specifies the basis on
which agency pool insurance may be provided in compliance with RESPA. There can
be no assurance that the standards established by the injunction will be
determinative of compliance with RESPA were additional litigation to be brought
in the future.

     In a February 1, 1999 circular addressed to all mortgage guaranty insurers
licensed in New York, the New York Department of Insurance ("NYID") advised that
"significantly underpriced" 


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agency pool insurance would violate the provisions of New York insurance law
that prohibit mortgage guaranty insurers from providing lenders with inducements
to obtain mortgage guaranty business. The NYID circular does not provide
standards under which the NYID will evaluate whether agency pool insurance is
"significantly underpriced." In response to subsequent inquiries from the NYID,
MGIC provided various information about agency pool insurance to the NYID. In a
January 31, 2000 letter addressed to all mortgage guaranty insurers licensed in
Illinois, the Illinois Department of Insurance advised that providing pool
insurance at a "discounted or below market premium" in return for the referral
of primary mortgage insurance would violate Illinois law.

     Risk Sharing Arrangements. MGIC's products include risk sharing
arrangements with the GSEs and 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. During the nine
months ended September 30, 2002, about 53% of MGIC's new insurance written on a
flow basis was subject to risk sharing arrangements compared to 50% for the year
ended December 31, 2001. (New insurance written through the bulk channel is not
subject to such arrangements.) The percentage of new insurance written during a
quarter covered by such arrangements normally increases after the end of the
quarter because, among other reasons, the transfer of a loan in the secondary
market can result in a mortgage insured during a quarter becoming part of such
an arrangement in a subsequent quarter. Therefore, the percentage of new
insurance written covered by such arrangements is shown only for the nine months
ended September 30, 2002. The complaint in the RESPA Litigation alleges that
MGIC pays "inflated" captive mortgage reinsurance premiums in violation of
RESPA. The settlement includes an injunction that specifies the basis on which
captive mortgage reinsurance may be provided in compliance with RESPA. There can
be no assurance that the standards established by the injunction will be
determinative of compliance with RESPA were additional litigation to be brought
in the future.

     A substantial portion of the Company's captive mortgage reinsurance
arrangements are structured on an excess of loss basis. The Company has decided
that, effective March 31, 2003, it will not participate in excess of loss risk
sharing arrangements with net premium cessions in excess of 25% on terms which
are generally present in the market. The captive mortgage reinsurance programs
of larger lenders generally are not consistent with the Company's position.
Hence, the Company expects its position with respect to such risk sharing
arrangements will result in a reduction in business from some of these lenders.
See "The MGIC Book-Customers."

     External Reinsurance. At December 31, 2002, disregarding reinsurance under
captive structures, less than 3% of MGIC's insurance in force was externally
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.

     Bulk Transactions. Primary insurance may be written on a flow basis, in
which loans are insured in individual, loan-by-loan transactions, or may be
written on a bulk basis, in which a portfolio of loans is insured in a single,
bulk transaction. Generally, in bulk transactions, the individual loans in the
insured portfolio are insured to specified levels of coverage and there may be
an aggregate loss limit applicable to all of the insured loans. The premium in a
bulk 


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transaction is based on the mortgage insurer's evaluation of the overall risk of
the insured loans included in the transaction and is negotiated with the
securitizer or other owner of the loans.

     In general, the loans insured by MGIC in bulk transactions consist of Alt A
loans; jumbo loans with FICO credit scores of at least 700; A- loans; and
subprime loans. Alt A loans meet the conforming loan limit referred to below and
have FICO credit scores of at least 620, which is viewed as the cut-off for
prime quality loans, but do not meet the standard underwriting requirements of
the GSEs because of reduced documentation or other factors, such as in a
refinance transaction exceeding a specified increase in the amount of the
mortgage debt due to cash being paid to the borrower. A jumbo loan has an unpaid
principal balance that exceeds the conforming loan limit. The conforming loan
limit is the maximum unpaid principal amount of a mortgage loan that can be
purchased by the GSEs. The conforming loan limit is subject to annual
adjustment, and for mortgages covering a home with one dwelling unit is $322,700
for 2003 and was $300,700 in 2002 and $275,000 in 2001. A- loans have FICO
scores between 575 and 619 and subprime loans have FICO credit scores of less
than 575.

     Approximately 55% of MGIC's bulk loan risk in force at December 31, 2002
had FICO credit scores of at least 620. Approximately 27% of MGIC's bulk loan
risk in force at December 31, 2002 had A- FICO credit scores, and approximately
18% had subprime credit scores. Most of the subprime loans insured by MGIC in
2002 were insured in bulk transactions. More than half of MGIC's bulk loan risk
in force at December 31, 2002 had LTV ratios of 80% and below.

     New insurance written for bulk transactions was $22.5 billion during 2002
compared to $25.7 billion for 2001 and $7.0 billion for 2000. The Company's
writings of bulk insurance are in part sensitive to the volume of securitization
transactions involving non-conforming loans. A securitization involves the sale
of whole loans held by the securitizer. The Company believes that the relatively
high historical spread between the cost of funding mortgages and mortgage coupon
rates during portions of the second half of 2002 resulted in increased prices
for whole loans which had the effect of reducing the supply of mortgages
available for current securitization. The Company's writings of bulk insurance
are also sensitive to competition from other methods of providing credit
enhancement in a securitization, including the willingness of investors to
purchase tranches of the securitization with a higher degree of credit risk.

     Customers

     Originators of residential mortgage loans such as mortgage bankers, savings
institutions, commercial banks, mortgage brokers, credit unions and other
lenders have historically determined the placement of mortgage insurance written
on flow basis and as a result are the customers of MGIC. To obtain primary
insurance from MGIC written on flow basis, a mortgage lender must first apply
for and receive a mortgage guaranty master policy ("Master Policy") from MGIC.
MGIC had approximately 12,900 master policyholders at December 31, 2002 (not
including policies issued to branches and affiliates of large lenders). In 2002,
MGIC issued coverage on mortgage loans for approximately 4,800 of its master
policyholders. MGIC's top 10 customers generated 39.5% of its new insurance
written on a flow basis in 2002, compared to 38.4% in 2001, 36.2% in 2000 and
20.0% in 1996.

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     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, 2002, MGIC had
30 underwriting centers located in 21 states and in Puerto Rico.

     Competition. For flow business, 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 2002 accounted for approximately 36% (compared
to approximately 37% during 2001) of the total low down payment residential
mortgages which were subject to governmental or private mortgage insurance. See
"Regulation, Indirect Regulation" below. Loans insured by the FHA cannot exceed
maximum principal amounts which are determined by a percentage of the conforming
loan limit. For 2003, the maximum FHA loan amount for homes with one dwelling
unit in "high cost" areas is as high as $280,749 and was as high as $261,609 in
2002 and $239,250 in 2001. Loans insured by the VA do not have mandated maximum
principal amounts but have maximum limits on the amount of the guaranty provided
by the VA to the lender. For loans closed after December 27, 2001 the maximum VA
guarantee is $60,000.

     In addition to competition from the FHA and the VA, 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.

     Private mortgage insurers may also be subject to competition from Fannie
Mae and Freddie Mac to the extent the GSEs are compensated for assuming default
risk that would otherwise be insured by the private mortgage insurance industry.
Fannie Mae and Freddie Mac each have programs under which an up-front delivery
fee can be paid to the GSE and primary mortgage insurance coverage is
substantially reduced compared to the coverage requirements that would apply in
the absence of the program. See "Types of Product--Primary Insurance" above. In
October 1998, Freddie Mac's charter was amended (and the amendment immediately
repealed) to give Freddie Mac flexibility to use protection against default in
addition to private mortgage insurance and the two other types of credit
enhancement required by the charter for low down payment mortgages purchased by
Freddie Mac. In addition, to the extent up-front delivery fees are not retained
by the GSEs to compensate for their assumption of default risk, and are used
instead to purchase supplemental coverage from mortgage insurers, the resulting
concentration of purchasing power in the hands of the GSEs could increase
competition among insurers to provide such coverage.

     The capital markets may also develop as competitors to private mortgage
insurers. During 1998, a newly-organized off-shore company funded by the sale of
notes to institutional 


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investors provided "reinsurance" to Freddie Mac against default on a specified
pool of mortgages owned by Freddie Mac.

     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 "80-10-10" loans, which are loans
comprised of both a first and a second mortgage (for example, an 80% LTV first
mortgage and a 10% LTV second mortgage), with the LTV ratio of the first
mortgage below what investors require for mortgage insurance, compared to a loan
in which the first mortgage covers the entire borrowed amount (which in the
preceding example would be a 90% LTV mortgage). 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 currently consists of eight active
mortgage insurers and their affiliates; one of the eight is a joint venture in
which a mortgage insurer is one of the joint venturers. The names of these
mortgage insurers are listed in "Management's Discussion and Analysis--Risk
Factors" in Exhibit 13 to this Annual Report on Form 10-K. According to Inside
Mortgage Finance, a mortgage industry publication, which obtains its data from
reports to it by MGIC and other mortgage insurers that are to be prepared on the
same basis as the reports by insurers to the trade association for the private
mortgage insurance industry, for 1995 and subsequent years, MGIC has been the
largest private mortgage insurer based on new primary insurance written (with a
market share of 24.8% in 2002, 25.0% in 2001 and 24.5% in 2000) and at December
31, 2001, MGIC also had the largest book of direct primary insurance in force.
Effective with the third quarter of 2001, these reports do not include as
"primary mortgage insurance" insurance on certain loans classified by MGIC as
primary insurance, such as loans insured through bulk transactions that already
had mortgage insurance placed on the loans at origination.

     The private mortgage insurance industry is highly competitive. The Company
believes it competes with other private mortgage insurers for flow business
principally on the basis of programs involving captive mortgage reinsurance (as
discussed under "Risk Sharing Arrangements" above, effective March 31, 2003,
MGIC will not participate in excess of loss risk sharing arrangements with net
premium cessions in excess of 25% on terms which are generally present in the
market), agency pool insurance, and other similar structures involving lenders;
the provision of contract underwriting and related fee-based services to
lenders; the provision of other products and services that meet lender needs for
underwriting risk management, affordable housing, loss mitigation, capital
markets and training support; the strength of MGIC's management team and field
organization; and the effective use of technology and innovation in the delivery
and servicing of MGIC's insurance products. The Company believes MGIC's
additional competitive strengths, compared to other private insurers, are its
customer relationships, name recognition, reputation and the depth of its
database covering loans it has insured. The Company believes it competes for
bulk business principally on the basis of the premium rate and the portion of
loans submitted for insurance that the Company is willing to insure.

     The complaint in the RESPA Litigation alleges, among other things, that
captive mortgage reinsurance, agency pool insurance, and contract underwriting
as provided by the Company violate 


                                       10

<PAGE>

RESPA. The settlement includes an injunction that specifies the basis on which
these products and services may be provided in compliance with RESPA. There can
be no assurance that the standards established by the injunction will be
determinative of compliance with RESPA were additional litigation to be brought
in the future.

     Certain private mortgage insurers compete for flow business 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.

     In the third quarter of 2001, the Office of Federal Housing Enterprise
Oversight ("OFHEO") adopted a risk-based capital stress test for the GSEs, which
was amended in February 2002. One of the elements of the stress test is that
future claim payments made by a private mortgage insurer on GSE loans are
reduced below the amount provided by the mortgage insurance policy to reflect
the risk that the insurer will fail to pay. Claim payments from an insurer whose
claims-paying ability rating is 'AAA' are subject to a 3.5% reduction over the
10-year period of the stress test, while claim payments from a 'AA' rated
insurer, such as MGIC, are subject to a 8.75% reduction. The effect of the
differentiation among insurers is to require the GSEs to have additional capital
for coverage on loans provided by a private mortgage insurer whose claims-paying
rating is less than 'AAA.' As a result, there is an incentive for the GSEs to
use private mortgage insurance provided by a 'AAA' rated insurer.

     Contract Underwriting and Related Services

     The Company performs contract underwriting services for lenders in which
the Company judges whether the data relating to the borrower and the loan
contained in the lender's mortgage loan application file comply with the
lender's loan underwriting guidelines. The Company also provides an interface to
submit such data to the automated underwriting systems of the GSEs, which
independently judge the data. These services are provided for loans that require
private mortgage insurance as well as for loans that do not require private
mortgage insurance. A material portion of the Company's new insurance written in
recent years involved loans for which the Company provided contract underwriting
services. The complaint in the RESPA Litigation alleges, among other things,
that the pricing of contract underwriting provided by the Company violates
RESPA. The settlement specifies the basis on which contract underwriting may be
provided in compliance with RESPA. There can be no assurance that the standards
established by the injunction will be determinative of compliance with RESPA
were additional litigation to be brought in the future.

     Risk Management

     Risk Management Philosophy. MGIC's risk management philosophy has
traditionally focused on evaluating four major elements of risk:

                                       11

<PAGE>

     o    Individual Loan and Borrower. Except to the extent its delegated
          underwriting program is being utilized or for loans approved by the
          automated underwriting services of the GSEs (see "Delegated
          Underwriting and GSE Automated Underwriting Approvals" 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 FICO credit score, as reported by credit
          reporting agencies, as well as the borrower's housing and total debt
          ratios. In the case of delegated underwriting, compliance with program
          parameters is monitored by periodic audits of delegated business.

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

     o    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 ARMs with an initial interest period of less than
          five years and loans with a maturity longer than fifteen years.

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

     The Company believes that, excluding other factors, the claim incidence for
95s is substantially higher than for 90s or loans with lower LTV ratios; for
loans with LTVs greater than 95 (which include loans with LTVs of up to 103) is
substantially higher than for 95s; 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 the conforming loan limit is
higher than for loans where such amount is below the conforming loan limit; and
for loans with lower FICO credit scores (which include subprime loans) is higher
than for loans with higher FICO credit scores. MGIC charges higher premium rates
to reflect the increased risk of claim incidence that it perceives is associated
with a loan. However, there can be no assurance that MGIC's premium rates
adequately reflect the increased risk, particularly in a period of economic
recession.

                                       12

<PAGE>

     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.

     As discussed under "GSE Automated Underwriting Approvals" below, a
substantial percentage of the loans insured by MGIC through the flow channel are
approved for mortgage insurance as a result of the approval of such loans by the
automated underwriting services of the GSEs.

     Underwriting Process. To obtain primary insurance on a specific mortgage
loan for which delegated underwriting is not being used, a master policyholder
typically submits an application to MGIC, 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. For delegated
loans insured on a flow basis, while MGIC does not underwrite on a loan-by-loan
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. Loans insured in bulk transactions
are categorized as delegated underwritten loans. For these loans, the audit is
conducted prior to the commitment for the insurance and includes other
procedures for certain loans that are not audited.

                                       13

<PAGE>

     At December 31, 2002, MGIC's delegated underwriting program involved
approximately 519 lenders, including all of MGIC's top twenty customers. Loans
insured under MGIC's delegated underwriting program accounted for approximately
47.8% of MGIC's total risk in force at December 31, 2002. The percentage of new
risk written by delegated underwriters increased to 54.9% in 2002 from 53.1% in
2001 (this increase is principally due to loans insured in bulk transactions)
and was 46.8% in 2000.

     Loans covered under agency pool insurance are not underwritten by MGIC on a
loan-by-loan basis. If the loan has primary insurance provided by MGIC,
delegated underwriting is used, and if the loan has primary insurance provided
by another mortgage insurer or has no primary insurance, the lender underwrites
the loan to standards set forth in the agency pool insurance agreement with the
lender.

     MGIC also has a reduced document submission program under which it approves
a loan for insurance if the borrower satisfies certain minimum criteria for
credit scores and debt ratios.

     GSE Automated Underwriting Approvals. Since 2000, loans approved by the
automated underwriting services of the GSEs have been automatically approved for
MGIC mortgage insurance and were generally insured at premium rates applicable
to prime quality loans. MGIC observed that some of the loans approved by these
services had higher risk than prime quality loans, and effective August 1, 2002,
MGIC began charging A- minus premium rates for such loans with such risk
characteristics. During 2002, approximately 60% of the loans insured by MGIC
through the flow channel were approved as a result of loan approvals by the
automated underwriting services of the GSEs. The loan approval criteria of those
services are within the risk management discretion and control of the GSEs. As a
result of accepting the loan approval decisions of these services, MGIC does not
have the ability to control in advance the risk characteristics of such loans.


     Past Industry Losses; Defaults; and Claims

     Past Industry Losses. The private mortgage insurance industry 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.

                                       14

<PAGE>

     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 (including at December 31, 1999 - 2002, loans insured in bulk
transactions and A- and subprime loans), the related number of loans in default
and the percentage of loans in default (default rate) as of those dates:


                                       15

<PAGE>


<TABLE>
                              Default Statistics for the MGIC Book

<CAPTION>
                                                           December 31,
                                  --------------------------------------------------------------
                                     2002         2001         2000        1999        1998(1)

<S>                               <C>          <C>          <C>          <C>          <C>      
PRIMARY INSURANCE
   Insured loans in force ....... 1,655,887    1,580,283    1,448,348    1,370,020    1,320,994
   Loans in default .............    73,648       54,653       37,422       29,761       29,253
   Percentage of loans in 
    default (default rate) ......      4.45%        3.46%        2.58%        2.17%        2.21%
   Flow loans in default ........    43,196       36,193       29,889       27,062            -
   Percentage of flow loans                                                                   
    in default (default rate) ...     3.19%        2.65%        2.19%        2.02%            -
   Bulk loans in force ..........   301,859      214,917       83,513       33,569            -
   Bulk loans in default ........    30,452       18,460        7,533        2,699            -
   Percentage of bulk loans                                                                   
    in default (default rate) ...     10.09%        8.59%        9.02%        8.04%           -
   A-minus and subprime                                                                       
    loans in force(2) ...........   201,195      134,888       64,086       36,599            -
   A-minus and subprime                                                                       
    loans in default(2) .........    25,504       15,649        6,126        2,706            -
   Percentage of A-minus                                                                      
    and subprime loans in                                                                     
    default (default rate) ......     12.68%       11.60%        9.34%        7.39%           -
POOL INSURANCE                                                                          
   Insured loans in force ....... 1,208,157    1,351,266    1,360,059    1,181,512      899,063
   Loans in default .............    26,676       23,623       18,209       11,638        6,524
   Percentage of loans in 
    default(default rate) .......      2.21%        1.75%        1.34%        0.99%        0.73%

(1) The information not separately presented at December 31, 1998 is not material.

(2) A portion of A-minus and subprime loans is included in the data for flow loans and the
remainder is included in the data for bulk loans. Most A-minus and subprime credit loans are
written through the bulk channel.
</TABLE>


     The default rate for flow loans has generally increased due to an increase
in the risk profile of loans insured since 1998 and the continued maturation of
MGIC's insurance in force. The default rate for bulk loans reflects the higher
default rate associated with such loans. The default rate for bulk loans is
expected to continue to increase. The number of pool insurance loans in force
increased at December 31, 1998-2002 as a result of agency pool insurance
writings, and the number of pool insurance loans in default at those dates
increased due to the increase in pool insurance in force and the aging of the
loans in the pools.

                                       16

<PAGE>

     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    Dec. 31    Dec. 31
                             2002       2001       2000        1999      1998
                            -------    -------    -------    -------    -------
MGIC REGION:                                                          
New England............      2.91%      2.27%      1.84%      1.60%      1.78%
Northeast..............      4.74       3.90       3.15       3.02       3.05
Mid-Atlantic...........      4.05       3.27       2.69       2.19       2.28
Southeast..............      4.87       3.65       2.72       2.24       2.23
Great Lakes............      5.17       3.74       2.68       2.09       1.89
North Central..........      4.22       3.21       2.22       1.85       1.91
South Central..........      4.65       3.56       2.56       2.00       2.00
Plains.................      3.41       2.76       1.98       1.40       1.40
Pacific................      3.73       3.38       2.63       2.42       2.73
                                                                      
   National............      4.45%      3.46%      2.58%      2.17%      2.21%
____________________                                                 
*   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.

                                       17

<PAGE>

     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. For prime loans, 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 and due in part to the subprime component of loans
insured in bulk transactions, MGIC expects that the peak claim period for bulk
loans will occur earlier than for prime loans. 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, 2002, 82.4% of the
MGIC Book primary insurance in force had been written during 1999 - 2002,
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 $20,115 for 2002 as compared to $18,607 in 2001.

     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.

                                       18

<PAGE>

     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 inherently judgmental.
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 information about loss reserves, see "Management's Discussion
and Analysis-Results of Consolidated Operations-2002 Compared with 2001" and
Note 6 to the consolidated financial statements of the Company, both of which
are 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, 2001:

                       Dispersion of Primary Risk in Force

       Top 10 States                                 Top 10 MSAs
----------------------------          -----------------------------------------

 1.  California        12.0%           1.  Chicago                         3.8%
 2.  Florida            6.7            2.  Los Angeles                     3.4
 3.  Texas              6.1            3.  Atlanta                         2.4
 4.  Michigan           5.2            4.  Detroit                         2.3
 5.  Illinois           5.1            5.  Phoenix                         2.2
 6.  Ohio               4.7            6.  Washington, D.C.                2.1
 7.  New York           4.1            7.  Boston                          1.8
 8.  Pennsylvania       3.8            8.  Riverside-San Bernardino        1.8
 9.  Georgia            3.2            9.  Houston                         1.7
10.  Arizona            2.8           10.  New York                        1.5
                       ----                                               ----
     Total             53.7%               Total                          23.1%
                       ====                                               ====

     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.

                                       19

<PAGE>

     Insurance in Force by Policy Year

     The following table sets forth the dispersion of MGIC's primary insurance
in force as of December 31, 2002, by year(s) of policy origination since MGIC
began operations in 1985:

                    Primary Insurance In Force by Policy Year

                                Primary Insurance              Percent 
     Policy Year                    in  Force                  of Total
     ------------------------------------------------------------------
                            (In millions of dollars)
     
     1985-1996                      $ 16,526                     8.4%
     1997                              4,830                     2.4
     1998                             13,360                     6.8
     1999                             14,159                     7.2
     2000                             12,907                     6.6
     2001                             57,528                    29.2
     2002                             77,678                    39.4
                                    --------                   -----
       Total                        $196,988                   100.0%
                                    ========                   =====
                                

     Product Characteristics of Risk in Force

     At December 31, 2002 and 2001, 94.9% and 95.6%, 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.


                                       20

<PAGE>

                    Characteristics of Primary Risk in Force

                                                     December 31,   December 31,
                                                        2002            2001
                                                    -------------   ------------

Direct Risk in  Force (Dollars in Millions):.....      $47,623        $42,678
                                                    
Lender Concentration:                               
   Top 10 lenders................................        28.0%          29.5%
   Top 20 lenders................................        37.8%          39.7%
                                                    
LTV: (1)                                            
   100s..........................................         8.5%           6.4%
   95s...........................................        36.9           40.6
   90s(2)........................................        45.4           46.2
   80s...........................................         9.2            6.8
       Total.....................................       100.0%         100.0%
                                                    
Loan Type:                                          
   Fixed(3)......................................        81.5%          85.3%
   Adjustable rate mortgages ("ARMs")(4).........        17.8           13.9
   Balloon(5)....................................         0.7            0.8
       Total.....................................       100.0%         100.0%
                                                    
Original Insured Loan Amount(6):                    
   Conforming loan limit and below...............        92.5%          91.0%
   Non-conforming................................         7.5            9.0
       Total.....................................       100.0%         100.0%
                                                    
Mortgage Term:                                      
   15-years and under............................         4.7%           3.9%
   Over 15 years.................................        95.3           96.1
       Total.....................................       100.0%         100.0%
                                                    
Property Type:                                      
   Single-family(7)..............................        93.8%          93.8%
   Condominium...................................         6.0            5.9
   Other(8)......................................         0.2            0.3
       Total.....................................       100.0%         100.0%
                                                    
Occupancy Status:                                   
   Primary residence.............................        95.1%          96.2%
   Second home...................................         1.7            1.7
   Non-owner occupied............................         3.2            2.1
       Total.....................................       100.0%         100.0%
__________________                                                             

                                       21

<PAGE>

(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. For purposes of the table, LTV ratios are
     classified as in excess of 95% ("100s", a classification that includes 97%
     to 103% LTV loans); in excess of 90% LTV and up to 95% LTV ("95s"); in
     excess of 80% LTV and up to 90% LTV ("90s"); and equal to or less than 80%
     LTV ("80s").
 (2) 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, 2002 and
     2001, 2.0% and 2.4%, respectively, of the primary risk in force consisted
     of these types of loans.
(3)  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) and ARMs in which the
     initial interest rate is fixed for at least five years.
(4)  Includes ARMs where payments adjust fully with interest rate adjustments.
     Also includes ARMs with negative amortization, which at December 31, 2002
     and 2001, represented 0.7% and 0.9%, respectively, of primary risk in
     force. Does not include ARMs in which the initial interest rate is fixed
     for at least five years. As of December 31, 2002 and 2001, ARMs with LTVs
     in excess of 90% represented 3.3% and 2.5%, respectively, of primary risk
     in force.
(5)  Balloon payment mortgages are loans with a maturity, typically five to
     seven years, that is shorter than the loans' amortization period.
(6)  Loans within the conforming loan limit have an original principal balance
     that does not exceed the maximum original principal balance of loans that
     the GSEs are eligible to purchase. The conforming loan limit is subject to
     annual upward adjustment and was $300,700 for 2002 and $275,000 for 2001.
     Non-conforming loans are loans with an original principal balance above the
     conforming loan limit.
(7)  Includes townhouse-style attached housing with fee simple ownership.
(8)  Includes cooperatives and manufactured homes deemed to be real estate.


C.   Other Business and Joint Ventures

     The Company, through subsidiaries, provides various mortgage services for
the mortgage finance industry, such as contract underwriting, portfolio
retention, secondary marketing of mortgage-related assets and, through its
majority-owned Equix Financial Services LLC subsidiary, mortgage loan
origination and fulfillment services. The Company's eMagic.com LLC subsidiary
provides an Internet portal through which mortgage originators can access
products and services of wholesalers, investors, and vendors necessary to make a
home mortgage loan.

     At December 31, 2002, the Company also owned approximately 46% of
Credit-Based Asset Servicing and Securitization LLC ("C-BASS") and approximately
46% of Sherman Financial Group LLC, joint ventures with senior management of the
joint ventures and Radian Group Inc. Effective January 1, 2003, the Company and
Radian Group Inc. each sold 4 percentage points of their respective interest in
Sherman to Sherman's management for cash. For further information about the
C-BASS and Sherman joint ventures, see "Management's Discussion and
Analysis--Results of Consolidated Operations--2002 Compared to 2001" and Note 8
to the 


                                       22

<PAGE>

consolidated financial statements of the Company, both of which are included in
Exhibit 13 to this Annual Report on Form 10-K.

     The revenues recognized from these mortgage services operations, other
non-insurance services and the joint ventures represented 9.4% and 5.4% of the
Company's consolidated revenues in 2002 and 2001, respectively.

     In 1997, the Company, through subsidiaries, began insuring second
mortgages, including home equity loans. New insurance written on second
mortgages in 2002, 2001 and 2000 was approximately $37.2 million, $1.3 billion
and $1.1 billion. The Company discontinued writing new second mortgage risk for
loans closing after December 31, 2001.

D.   Investment Portfolio

     Policy and Strategy

     Cash flow from the Company's investment portfolio represented approximately
38% of its total cash flow from operations during 2002. Approximately 79% 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, 2002
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, 2002, based on amortized cost, approximately 98.5% of the
Company's total fixed income investment portfolio was invested in securities
rated 'A' or better, with 78.7% which were rated 'AAA' and 17.7% 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.

                                       23

<PAGE>

     Investment Operations

     At December 31, 2002, the market value of the Company's investment
portfolio was approximately $4.7 billion. At December 31, 2002, municipal
securities represented 83.7% of the market 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 3.7%, 16.4%, 23.5% and 56.4%,
respectively, of the total book value of the Company's investment in debt
securities. The Company's net pre-tax investment income was $207.5 million for
the year ended December 31, 2002. The Company's after-tax yield for 2002 was
4.2%, which was lower than the after-tax yield in 2001 of 4.6%.

     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.

E.   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 and have restrictions on transactions
that have the effect of inducing lenders to place business with the insurer. For
a discussion of a February 1, 1999 circular letter from the NYID and a January
31, 2000 letter from the Illinois Department of Insurance, see "The MGIC
Book--Types of Product--Pool Insurance" and "--Captive Mortgage Reinsurance."
For a description of limits on dividends payable, see "Management's Discussion
and Analysis-Liquidity and Capital Resources" and Note 11 to the consolidated
financial statements of the Company, both of which are 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. 


                                       24

<PAGE>

The general mortgage default experience may also be considered. Premium rates
are subject to review and challenge by state regulators.

     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 establish a contingency loss reserve in 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. 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.

     Wisconsin's insurance regulations generally provide that no person may
acquire control of the Company unless the transaction in which control is
acquired has been approved by the Office of the Commissioner of Insurance of
Wisconsin. The regulations provide for a rebuttable presumption of control when
a person owns or has the right to vote more than 10% of the voting securities.

     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 assumes default risk for
itself that would otherwise be insured, changes current guarantee fee
arrangements (including as a result of primary mortgage insurance coverage being
restructured as described under "The MGIC Book--Types of Product--Primary
Insurance"), 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 to such
mortgages, private mortgage insurers may 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 


                                       25

<PAGE>

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.

     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 to
affect competition from government agencies. See "The MGIC Book - Sales and
Marketing and Competition - Competition." Proposals are discussed from time to
time by Congress and certain federal agencies to reform or modify the FHA and
the Government National Mortgage Association, which securitizes mortgages
insured by the FHA.

     Subject to certain exceptions, in general, RESPA prohibits any person from
giving or receiving any "thing of value" pursuant to an agreement or
understanding to refer settlement services. See "Item 3--Legal Proceedings."

     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.

     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 will not be adopted which will adversely affect the private mortgage
insurance industry. In this regard, see the penultimate risk factor under
"Management's Discussion and Analysis - Risk Factors" which is included in
Exhibit 13 to this Annual Report on Form 10-K.


                                       26

<PAGE>

F.   Employees

     At December 31, 2002, the Company and its consolidated subsidiaries had
approximately 1,300 full- and part-time employees, of whom approximately 38%
were assigned to MGIC's field offices. The number of employees given above does
not include "on-call" employees. The number of "on-call" employees can vary
substantially, primarily as a result of changes in demand for contract
underwriting services.

G.   Website Access

     The Company makes available free of charge through its Internet website its
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K, and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably
practicable after the Company electronically files such material with the SEC.
The address of the Company's website is www.mgic.com and such reports may be
accessed through the "Investor-News and Financials-Filings With SEC" portion of
the website.


I
tem 2.  Properties.

     At December 31, 2002, the Company leased office space in various cities
throughout the United States under leases expiring between 2003 and 2006 and
which required annual rentals of $4.7 million in 2002.

     The Company owns its headquarters facility and an additional
office/warehouse facility, both located in Milwaukee, Wisconsin, which contain
an aggregate of approximately 310,000 square feet of space.


Item 3.  Legal Proceedings.

     The Company is involved in litigation in the ordinary course of business.
In the opinion of management, the ultimate resolution of this pending litigation
will not have a material adverse effect on the financial position or results of
operations of the Company.

     In addition, MGIC is a defendant in Downey et. al. v. MGIC, filed in
Federal District Court for the Southern District of Georgia in May 2000
following the dismissal of a similar case filed in December, 1999. The Downey
case sought certification as nationwide class action. Equivalent actions seeking
nationwide class action certification were filed in December 1999 against three
other mortgage insurers (PMI, Republic and United Guaranty) . In August 2000,
the Federal District Court dismissed the cases against PMI, Republic and United
Guaranty on the ground that the Federal McCarran-Ferguson Act barred the RESPA
claims brought by the individual plaintiffs in those cases. Because the pending
case against MGIC dated only from May 2000, the time for MGIC to file a motion
to dismiss the case against it under the motion schedule established by the
Court had not yet occurred.

                                       27

<PAGE>

     In December 2000 MGIC, PMI and United Guaranty entered into a settlement
agreement with the plaintiffs. In the fourth quarter of 2000, the Company
recorded a $23.2 million charge to cover the estimated costs of the settlement,
including payments to borrowers. In June 2001, the Federal District Court issued
a final order approving the December 2000 settlement agreement and certified a
nationwide class of borrowers. Due to appeals of related orders denying certain
class members the right to intervene to challenge certain aspects of the
settlement in Downey and the PMI and United Guaranty cases, payments to
borrowers in the settlement are delayed pending the outcome of the appeals. The
settlement includes an injunction that prohibits certain practices and specifies
the basis on which agency pool insurance, captive mortgage reinsurance, contract
underwriting and other products may be provided in compliance with the Real
Estate Settlement Procedures Act. There can be no assurance that the standards
established by the injunction will be determinative of compliance with RESPA
were additional litigation to be brought in the future.

     The complaint in the case alleges that MGIC violated the Real Estate
Settlement Procedures Act by providing agency pool insurance, captive mortgage
reinsurance, contract underwriting and other products that were not properly
priced, in return for the referral of mortgage insurance. The complaint seeks
damages of three times the amount of the mortgage insurance premiums that have
been paid and that will be paid at the time of judgment for the mortgage
insurance found to be involved in a violation of the Real Estate Settlement
Procedures Act. The complaint also seeks injunctive relief, including
prohibiting MGIC from receiving future premium payments. If the settlement is
not fully implemented, the litigation will continue. In these circumstances,
there can be no assurance that the ultimate outcome of the litigation will not
materially affect the Company's financial position or results of operations.



                                       28

<PAGE>



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, 2003 is set forth below:

Name and Age                                           Title
------------                                           -----

Curt S. Culver, 50................  President and Chief Executive Officer of 
                                    the Company and MGIC; Director of the 
                                    Company and MGIC

John D. Fisk, 46..................  Executive Vice President--Strategic Planning
                                    of the Company and MGIC

J. Michael Lauer, 58..............  Executive Vice President and Chief Financial
                                    Officer of the Company and MGIC

James S. MacLeod, 55..............  Executive Vice President--Field Operations 
                                    of MGIC

Lawrence J. Pierzchalski, 50......  Executive Vice President--Risk Management of
                                    MGIC

Jeffrey H. Lane, 53...............  Senior Vice  President, General Counsel and
                                    Secretary of the Company and MGIC


     Mr. Culver has served as President of the Company since January 1999 and as
Chief Executive Officer since January 2000. He has been President of MGIC since
May 1996 and was Chief Operating Officer of MGIC from May 1996 until he became
Chief Executive Officer in January 1999. Mr. Culver has been a senior officer of
MGIC since 1988 having responsibility at various times during his career with
MGIC for field operations, marketing and corporate development. From March 1985
to 1988, he held various management positions with MGIC in the areas of
marketing and sales.

     Mr. Fisk joined the Company in February 2002. From January 2000 to May 2001
he was Chief Executive Officer of LoanChannel.com, an internet small business
lending portal. For more than 17 years before then, he held various positions
with Freddie Mac, including Senior Vice President--Investor & Dealer Services
from May 1993 to September 1997 and Executive Vice President--Single Family
Securitization Group from September 1997 to January 2000 when he left to found
LoanChannel.com.

                                       29

<PAGE>

     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 and was Senior Vice President-Field Operations of MGIC from
May 1996 to January 1998. Mr. MacLeod has been a senior officer of MGIC since
1987 having responsibility at various times during his career with MGIC for
sales, business development and marketing. From March 1985 to 1987, he held
various management positions with MGIC in the areas of underwriting and risk
management.

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

     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.



                                       30

<PAGE>


                                     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. To the extent required by Instruction 1 to Item 10(c) of
          Schedule 14A or other rules of the Securities and Exchange Commission,
          the information set forth under "Item 2 -Approval of Performance Goals
          for Restricted Stock and Restricted Stock Units Awarded Under 2002
          Stock Incentive Plan - Securities Authorized for Issuance Under Equity
          Compensation Plans" in the Company's Proxy Statement for the 2003
          Annual Meeting of Shareholders 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 third paragraph under the caption
          "Management's Discussion and Analysis - Financial Condition," and in
          the eight and ninth paragraphs under the caption "Management's
          Discussion and Analysis - Liquidity and Capital Resources," all in
          Exhibit 13 to this Annual Report on Form 10-K, is hereby incorporated
          by reference in answer to this Item.


                                       31

<PAGE>


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, 2002, and the related consolidated balance sheet of the
          Company as of December 31, 2002 and 2001, 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.




                                       32

<PAGE>


                                    PART III



Item 10.  Directors and Executive Officers of the Registrant.

          This information (other than on the executive officers) is included in
          the Company's Proxy Statement for the 2003 Annual Meeting of
          Shareholders, and is hereby incorporated by reference. The information
          on the executive officers 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
          2003 Annual Meeting of Shareholders and, other than information
          covered by Instruction (9) to Item 402 (a) of Regulation S-K of the
          Securities and Exchange Commission, 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
          2003 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
          2003 Annual Meeting of Shareholders, and is hereby incorporated by
          reference.


Item 14.  Controls and Procedures.

          The Company's principal executive officer and principal financial
          officer have each concluded that, based on his evaluation of the
          Company's disclosure controls and procedures (as defined in Rule
          13a-14(c) under the Securities Exchange Act of 1934, as amended), as
          of a date within 90 days prior to the filing of this Annual Report on
          Form 10-K, such controls and procedures were effective to ensure that
          material information relating to the Company and its consolidated
          subsidiaries would be made known to them by others within those
          entities. There have been no significant changes in the Company's
          internal controls or in other factors that could significantly affect
          these controls subsequent to the date of their evaluation.


                                       33

<PAGE>



                                     PART IV



Item 15.  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, except as
               otherwise indicated in the next sentence, the Exhibits listed in
               such Index are filed as part of this Form 10-K. Exhibits 99.1 and
               99.2 are not filed as part of this Form 10-K but accompany this
               Form 10-K.

     (b)  Reports on Form 8-K

          A report on Form 8-K dated October 23, 2002 was filed under Item 9. A
          report on Form 8-K dated October 28, 2002 was filed under Items 7 and
          9.



                                       34

<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES

                              [Item 15(a) 1 and 2]


Consolidated Financial Statements (all contained in Exhibit 13 to this Annual
Report on Form 10-K):

Consolidated statement of operations for each of the three years in the period
ended December 31, 2002

Consolidated balance sheet at December 31, 2002 and 2001

Consolidated statement of shareholders' equity for each of the three years in
the period ended December 31, 2002

Consolidated statement of cash flows for each of the three years in the period
ended December 31, 2002

Notes to consolidated financial statements

R
eport 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, 2002:

     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.

                                       35

<PAGE>



                                   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 28, 2003.

MGIC INVESTMENT CORPORATION


By   /s/ Curt S. Culver       

     -------------------------------------
     Curt S. Culver
     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/ Curt S. Culver                           /s/ David S. Engelman
----------------------------------           ----------------------------------
Curt S. Culver                               David S. Engelman, Director       
President, Chief Executive                                                     
Officer and Director                         /s/ Thomas M. Hagerty             
                                             ----------------------------------
/s/ J. Michael Lauer                         Thomas M. Hagerty, Director       
----------------------------------                                             
J. Michael Lauer                             /s/ Kenneth M. Jastrow, II        
Executive Vice President and                 ----------------------------------
Chief Financial Officer                      Kenneth M. Jastrow, II, Director  
(Principal Financial Officer)                                                  
                                             /s/ Daniel P. Kearney             
/s/ Joseph J. Komanecki                      ----------------------------------
----------------------------------           Daniel P. Kearney, Director       
Joseph J. Komanecki                                                            
Senior Vice President, Controller            /s/ Michael E. Lehman             
and Chief Accounting Officer                 ----------------------------------
(Principal Accounting Officer)               Michael E. Lehman, Director       
                                                                               
/s/ James A. Abbott                          /s/ Sheldon B. Lubar              
----------------------------------           ----------------------------------
James A. Abbott, Director                    Sheldon B. Lubar, Director        
                                                                               
/s/ Mary K. Bush                             /s/ William A. McIntosh           
----------------------------------           ----------------------------------
Mary K. Bush, Director                       William A. McIntosh, Director     
                                                                               
/s/ Karl E. Case                             /s/ Leslie M. Muma                
----------------------------------           ----------------------------------
Karl E. Case, Director                       Leslie M. Muma, Director          
                                                                               

                                       36

<PAGE>
                                                                            

I, Curt S. Culver, certify that:

1.   I have reviewed this annual report on Form 10-K of MGIC Investment
     Corporation ("the registrant").

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d -14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared; b) evaluated the effectiveness of the registrant's
          disclosure controls and procedures as of a date within 90 days prior
          to the filing date of this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors:

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

                                       37

<PAGE>


6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  March 28, 2003


                                            \s\ Curt S. Culver          
                                            -----------------------------------
                                            Curt S. Culver
                                            Chief Executive Officer




                                       38

<PAGE>


I, J. Michael Lauer, certify that:

1.   I have reviewed this annual report on Form 10-K of MGIC Investment
     Corporation ("the registrant").

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d -14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors:

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and


                                       39

<PAGE>


6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  March 28, 2003

                                            \s\ J. Michael Lauer             
                                            -----------------------------------
                                            J. Michael Lauer
                                            Chief Financial Office



                                       40

<PAGE>



                      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 8, 2003 appearing in the 2002 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)(2) 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.



/s/ PricewaterhouseCoopers LLP

PRICEWATERHOUSECOOPERS LLP

Milwaukee, Wisconsin
January 8, 2003




                                       41

<PAGE>

                           MGIC INVESTMENT CORPORATION

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

                                December 31, 2002

                                                                Amount at which
                                     Amortized                   shown in the
     Type of Investment                 Cost      Fair Value     balance sheet
     ------------------             -----------   -----------   ---------------
                                             (In thousands of dollars)
Fixed maturities:
   Bonds:
      United States Government 
       and government agencies
       and authorities              $   392,346   $   404,272     $   404,272
      States, municipalities and                                
       political subdivisions         3,725,062     3,956,282       3,956,282
      Foreign governments                14,014        15,704          15,704
      Public utilities                   30,054        32,896          32,896
      All other corporate bonds         191,698       204,308         204,308
                                    -----------   -----------     -----------
         Total fixed maturities       4,353,174     4,613,462       4,613,462
                                                                
Equity securities:                                              
   Common stocks:                                               
      Industrial, miscellaneous                                 
       and all other                     10,779        10,780          10,780
                                    -----------   ------------    -----------
         Total equity securities         10,779        10,780          10,780
                                    -----------   -----------     -----------
                                                                
Short-term investments                  102,230       102,230         102,230
                                    -----------   -----------     -----------
         Total investments          $ 4,466,183   $ 4,726,472     $ 4,726,472
                                    ===========   ===========     ===========
                                                               


                                       42

<PAGE>


<TABLE>

                               MGIC INVESTMENT CORPORATION

               SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                 CONDENSED BALANCE SHEET
                                   PARENT COMPANY ONLY
                                December 31, 2002 and 2001

<CAPTION>
                                                                2002             2001
                                                           -------------     ------------
                                                              (In thousands of dollars)
<S>                                                        <C>               <C>        
ASSETS
Investment portfolio, at market value:
   Fixed maturities                                        $      1,418      $     1,709
   Short-term investments                                           180           20,774
                                                           -------------     ------------
      Total investment portfolio                                  1,598           22,483

Investment in subsidiaries, at equity in net assets           4,088,518        3,486,574
Income taxes receivable - affiliates                              3,074            2,897
Accrued investment income                                             7               87
Other assets                                                      6,343            5,271
                                                           -------------     ------------
      Total assets                                         $  4,099,540      $ 3,517,312
                                                           =============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Short- and long-term debt                               $    676,663      $   472,102
   Accounts payable - affiliates                                     19               21
   Other liabilities                                             27,666           25,002
                                                           -------------     ------------
      Total liabilities                                         704,348          497,125
                                                           -------------     ------------

Shareholders' equity (note B):
   Common stock, $1 par value, shares authorized
    300,000,000; shares issued 2002 - 121,418,637;
    2001 - 121,110,800; outstanding 2002 - 100,251,444;
    2001 - 106,086,594                                          121,419          121,111
   Paid-in surplus                                              232,950          214,040
   Members' equity                                                  380                -
   Treasury stock (shares at cost, 2002 - 21,167,193;
    2001 - 15,024,206)                                       (1,035,858)        (671,168)
   Accumulated other comprehensive income, net of tax           147,908           46,644
   Retained earnings                                          3,928,393        3,309,560
                                                           -------------     ------------
       Total shareholders' equity                             3,395,192        3,020,187
                                                           -------------     ------------
       Total liabilities and shareholders' equity          $  4,099,540      $ 3,517,312
                                                           =============     ============

See accompanying supplementary notes to Parent Company condensed financial statements.
</TABLE>



                                           43

<PAGE>

                           MGIC INVESTMENT CORPORATION

           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                        CONDENSED STATEMENT OF OPERATIONS
                               PARENT COMPANY ONLY
                  Years Ended December 31, 2002, 2001 and 2000

                                              2002         2001         2000
                                           ----------   ----------   ----------
                                                 (In thousands of dollars)
Revenue:
   Equity in undistributed net income
    of subsidiaries                        $ 487,660    $ 644,714    $ 550,014
   Dividends received from subsidiaries      164,653       12,751       11,091
   Investment income, net                      2,338          746          800
   Realized investment gains (losses), 
    net                                           42           29         (659)
                                           ----------   ----------   ----------
       Total revenue                         654,693      658,240      561,246
                                           ----------   ----------   ----------

Expenses:
   Operating expenses                          1,313          926          735
   Interest expense                           36,640       30,623       28,759
                                           ----------   ----------   ----------
      Total expenses                          37,953       31,549       29,494
                                           ----------   ----------   ----------
Income before tax                            616,740      626,691      531,752
Credit for income tax                        (12,451)     (12,446)     (10,247)
                                           ----------   ----------   ----------
Net income                                   629,191      639,137      541,999
                                           ----------   ----------   ----------
Other comprehensive income, net              101,264      (29,170)     116,549
                                           ----------   ----------   ----------
Comprehensive income                       $ 730,455    $ 609,967    $ 658,548
                                           ==========   ==========   ==========


                         See accompanying supplementary notes to
                     Parent Company condensed financial statements.


                                       44

<PAGE>


<TABLE>
                                       MGIC INVESTMENT CORPORATION

                       SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                    CONDENSED STATEMENT OF CASH FLOWS
                                           PARENT COMPANY ONLY
                               Years Ended December 31, 2002, 2001 and 2000

<CAPTION>
                                                                      2002          2001          2000
                                                                  -----------   -----------   -----------
                                                                             (In thousands of dollars)
<S>                                                               <C>           <C>           <C>       
Cash flows from operating activities:
   Net income                                                     $  629,191    $  639,137    $  541,999
   Adjustments to reconcile net income to net                                  
    cash provided by operating activities:                                     
      Equity in undistributed net income of subsidiaries            (487,660)     (644,714)     (550,014)
      (Increase) decrease in income taxes receivable                    (177)       (2,897)        4,518
      Decrease (increase) in accrued investment income                    80           (68)          190
      Increase in other liabilities                                    2,664        11,777        10,559
      (Increase) decrease in other assets                             (1,072)        5,990       (10,303)
      Other                                                           12,190         7,576        29,005
                                                                  -----------   -----------   -----------
Net cash provided by operating activities                            155,216        16,801        25,954
                                                                  -----------   -----------   -----------
                                                                               
Cash flows from investing activities:                                          
   Transactions with subsidiaries                                    (12,160)       (8,657)       (5,050)
   Purchase of fixed maturities                                      (99,604)         (500)      (10,500)
   Sale of fixed maturities                                          100,291           164        21,920
                                                                  -----------   -----------   -----------
Net cash (used in) provided by investing activities                  (11,473)       (8,993)        6,370
                                                                  -----------   -----------   -----------
                                                                               
Cash flows from financing activities:                                          
   Dividends paid to shareholders                                    (10,358)      (10,685)      (10,618)
   Proceeds from issuance of short- and long-term debt               202,087       205,521       309,079
   Repayment of short- and long-term debt                                  -      (133,384)     (336,751)
   Common stock shares issued                                         10,825             -             -
   Reissuance of treasury stock                                        6,179        16,830        18,699
   Repurchase of common stock                                       (373,070)      (73,488)       (6,224)
                                                                  -----------   -----------   -----------
Net cash used in financing activities                               (164,337)        4,794       (25,815)
                                                                  -----------   -----------   -----------
Net (decrease) increase in cash and short-term investments           (20,594)       12,602         6,509
Cash and short-term investments at beginning of year                  20,774         8,172         1,663
                                                                  -----------   -----------   -----------
Cash and short-term investments at end of year                    $      180    $   20,774    $    8,172
                                                                  ===========   ===========   ===========
                                                                              

                See accompanying notes to Parent Company condensed financial statements.
</TABLE>



                                                    45

<PAGE>


                           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 in Exhibit 13 of this Annual Report on Form 10-K.

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. As a result of an extraordinary dividend paid by
MGIC in February, 2002, MGIC cannot pay any dividends without regulatory approal
until February 16, 2003. Thereafter, MGIC can pay $154.8 million of dividends.
The other insurance subsidiaries of the Company can pay $8.7 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 2002, 2001 and 2000, the Company paid dividends of $10.4 million, $10.7
million and $10.6 million, respectively, or $0.10 per share.


                                       46

<PAGE>


<TABLE>
                           MGIC INVESTMENT CORPORATION

                            SCHEDULE IV - REINSURANCE

                       MORTGAGE INSURANCE PREMIUMS EARNED
                  Years Ended December 31, 2002, 2001 and 2000

<CAPTION>
                                                                            Percentage
                                 Ceded to      Assumed                      of Amount
                 Gross            Other       From Other                     Assumed
                Gross Amount    Companies     Companies      Net Amount       to Net
                ------------    ----------    ----------    ------------    ----------
                                             (In thousands of dollars)

Year ended 
December 31,

<S>             <C>             <C>             <C>         <C>                <C> 
   2002         $ 1,296,548     $ 114,898       $  448      $ 1,182,098        0.0%
                ============    ==========      =======     ============      
                                                                              
   2001         $ 1,107,168     $  65,587       $  686      $ 1,042,267        0.1%
                ============    ==========      =======     ============      
                                                                              
   2000         $   939,981     $  50,889       $  999      $   890,091        0.1%
                ============    ==========      =======     ============      
</TABLE>




                                          47

<PAGE>


                                INDEX TO EXHIBITS

                                  [Item 15(a)3]

Exhibit
Numbers                Description of Exhibits
-------                -----------------------

3.1            Articles of Incorporation, as amended.(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)

4.3            Rights Agreement, dated as of July 22, 1999, between MGIC
               Investment Corporation and Firstar Bank Milwaukee, N.A., which
               includes as Exhibit A thereto the Form of Right Certificate and
               as Exhibit B thereto the Summary of Rights to Purchase Common
               shares(3)

4.3.1          First Amendment to Rights Agreement, dated as of October 28,
               2002, between the Company and U.S. Bank National Association.(4)

4.3.2          Second Amendment to Rights Agreement, dated as of October 28,
               2002, between the Company and Wells Fargo Bank Minnesota,
               National Association (as successor Rights Agent to U.S. Bank
               National Association).(5)

4.4            Indenture, dated as of October 15, 2000, between the Company and
               Bank One Trust Company, National Association, as Trustee(6) [The
               Company is a party to various other agreements with respect to
               its long-term debt. These agreements are not being filed pursuant
               to Reg. S-K Item 602(b) (4) (iii) (A). The Company hereby agrees
               to furnish a copy of such agreements to the Commission upon its
               request.]

10.1           Form of Stock Option Agreement under 2002 Stock Incentive Plan

10.1.1         Form of Incorporated Terms to Stock Option Agreement under 2002
               Stock Incentive Plan

10.2           Form of Restricted Stock Agreement under 2002 Stock Incentive
               Plan

10.2.1         Form of Incorporated Terms to Restricted Stock Agreement under
               2002 Stock Incentive Plan

10.3           MGIC Investment Corporation 1991 Stock Incentive Plan(7)

                                       48

<PAGE>

10.3.1         MGIC Investment Corporation 2002 Stock Incentive Plan(8)

10.4           Two Forms of Stock Option Agreement under 1991 Stock Incentive
               Plan.(9)

10.4.1         Form of Stock Option Agreement under 1991 Stock Incentive
               Plan(10)

10.4.2         Form of Incorporated Terms to Stock Option Agreement under 1991
               Stock Incentive Plan(11)

10.5           Two Forms of Restricted Stock Award Agreement under 1991 Stock
               Incentive Plan.(12)

10.5.1         Form of Restricted Stock Agreement under 1991 Stock Incentive
               Plan(13)

10.5.2         Form of Incorporated Terms to Restricted Stock Agreement under
               1991 Stock Incentive Plan(14)

10.6           Executive Bonus Plan

10.7           Supplemental Executive Retirement Plan (15)

10.8           MGIC Investment Corporation Deferred Compensation Plan for
               Non-Employee Directors.(16)

10.9           MGIC Investment Corporation 1993 Restricted Stock Plan for
               Non-Employee Directors.(17)

10.10          Two Forms of Award Agreement under MGIC Investment Corporation
               1993 Restricted Stock Plan for Non-Employee Directors.(18)

10.11          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.(19)

10.12          Form of Key Executive Employment and Severance Agreement.(20)

10.13          Non-Competition, Confidentiality and Severance Agreement, dated
               February 25, 2002, between the Company and John D. Fisk(21)

11             Statement re: computation of per share earnings

13             Information from the 2002 Annual Report of the Company to
               Shareholders which is incorporated by reference in this Annual
               Report on Form 10-K.

21             Direct and Indirect Subsidiaries and Joint Ventures

                                       49

<PAGE>

23             Consent of Independent Accountants

99.1           Certification of CEO under Section 906 of Sarbanes-Oxley Act of
               2002 (as indicated in Item 15(a), this Exhibit is not being
               "filed")

99.2           Certification of CFO under Section 906 of Sarbanes-Oxley Act of
               2002 (as indicated in Item 15(a), this Exhibit is not being
               "filed")

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

10.1           Form of Stock Option Agreement under 2002 Stock Incentive Plan

10.1.1         Form of Incorporated Terms to Stock Option Agreement under 2002
               Stock Incentive Plan

10.2           Form of Restricted Stock Agreement under 2002 Stock Incentive
               Plan

10.2.1         Form of Incorporated Terms to Restricted Stock Agreement under
               2002 Stock Incentive Plan

10.3           MGIC Investment Corporation 1991 Stock Incentive Plan.

10.3.1         MGIC Investment Corporation 2002 Stock Incentive Plan

10.4           Two Forms of Stock Option Agreement under 1991 Stock Incentive
               Plan.

10.4.1         Form of Stock Option Agreement under 1991 Stock Incentive Plan

10.4.2         Form of Incorporated Terms to Stock Option Agreement under 1991
               Stock Incentive Plan

10.5           Two Forms of Restricted Stock Award Agreement under 1991 Stock
               Incentive Plan.

10.5.1         Form of Restricted Stock Agreement under 1991 Stock Incentive
               Plan

10.5.2         Form of Incorporated Terms to Restricted Stock Agreement under
               1991 Stock Incentive Plan

10.6           Executive Bonus Plan

10.7           Supplemental Executive Retirement Plan.

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

                                       50

<PAGE>

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

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

10.12          Form of Key Executive Employment and Severance Agreement

10.13          Non-Competition, Confidentiality and Severance Agreement, dated
               February 25, 2002, between the Company and John D. Fisk



                                       51

<PAGE>



     The following documents, identified in the footnote references above, are
incorporated by reference, as indicated, to: the Company's Annual Reports on
Form 10-K for the years ended December 31, 1993, 1994, 1997, 1999 or 2001 (the
"1993 10-K," "1994 10-K," "1997 10-K," "1999 10-K" and "2001 10-K,"
respectively); to the Company's Quarterly Reports on Form 10-Q for the Quarters
ended June 30, 1994, 1998, or 2000 or September 30, 2002 (the "June 30, 1994
10-Q," "June 30, 1998 10-Q," "June 30, 2000 10-Q" and "September 30, 2002 10-Q,"
respectively); to the Company's registration Statement Form 8-A filed July 27,
1999 (the "8-A"), as amended by Amendment No. 1 filed October 29, 2002 (the
"8-A/A"); to the Company's Current Report on form 8-K dated October 17, 2000
(the "8-K"); or to the Company's Proxy Statement for its 2002 Annual Meeting of
Shareholders (the "2002 Proxy Statement"). The documents are further identified
by cross-reference to the Exhibits in the respective documents where they were
originally filed:

  (1)  Exhibit 3 to the June 30, 1998 10-Q.

  (2)  Exhibit 3.2 to the 1999 10-K.

  (3)  Exhibit 4.1 to the 8-A.

  (4)  Exhibit 4.2 to the 8-A/A.

  (5)  Exhibit 4.3 to the 8-A/A.

  (6)  Exhibit 4.1 to the 8-K.

  (7)  Exhibit 10.7 to the 1999 10-K.

  (8)  Exhibit A to the 2002 Proxy Statement.

  (9)  Exhibit 10.9 to the 1999 10-K.

 (10)  Exhibit 10.4.1 to the 2001 10-K.

 (11)  Exhibit 10.4.2 to the 2001 10-K.

 (12)  Exhibit 10.10 to the 1999 10-K.

 (13)  Exhibit 10.5.1 to the 2001 10-K.

 (14)  Exhibit 10.5.2 to the 2001 10-K.

 (15)  Exhibit 10 to the June 30, 2000 10-Q.

 (16)  Exhibit 10 to the September 30, 2002 10-Q.

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

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

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

 (20)  Exhibit 10.17 to the 1999 10-K.

 (21)  Exhibit 10.13 to the 2001 10-K.


                                       52





                                                                    EXHIBIT 10.1


                             STOCK OPTION AGREEMENT

                  THIS STOCK OPTION AGREEMENT is made and entered into as of the
date indicated on the signature page under "Date of Agreement" by and between
MGIC Investment Corporation, a Wisconsin corporation (the "Company"), and the
employee of Mortgage Guaranty Insurance Corporation whose signature is set forth
on the signature page hereto (the "Employee").

                                  INTRODUCTION

     The Company is granting options to purchase shares of the Company's Common
Stock, $1.00 par value per share (the "Stock"), to the Employee under the MGIC
Investment Corporation 2002 Stock Incentive Plan, as amended (the "Plan") and
this Agreement.

     This Agreement consists of this instrument and the Incorporated Terms Dated
As of _________________________ to Stock Option Agreement (the "Incorporated
Terms"), which although not attached to this instrument, are part of this
Agreement and were provided to the Employee as indicated in Paragraph 1(b)
below.

     The parties mutually agree as follows:

     1. (a) The Company hereby grants to the Employee the right and option (the
"Stock Option") to purchase from the Company, on the terms and conditions herein
set forth, the number of shares of Common Stock set forth on the signature page
hereof after "Number of Shares" (the "Option Shares"),
 at a purchase price per
share set forth on the signature page after "Option Price Per Share" (the
"Option Price"), exercisable as hereinafter stated; provided, however, that such
number of shares and/or Option Price is subject to adjustment as provided in
Section 6 of this Stock Option Agreement. The Stock Option shall be exercisable
in whole or in part, to the extent provided in Section 4 hereof. The Stock
Option is a nonstatutory stock option and not an Incentive Stock Option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

     (b) The Incorporated Terms are incorporated in this instrument with the
same effect as if they were physically set forth in this instrument. The
Incorporated Terms and this instrument constitute a single agreement which is
referred to as "this Agreement." The terms "herein," "hereof," "above" and
similar terms used in this Agreement refer to this Agreement and not to this
instrument or the Incorporated Terms. The Incorporated Terms were attached to an
e-mail sent in _________________________ to the Employee from the Company's
Secretary which included other documents relating to the Stock Option. The
Company is hereby advising the Employee to print and retain a copy of the
Incorporated Terms. The Employee agrees if there is any difference between the
text of the Incorporated Terms received as indicated above and the text of the
Incorporated Terms retained by the Company's Secretary in connection with the
_________________________ meeting of the Management Development Committee, the
text of the copy retained by the Secretary will control.



<PAGE>


     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and the Employee has hereunto affixed his hand and
seal, all as of the day and year set forth below.

     Date of Agreement:  As of


                             MGIC INVESTMENT CORPORATION


                             By:__________________________________________
                             Title:  President and Chief Executive Officer



          Sign Here:  -->    _____________________________________________(SEAL)
                             Name of Employee:____________________________
                             Number of Shares:____________________________

                             Option Price Per Share:    $
                             Final Termination Date:
                             (See Section 4(b)(iv) of Incorporated Terms)


                                VESTING SCHEDULE
                    (See Section 4(a) of Incorporated Terms)

             Date:                         Percent Exercisable or Vested:
             ----                          -----------------------------

           Prior to                                      0%
                                                         20%
                                                         40%
                                                         60%
                                                         80%
                                                        100%


                                       2


                                                                  EXHIBIT 10.1.1

                               INCORPORATED TERMS
                          DATED AS OF _________________
                                       TO
                             STOCK OPTION AGREEMENT

     The following are the "Incorporated Terms" referred to in the instrument
entitled "Stock Option Agreement" which refers to these Incorporated Terms and
which has been signed by the Company and the Employee (the "Base Instrument").
The Incorporated Terms and the Base Instrument constitute a single agreement and
that agreement consists of the Base Instrument and the Incorporated Terms. The
Incorporated Terms dovetail with the Base Instrument; because the last paragraph
of the Base Instrument is Paragraph 1, the Incorporated Terms begin with
Paragraph 2.

     2. (a) The Stock Option, and any part thereof, shall be exercised by the
giving of ten days' (or such shorter period as the Company may permit) prior
written notice of exercise to the Secretary of the Company in a form determined
by the Company from time to time, which form shall, among other things, specify
the number of whole Option Shares to be purchased, and shall be accompanied by
payment in full of the aggregate Option Price for the number of Option Shares to
be purchased. A partial exercise of the Stock Option may not be made with
respect to fewer than ten (10) Option Shares unless the Option
 Shares purchased
are the total number then available for purchase under the Stock Option. Such
notice shall be deemed to have been given when hand-delivered or telecopied to
the person that the Company may specify from time to time, and, shall be
irrevocable and unconditional once given.

          (b) The aggregate Option Price for such Option Shares may be paid
either by cash or a certified or bank cashier's check payable to the order of
the Company, or as otherwise permitted by the Company. The Company hereby
permits such Price to be paid by delivery to the Company of shares of Common
Stock having a Fair Market Value on the day prior to exercise of the Stock
Option equal to such Price, provided such delivery will not result in a charge
to earnings. If the number of shares of Common Stock determined pursuant to the
preceding sentence includes a fractional share, the number of shares delivered
shall be reduced to the next lower whole number and the Employee shall deliver
to the Company cash or its equivalent in lieu of such fractional share, or
otherwise make arrangements satisfactory to the Company for payment of such
amount. Unless such payment method is prohibited by law, including Section 402
of the Sarbanes-Oxley Act of 2002, the Company further permits such Price to be
paid as contemplated in Section 2.4(c) of the Plan, subject to the Company's
right to specify the date on which funds on account of the exercise are to be
paid to the Company.

          (c) The Employee shall be responsible for paying all withholding taxes
applicable to the exercise of any Stock Option. The Company shall have the right
to take any action necessary to insure that the Employee pays the required
withholding taxes. The Employee shall be permitted to satisfy the Company's tax
withholding requirements by making an election (the "Election") to have the
Company withhold Option Shares otherwise issuable to the Employee, or to deliver
to the Company shares of Common Stock, in each case having a Fair Market Value
on the day prior to the day on which income is recognized with respect to the
exercise of the Stock Option (the "Tax Date") equal in amount to the amount to
be so withheld. 


<PAGE>

If the number of shares of Common Stock determined pursuant to the preceding
sentence includes a fractional share, the number of shares withheld or delivered
shall be reduced to the next lower whole number and the Employee shall deliver
to the Company cash or its equivalent in lieu of such fractional share, or
otherwise make arrangements satisfactory to the Company for payment of such
amount. The Election shall be irrevocable and must be received by the Secretary
of the Company at his corporate office on or prior to the Employee's Tax Date.
The Election shall be made in writing and be in such form as the Company shall
determine.

          (d) Upon payment of the aggregate Option Price for the Option Shares
and the required withholding taxes, the Company shall cause a certificate for
the Option Shares so purchased to be delivered to the Employee.

     3. Neither the Employee nor his legal representative shall be or have any
rights or privileges of a shareholder of the Company in respect of any of the
Option Shares issuable upon exercise of the Stock Option unless and until a
certificate or certificates for such Option Shares shall have been issued upon
the exercise of the Stock Option.

     4. (a) The Stock Option shall be deemed to have been granted as of the date
of this Stock Option Agreement and shall become exercisable or vested as
follows:

          (i) The percentage of the Option Shares which shall vest and may be
     exercised by the Employee shall be as set forth on the signature page
     hereof under "Vesting Schedule" with respect to each date set forth
     thereon. For purposes of such vesting schedule, vesting shall occur on the
     date specified and in the percentage indicated in such schedule; and

          (ii) Without limiting the discretion of the Committee to act in other
     cases, if a "Change in Control of the Company" (as defined in the Annex
     attached hereto) occurs, the Stock Option shall become fully vested and
     exercisable in full as of the date thereof.

          (b) If the Employee's employment with the Company terminates for any
reason, the Stock Option to the extent not exercisable or vested as of the date
of termination shall not become exercisable or vested as a result of events
(including the passage of time or the achievement of another anniversary date
for vesting and exercise) occurring subsequent to the date of termination unless
a different result occurs in or pursuant to Section 4(e) below. Except as
provided in or pursuant to Section 4(e) below, the vested but unexercised
portion of the Stock Option shall automatically and without notice terminate and
become null and void at the time of the earliest date (the "Termination Date")
to occur of the following:

          (i) Thirty (30) days after the termination of the Employee's
     employment with the Company and all subsidiaries thereof for any reason
     (including without limitation, disability or termination by the Company and
     all subsidiaries thereof, with or without cause) other than by reason of
     the Employee's death or a leave of absence approved by the Company or by
     reason of the Employee's retirement from the Company and all subsidiaries
     thereof after reaching age 55 and after 

                                      -2-

<PAGE>

     having been employed by the Company or any subsidiary thereof for an
     aggregate period of at least seven (7) years; or

          (ii) Three Hundred Sixty-Five (365) days following the termination of
     the Employee's employment with the Company and all subsidiaries thereof by
     reason of the Employee's death or by reason of the Employee's retirement
     from the Company and all subsidiaries thereof after reaching age 55 and
     after having been employed by the Company or any subsidiary thereof for an
     aggregate period of at least seven (7) years; or

          (iii) Thirty (30) days after expiration or termination of a leave of
     absence approved by the Company unless the Employee becomes reemployed with
     the Company prior to such 30-day period in which event the Stock Option
     shall continue in effect in accordance with its terms; or

          (iv) the date set forth after "Final Termination Date" on the
     signature page hereof.

          (c) The Management Development, Nominating and Governance Committee of
the Company's Board of Directors (the "Management Development Committee") or
other Committee of such Board administering the Plan (the Management Development
Committee or such other Committee is herein referred to as the "Committee"), in
its sole discretion, may from time to time accelerate or waive any conditions to
the exercise of the Stock Option.

          (d) If the Employee dies while in the employ of the Company or any
subsidiary then, regardless of whether the Stock Option is subject to exercise
under Section 4(a) above, the Stock Option shall become immediately vested and
exercisable by the personal representative of the Employee or the person to whom
the Employee's rights under the Stock Option are transferred by law or
applicable laws of descent and distribution.

          (e) (i) If the Employee's employment with the Company and all
subsidiaries terminates by reason of retirement after reaching age 62 and after
having been employed by the Company or any subsidiary thereof for an aggregate
period of at least seven (7) years, (A) the Stock Option shall continue to vest
on each date set forth under "Vesting Schedule" on the signature page if (x) no
later than the date on which employment terminates, the Employee enters into an
agreement with the Company (which agreement shall be drafted by and acceptable
to the Company) under which the Employee agrees not to compete with the Company
and its subsidiaries during a period ending one year after the latest date set
forth under such Vesting Schedule, and (y) the Employee complies with such
agreement, and (B) if the conditions in clause (A) are satisfied, (x) upon the
Employee's death any unvested portion of the Stock Option shall become
immediately vested and exercisable by the personal representative or other
person referred to in Section 4(d) and (y) the Termination Date shall be 365
days after the date on which the last vesting of the Stock Option occurs
(including vesting as a result of death), except that if the Employee was
employed by a combination of the Company or any subsidiary of WMAC Investment
Corporation or any of its subsidiaries for an aggregate continuous period

                                      -3-

<PAGE>

(disregarding any break in service of less than three months) of at least twenty
(20) years, the Termination Date shall be the date specified in Section
4(b)(iv).

          (ii) If the Employee's employment with the Company and all
subsidiaries terminates by reason of retirement after reaching age 55 and after
having been employed by the Company or any subsidiary for an aggregate period of
at least seven (7) years, without creating any implication that the Committee
may not act in other cases, the Committee may take action in its sole discretion
to provide that the Stock Option, or a portion thereof determined by the
Committee, shall become vested upon the Employee's death, shall continue to vest
during the balance of the vesting period and shall continue to be exercisable
after termination of employment, all as contemplated in Subsection 4(e)(i) above
if the Employee complies with the conditions in clauses (x) and (y) of
Subsection 4(e)(i).

          (iii) If the Employee enters into a noncompetition agreement
contemplated by Subsection 4(e)(i) or (ii) and thereafter breaches the terms
thereof, the Termination Date shall occur on the date of the breach and any
portion of the Stock Option that is not then vested shall not become exercisable
or vested thereafter.

     5. Nothing herein contained shall confer upon the Employee the right to
continue in the employment of the Company or affect the right of the Company to
terminate the Employee's employment at any time, or permit the exercise of the
Stock Option as a result of the Company electing to terminate at any time the
employment of the Employee subject, however, to the provisions of any agreement
of employment between the Company and the Employee. The Employee acknowledges
that a termination of employment could occur at a time at which the portion of
the Stock Option that is not exercisable or vested could have substantial value
and that as a result of such termination, the Employee will not be able to
realize such value nor will the Employee be entitled to any compensation on
account of such value. In addition, the Employee acknowledges that a termination
of employment will likely cause the vested but unexercised portion of the Stock
Option to terminate earlier than it otherwise would, with the result that the
value to the Employee of having a longer exercise period will be lost without
any compensation to the Employee on account of such loss.

     6. In the event of any change in the outstanding shares of the Company
("capital adjustment") for any reason, including but not limited to, any stock
split, stock dividend, recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other similar event, an adjustment in the
number or kind of shares of Common Stock subject to the Stock Option, the Option
Price under the Stock Option shall be made by the Committee in a manner
consistent with such capital adjustment. The determination of the Committee as
to any such adjustment shall be conclusive and binding for all purposes of this
Stock Option Agreement.

     7. Notwithstanding any provision of this Stock Option Agreement to the
contrary, the Committee may take whatever action it may consider necessary or
appropriate to comply with the Securities Act of 1933, as amended, or any other
applicable securities law, including limiting the exercisability of the Stock
Option or the issuance of Option Shares hereunder.

                                      -4-

<PAGE>

     8. The Stock Option may not be exercised if the issuance of such Option
Shares upon such exercise would constitute a violation of any applicable Federal
or state securities law or other law or regulation. As a condition to the
exercise of the Stock Option, the Company may require the Employee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.

     9. Except as herein otherwise provided or as otherwise permitted by the
Committee, the Stock Option and any rights and privileges conferred by this
Stock Option Agreement shall not be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment, or similar process. Upon any attempt so to
transfer, assign, pledge, hypothecate, or otherwise dispose of the Stock Option,
or of any right or privilege conferred hereby, contrary to the provisions
hereof, or upon the levy of an attachment or similar process upon the rights and
privileges conferred hereby, the Stock Option and the rights and privileges
conferred hereby shall immediately become null and void.

     10. The Stock Option shall be deemed to have been granted pursuant to the
Plan and is subject to the terms and provisions thereof. In the event of any
conflict between the terms hereof and the provisions of the Plan, the terms and
conditions of the Plan shall prevail. Any and all terms used herein, unless
otherwise specifically defined herein, shall have the meaning ascribed to them
in the Plan. A copy of the Plan is available on request of the Employee made in
writing or by e-mail to the Company's Secretary.

     11. This Stock Option Agreement shall be binding upon and inure to the
benefit of the parties hereto and any successors to the business of the Company,
but neither this Stock Option Agreement nor any rights hereunder shall be
assignable by the Employee, except as may be permitted pursuant to Section 9
above.

     12. All decisions or interpretations of the Committee with respect to any
question arising under the Plan or under this Stock Option Agreement shall be
binding, conclusive and final. As a condition of the granting of the Stock
Option, the Employee agrees, for himself and his personal representatives, that
any dispute or disagreement which may arise under or as a result of or pursuant
to this Stock Option Agreement shall be determined by the Committee in its sole
discretion, and that any interpretation or determination by the Committee shall
be final, binding and conclusive. Such determinations need not be uniform and
may be made differently by the Committee with respect to other employees of the
Company who are, have been, or will be granted stock options by the Company.

     13. The waiver by the Company of any provision of this Stock Option
Agreement shall not operate as or be construed to be a subsequent waiver of the
same provisions or waiver of any other provision hereof.

     14. Except as herein otherwise provided, the Stock Option shall be
irrevocable before the Termination Date and its validity and construction shall
be governed by the laws of the State of Wisconsin (excluding the conflict of
laws provisions of such laws).


                                      -5-

<PAGE>

     15. As a condition to the grant of the Stock Option, Employee must execute
an agreement not to compete in the form provided to the Employee by the Company.

     The end of Paragraph 15 is the end of the Incorporated Terms. The remainder
of the Agreement is contained in the Base Instrument.


                                      -6-

<PAGE>


                                      ANNEX

       Definition of "Change in Control of the Company" and Related Terms


     1. Change in Control of the Company. A "Change in Control of the Company"
shall be deemed to have occurred if an event set forth in any one of the
following paragraphs shall have occurred:

          (i) any Person (other than (A) the Company or any of its subsidiaries,
     (B) a trustee or other fiduciary holding securities under any employee
     benefit plan of the Company or any of its subsidiaries, (C) an underwriter
     temporarily holding securities pursuant to an offering of such securities
     or (D) a corporation owned, directly or indirectly, by the shareholders of
     the Company in substantially the same proportions as their ownership of
     stock in the Company ("Excluded Persons")) is or becomes the Beneficial
     Owner, directly or indirectly, of securities of the Company (not including
     in the securities beneficially owned by such Person any securities acquired
     directly from the Company or its Affiliates after July 22, 1999, pursuant
     to express authorization by the Board of Directors of the Company (the
     "Board") that refers to this exception) representing 50% or more of either
     the then outstanding shares of common stock of the Company or the combined
     voting power of the Company's then outstanding voting securities entitled
     to vote generally in the election of directors; or

          (ii) the following individuals cease for any reason to constitute a
     majority of the number of directors of the Company then serving: (A)
     individuals who, on July 22, 1999, constituted the Board and (B) any new
     director (other than a director whose initial assumption of office is in
     connection with an actual or threatened election contest, including but not
     limited to a consent solicitation, relating to the election of directors of
     the Company, as such terms are used in Rule 14a-11 of Regulation 14A under
     the Act) whose appointment or election by the Board or nomination for
     election by the Company's shareholders was approved by a vote of at least
     two-thirds (2/3) of the directors then still in office who either were
     directors on July 22, 1999, or whose initial appointment, election or
     nomination for election as a director which occurred after July 22, 1999
     was approved by such vote of the directors then still in office at the time
     of such initial appointment, election or nomination who were themselves
     either directors on July 22, 1999 or initially appointed, elected or
     nominated by such two-thirds (2/3) vote as described above ad infinitum
     (collectively the "Continuing Directors"); provided, however, that
     individuals who are appointed to the Board pursuant to or in accordance
     with the terms of an agreement relating to a merger, consolidation, or
     share exchange involving the Company (or any direct or indirect subsidiary
     of the Company) shall not be Continuing Directors for purposes of this
     Agreement until after such individuals are first nominated for election by
     a vote of at least two-thirds (2/3) of the then Continuing Directors and
     are thereafter elected as directors by the shareholders of the Company at a
     meeting of shareholders held 

                              Annex - Page 1 of 3

<PAGE>

     following consummation of such merger, consolidation, or share exchange;
     and, provided further, that in the event the failure of any such persons
     appointed to the Board to be Continuing Directors results in a Change in
     Control of the Company, the subsequent qualification of such persons as
     Continuing Directors shall not alter the fact that a Change in Control of
     the Company occurred; or

          (iii) a merger, consolidation or share exchange of the Company with
     any other corporation is consummated or voting securities of the Company
     are issued in connection with a merger, consolidation or share exchange of
     the Company (or any direct or indirect subsidiary of the Company) pursuant
     to applicable stock exchange requirements, other than (A) a merger,
     consolidation or share exchange which would result in the voting securities
     of the Company entitled to vote generally in the election of directors
     outstanding immediately prior to such merger, consolidation or share
     exchange continuing to represent (either by remaining outstanding or by
     being converted into voting securities of the surviving entity or any
     parent thereof) at least 50% of the combined voting power of the voting
     securities of the Company or such surviving entity or any parent thereof
     entitled to vote generally in the election of directors of such entity or
     parent outstanding immediately after such merger, consolidation or share
     exchange, or (B) a merger, consolidation or share exchange effected to
     implement a recapitalization of the Company (or similar transaction) in
     which no Person (other than an Excluded Person) is or becomes the
     Beneficial Owner, directly or indirectly, of securities of the Company (not
     including in the securities beneficially owned by such Person any
     securities acquired directly from the Company or its Affiliates after July
     22, 1999, pursuant to express authorization by the Board that refers to
     this exception) representing at least 50% of the combined voting power of
     the Company's then outstanding voting securities entitled to vote generally
     in the election of directors; or

          (iv) the sale or disposition by the Company of all or substantially
     all of the Company's assets (in one transaction or a series of related
     transactions within any period of 24 consecutive months), other than a sale
     or disposition by the Company of all or substantially all of the Company's
     assets to an entity of which at least 75% of the combined voting power of
     the voting securities entitled to vote generally in the election of
     directors immediately after such sale are owned by Persons in substantially
     the same proportions as their ownership of the Company immediately prior to
     such sale.

     2. Related Definitions. For purposes of this Annex, the following terms,
when capitalized, shall have the following meanings:

          (i) Act. The term "Act" means the Securities Exchange Act of 1934, as
     amended.

          (ii) Affiliate and Associate. The terms "Affiliate" and "Associate"
     shall have the respective meanings ascribed to such terms in Rule l2b-2 of
     the General Rules and Regulations under the Act.

                              Annex - Page 2 of 3

<PAGE>


          (iii)Beneficial Owner. A Person shall be deemed to be the "Beneficial
     Owner" of any securities:

                    (a) which such Person or any of such Person's Affiliates or
          Associates has the right to acquire (whether such right is exercisable
          immediately or only after the passage of time) pursuant to any
          agreement, arrangement or understanding, or upon the exercise of
          conversion rights, exchange rights, rights, warrants or options, or
          otherwise; provided, however, that a Person shall not be deemed the
          Beneficial Owner of, or to beneficially own, (A) securities tendered
          pursuant to a tender or exchange offer made by or on behalf of such
          Person or any of such Person's Affiliates or Associates until such
          tendered securities are accepted for purchase, or (B) securities
          issuable upon exercise of Rights issued pursuant to the terms of the
          Company's Rights Agreement, dated as of July 22, 1999, between the
          Company and Firstar Bank Milwaukee, N.A., as amended from time to time
          (or any successor to such Rights Agreement), at any time before the
          issuance of such securities;

                    (b) which such Person or any of such Person's Affiliates or
          Associates, directly or indirectly, has the right to vote or dispose
          of or has "beneficial ownership" of (as determined pursuant to Rule
          l3d-3 of the General Rules and Regulations under the Act), including
          pursuant to any agreement, arrangement or understanding; provided,
          however, that a Person shall not be deemed the Beneficial Owner of, or
          to beneficially own, any security under this Subsection 1 (c) as a
          result of an agreement, arrangement or understanding to vote such
          security if the agreement, arrangement or understanding: (A) arises
          solely from a revocable proxy or consent given to such Person in
          response to a public proxy or consent solicitation made pursuant to,
          and in accordance with, the applicable rules and regulations under the
          Act and (B) is not also then reportable on a Schedule l3D under the
          Act (or any comparable or successor report); or

                    (c) which are beneficially owned, directly or indirectly, by
          any other Person with which such Person or any of such Person's
          Affiliates or Associates has any agreement, arrangement or
          understanding for the purpose of acquiring, holding, voting (except
          pursuant to a revocable proxy as described in Subsection 1(c) (ii)
          above) or disposing of any voting securities of the Company.

          (iv) Person. The term "Person" shall mean any individual, firm,
     partnership, corporation or other entity, including any successor (by
     merger or otherwise) of such entity, or a group of any of the foregoing
     acting in concert.

                               Annex - Page 3 of 3


                                                                    EXHIBIT 10.2





                           RESTRICTED STOCK AGREEMENT

     THIS RESTRICTED STOCK AGREEMENT is made and entered into as of the date
indicated on the signature page under "Date of Agreement" by and between MGIC
Investment Corporation, a Wisconsin corporation (the "Company"), and the
employee of Mortgage Guaranty Insurance Corporation whose signature is set forth
on the signature page hereto (the "Employee").

                                  INTRODUCTION

     The Company is awarding shares of the Company's Common Stock, $1.00 par
value per share (the "Stock"), to the Employee under the MGIC Investment
Corporation 2002 Stock Incentive Plan, (the "Plan") and this Agreement.

     This Agreement consists of this instrument and the Incorporated Terms Dated
As of _________________ to Restricted Stock Agreement (the "Incorporated
Terms"), which although not attached to this instrument, are part of this
Agreement and were provided to the Employee as indicated in Paragraph 1(b)
below.

     The parties mutually agree as follows:

     1.   Award of Restricted Stock; Incorporated Terms.

     (a) Subject to the terms and conditions set forth herein, the Company
awards the Employee the number of shares of Stock as follows: the number of
shares set forth after "Shares of Base Restricted Stock" on the signature page
shall be the "Base Restricted
 Stock"; the number of shares set forth after
"Shares of Matching Restricted Stock" on the signature page shall be the
"Matching Restricted Stock"; and the number of shares set forth after "Shares of
Performance Restricted Stock" shall be the "Performance Restricted Stock." The
term "Restricted Stock" as used in the remainder of this Agreement shall be
applied separately to the Base Restricted Stock, the Matching Restricted Stock
and the Performance Restricted Stock as if the term "Restricted Stock" were the
term "Base Restricted Stock," "Matching Restricted Stock," or "Performance
Restricted Stock," as the case may be.

     (b) The Incorporated Terms are incorporated in this instrument with the
same effect as if they were physically set forth in this instrument. The
Incorporated Terms and this instrument constitute a single agreement which is
referred to as "this Agreement." The terms "herein," "hereof," "above" and
similar terms used in this Agreement refer to this Agreement as a whole. The
Incorporated Terms were attached to an e-mail sent in ________________________
to the Employee from the Company's Secretary which included other documents
relating to the Restricted Stock. The Company is hereby advising the Employee to
print and retain a copy of the Incorporated Terms. The Employee agrees if there
is any difference between the text of the Incorporated Terms obtained as
indicated above and the text of the Incorporated Terms retained by the Company's
Secretary in connection with the _______________________ meeting of 


<PAGE>

the Management Development Committee, the text of the copy retained by the
Secretary will control.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and the Employee has hereunto affixed his hand and
seal, all as of the day and year set forth below.

                  Date of Agreement:        As of ____________________

                                        MGIC INVESTMENT CORPORATION


                                        By:_____________________________________
                                        Title:  President and Chief 
                                                Executive Officer

         Sign Here:        >            __________________________________(SEAL)
                                        Name:

                                        Shares of Base Restricted Stock:
                             
                                        __________________

                                        Shares of Matching Restricted Stock:

                                        __________________

                                        Shares of Performance Restricted Stock:

                                        __________________

                                        Base Restricted Stock
                                        Release Date:

                                        Matching Restricted Stock
                                        Release Date:

                                        Performance Restricted Stock
                                        Release Date:

                                        Target:

                                                  * * * *

                                        Beneficiary: ___________________________

                                        Address of Beneficiary:

                                        ________________________________________

                                        ________________________________________





                                        Beneficiary Tax Identification
                                        No:_____________________________________
                                           


                                      -2-


                                                                  EXHIBIT 10.2.1





                               INCORPORATED TERMS
                           DATED AS OF ______________
                                       TO
                           RESTRICTED STOCK AGREEMENT


     The following are the "Incorporated Terms" referred to in the instrument
entitled "Restricted Stock Agreement" which refers to these Incorporated Terms
and which has been signed by the Company and the Employee (the "Base
Instrument"). The Incorporated Terms and the Base Instrument constitute a single
agreement and that agreement consists of the Base Instrument and the
Incorporated Terms. The Incorporated Terms dovetail with the Base Instrument;
because the last paragraph of the Base Instrument is Paragraph 1, the
Incorporated Terms begin with Paragraph 2.

     2. Restrictions. (a) Except as otherwise provided herein, the Base
Restricted Stock and the Matching Restricted Stock may not be sold, transferred
or otherwise alienated or hypothecated until, in the case of the Base Restricted
Stock, the date set forth after "Base Restricted Stock Release Date" on the
signature page, and in the case of the Matching Restricted Stock, the date set
forth after "Matching Restricted Stock Release Date" on the signature page. The
term "Release Date" shall be applied separately to the Base Restricted Stock and
the Matching Restricted Stock as if the
 term "Release Date" were the term "Base
Restricted Stock Release Date" or the term "Matching Restricted Stock Release
Date," and such application shall correspond to the application of the term
"Restricted Stock" as set forth in Paragraph 1(a) of the Base Instrument.

     (b) Except as otherwise provided herein, the Performance Restricted Stock
may not be sold, transferred or otherwise alienated or hypothecated until the
Release Date determined as follows. For each date set forth after "Performance
Restricted Stock Release Date" on the signature page, multiply the number of
shares set forth after "Shares of Performance Restricted Stock" on the signature
page by the quotient of dividing the EPS for the fiscal year of the Company
ended on the December 31 immediately preceding such date by the amount set forth
after "Target" on the signature page. The resulting product is the number of
shares of Restricted Stock that shall be released on the corresponding date set
forth after "Performance Restricted Stock Release Date" and such date shall be
the Release Date for such shares (and only for such shares). "EPS" means the
Company's diluted earnings per share, determined in accordance with generally
accepted accounting principles and adjusted to exclude the after-tax effect of
(i) realized gains and losses, and (ii) extraordinary items. If by any date set
forth after "Performance Restricted Stock Release Date" the Company has not
publicly announced its diluted earnings per share, such date shall be two
business days after such earnings are publicly announced.

     3. Escrow. Shares of Restricted Stock shall be issued (in certificate or
electronic form, at the discretion of the Company) as soon as practicable in the
name of the Employee but shall be held in an escrow arrangement by the transfer
agent for the Stock, as escrow agent. The Employee shall give the Company a
stock power for such Stock duly 


<PAGE>

endorsed in blank which will be held in escrow for use in the event such Stock
is forfeited in whole or in part. Unless forfeited as provided herein,
Restricted Stock shall cease to be held in escrow and certificates for such
Stock shall be delivered to the Employee, or in the case of his death, to his
Beneficiary (as hereinafter defined) on the Release Date or upon any other
termination of the restrictions imposed by Paragraph 2 hereof.

     4. Transfer After Release Date; Securities Law Restrictions. Except as
otherwise provided herein, Restricted Stock shall become free of the
restrictions of Paragraph 2 and be freely transferable by the Employee on the
Release Date. Notwithstanding the foregoing or anything to the contrary herein,
the Employee agrees and acknowledges with respect to any Restricted Stock that
has not been registered under the Securities Act of 1933, as amended (the "Act")
(i) he will not sell or otherwise dispose of such Stock except pursuant to an
effective registration statement under the Act and any applicable state
securities laws, or in a transaction which, in the opinion of counsel for the
Company, is exempt from such registration, and (ii) a legend will be placed on
the certificates or other evidence for the Restricted Stock to such effect.

     5. Termination of Employment Due to Death. If the Employee's employment
with the Company or any of its subsidiaries is terminated because of death prior
to the Release Date, the restrictions of Paragraph 2 applicable to the
Restricted Stock shall terminate on the date of death and such Restricted Stock
shall be free of such restrictions and, except as otherwise provided in
Paragraph 4 hereof, freely transferable.

     6. Forfeiture of Restricted Stock. (a) If the Employee's employment with
the Company and all of its subsidiaries is terminated prior to the Release Date
for any reason (including without limitation, disability or termination by the
Company and all subsidiaries thereof, with or without cause) other than death,
all Restricted Stock shall be forfeited to the Company on the date of such
termination unless otherwise provided in subparagraph (b) below, or unless the
Management Development, Nominating and Governance Committee of the Company's
Board of Directors (the "Management Development Committee") or other Committee
of such Board administering the Plan (the Management Development Committee or
such other Committee is herein referred to as the "Committee") determines, on
such terms and conditions, if any, as the Committee may impose, that all or a
portion of the Restricted Stock shall be released to the Employee and the
restrictions of Paragraph 2 applicable thereto shall terminate. Absence of the
Employee on leave approved by a duly elected officer of the Company, other than
the Employee, shall not be considered a termination of employment during the
period of such leave.

     (b) If the Employee's employment with the Company and all of its
subsidiaries terminates by reason of retirement after reaching age 62 and after
having been employed by the Company or any subsidiary thereof for an aggregate
period of at least seven years, such retirement shall not result in forfeiture
of the Performance Restricted Stock (this provision does not apply to the Base
or Matching Restricted Stock) if no later than the date on which employment
terminates, the Employee enters into an agreement with the Company (which
agreement shall be drafted by and acceptable to the Company) under which the
Employee agrees not to compete with the Company and its subsidiaries during a
period ending one year after the 

                                      -2-

<PAGE>

latest date set forth after "Performance Restricted Stock Release Date" on the
signature page and the Employee complies with such agreement. If the Employee
enters into such a non-competition agreement and thereafter breaches the terms
thereof, the Restricted Stock shall be forfeited. If the conditions in the
second preceding sentence are satisfied and the Employee complies with the terms
of such agreement, upon the Employee's death, the provisions of Paragraph 5
shall apply as if the Employee's employment with the Company and its
subsidiaries terminated because of such death.

     (c) Any shares of the Performance Restricted Stock for which a Release Date
has not occurred by the latest date set forth after "Performance Restricted
Stock Release Date" on the signature page (such date being subject to extension
as contemplated in the last sentence of paragraph 2(b)) shall be forfeited to
the Company, unless the Committee determines otherwise as contemplated in
subparagraph (a) above.

     (d) If Restricted Stock is forfeited, the Employee hereby appoints the
Company, acting through any Senior Vice President or more senior officer, as the
Employee's attorney-in-fact to transfer such forfeited Restricted Stock to the
Company.

     7. Beneficiary. (a) The person whose name appears on the signature page
hereof after the caption "Beneficiary" or any successor designated by the
Employee in accordance herewith (the person who is the Employee's Beneficiary at
the time of his death herein referred to as the "Beneficiary") shall be entitled
to receive the Restricted Stock to be released to the Beneficiary under
Paragraphs 3 and 5 as a result of the death of the Employee. The Employee may
from time to time revoke or change his Beneficiary without the consent of any
prior Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Employee's death, and in no event shall
any designation be effective as of a date prior to such receipt.

     (b) If no such Beneficiary designation is in effect at the time of an
Employee's death, or if no designated Beneficiary survives the Employee or if
such designation conflicts with law, the Employee's estate shall be entitled to
receive the Restricted Stock upon the death of the Employee. If the Committee is
in doubt as to the right of any person to receive such Restricted Stock, the
Company may retain such Stock and any distributions thereon, without liability
for any interest thereon, until the Committee determines the person entitled
thereto, or the Company may deliver such Restricted Stock and any distributions
thereon to any court of appropriate jurisdiction and such delivery shall be a
complete discharge of the liability of the Company therefor.

     8. Restricted Stock Legend. In addition to any legends placed on
certificates for Restricted Stock, each certificate or other evidence for shares
of Restricted Stock shall bear the following legend:

     "The sale or other transfer of these shares of stock, whether voluntary, or
     by operation of law, is subject to certain restrictions set forth in the
     MGIC 

                                      -3-

<PAGE>

     Investment Corporation 2002 Stock Incentive Plan and a Restricted Stock
     Agreement between MGIC Investment Corporation and the registered owner
     hereof. A copy of such Plan and such Agreement may be obtained from the
     Secretary of MGIC Investment Corporation."

When the restrictions imposed by Paragraph 2 hereof terminate, the Employee
shall be entitled to have the foregoing legend removed from such Stock.

     9. Voting Rights; Dividends and Other Distributions. (a) While the
Restricted Stock is subject to restrictions under Paragraph 2 and prior to any
forfeiture thereof, the Employee may exercise full voting rights for the
Restricted Stock.

     (b) While the Restricted Stock is subject to the restrictions under
Paragraph 2 and prior to any forfeiture thereof, the Employee shall be entitled
to receive all dividends and other distributions paid with respect to the
Restricted Stock. If any such dividends or distributions are paid in Stock, such
shares shall be subject to the same restrictions as the shares of Restricted
Stock with respect to which they were paid, including the requirement that
Restricted Stock be held in escrow pursuant to Paragraph 3 hereof.

     (c) Subject to the provisions of this Agreement, the Employee shall have,
with respect to the Restricted Stock, all other rights of holders of Stock.

     10. Tax Withholding. (a) It shall be a condition of the obligation of the
Company or release from escrow Restricted Stock to the Employee or the
Beneficiary, and the Employee agrees, that the Employee shall pay to the Company
upon its demand, such amount as may be requested by the Company for the purpose
of satisfying its liability to withhold federal, state, or local income or other
taxes incurred by reason of the award of the Restricted Stock or as a result of
the termination of the restrictions on such Stock hereunder.

     (b) If the Employee does not make an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended, with respect to the Restricted Stock
awarded hereunder, the Employee may satisfy the Company's withholding tax
requirements by electing to have the Company withhold that number of shares of
Restricted Stock otherwise deliverable to the Employee from escrow hereunder or
to deliver to the Company a number of shares of Stock, in each case, having a
Fair Market Value on the day prior to the Tax Date (as defined below) equal to
the amount required to be withheld as a result of the termination of the
restrictions on such Restricted Stock. The election must be in writing and be
delivered to the Company prior to the Tax Date. If the number of shares so
calculated to be withheld shall include a fractional share, the Employee shall
deliver cash in lieu of such fractional share. All elections shall be made in a
form approved by the Company. As used herein, "Tax Date" means the date on which
the Employee must include in his gross income for federal income tax purposes
the fair market value of the Restricted Stock over the purchase price therefor.

     11. Adjustments in Event of Change in Stock or Fiscal Year. In the event of
any change in the outstanding shares of Stock ("capital adjustment") for any
reason, including 

                                      -4-

<PAGE>

but not limited to, any stock splits, stock dividend, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares or other
similar event which, in the judgment of the Committee, could distort the
implementation of the award of Restricted Stock or the realization of its
objectives, the Committee may make such adjustments in the shares of Restricted
Stock subject to this Agreement, or in the terms, conditions or restrictions of
this Agreement, including the Target set forth on the signature page, as the
Committee deems equitable. In addition, if the Company changes its fiscal year
from a year ending December 31, the Committee may make such adjustments in the
Performance Restricted Stock Release Date and the Target as the Committee deems
equitable.

     12. Change in Control. If a "Change in Control of the Company" (as defined
in the Annex attached hereto) occurs, notwithstanding anything herein, the
restrictions of Paragraph 2 applicable to the Restricted Stock shall terminate
on the date of the Change in Control of the Company.

     13. Powers of Company Not Affected; No Right to Continued Employment.

     (a) The existence of the Restricted Stock shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any
combination, subdivision or reclassification of the Stock or any reorganization,
merger, consolidation, business combination, exchange of shares, or other change
in the Company's capital structure or its business, or any issue of bonds,
debentures or stock having rights or preferences equal, superior or affecting
the Restricted Stock or the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise. The determination of the Committee as to any such adjustment shall be
conclusive and binding for all purposes of this Agreement.

     (b) Nothing herein contained shall confer upon the Employee any right to
continue in the employment of the Company or any subsidiary or interfere with or
limit in any way the right of the Company or any subsidiary to terminate the
Employee's employment at any time, subject, however, to the provisions of any
agreement of employment between the Company or any subsidiary and the Employee.
The Employee acknowledges that a termination of his or her employment could
occur at a time before which the restrictions referred to in Paragraph 2 above
have lapsed, resulting in the forfeiture of the Restricted Stock by the
Employee, unless otherwise provided herein. In such event, the Employee will not
be able to realize the value of the Restricted Stock nor will the Employee be
entitled to any compensation on account of such value.

     14. Interpretation by Committee. The Employee agrees that any dispute or
disagreement which may arise in connection with this Agreement shall be resolved
by the Committee, in its sole discretion, and that any interpretation by the
Committee of the terms of this Agreement or the Plan and any determination made
by the Committee under this Agreement or the Plan may be made in the sole
discretion of the Committee and shall be final, binding, and 

                                      -5-

<PAGE>

conclusive. Any such determination need not be uniform and may be made
differently among Employees awarded Restricted Stock.

     15. Miscellaneous. (a) This Agreement shall be governed and construed in
accordance with the laws of the State of Wisconsin applicable to contracts made
and to be performed therein between residents thereof.

     (b) The waiver by the Company of any provision of this Agreement shall not
operate or be construed to be a subsequent waiver of the same provision or
waiver of any other provision hereof.

     (c) The Restricted Stock shall be deemed to have been awarded pursuant to
the Plan and is subject to the terms and conditions thereof. In the event of any
conflict between the terms hereof and the provisions of the Plan, the terms and
conditions of the Plan shall prevail. Any and all terms used herein, unless
specifically defined herein shall have the meaning ascribed to them in the Plan.
A copy of the Plan is available on request of the Employee made in writing or by
e-mail to the Company's Secretary.

     (d) Any notice, filing or delivery hereunder or with respect to Restricted
Stock shall be given to the Employee at either his usual work location or his
home address as indicated in the records of the Company, and shall be given to
the Committee or the Company at 250 East Kilbourn Avenue, Milwaukee 53202,
Attention: Secretary. All such notices shall be given by first class mail,
postage pre-paid, or by personal delivery.

     (e) This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns and shall be binding upon and inure to
the benefit of the Employee, the Beneficiary and the personal representative(s)
and heirs of the Employee, except that the Employee may not transfer any
interest in any Restricted Stock prior to the release of the restrictions
imposed by Paragraph 2.

     (f) As a condition to the grant of the Restricted Stock, Employee must
execute an agreement not to compete in the form provided to the Employee by the
Company.

     The end of Paragraph 15 is the end of the Incorporated Terms. The remainder
of the Agreement is contained in the Base Instrument.


                                      -6-

<PAGE>




                                      ANNEX

       Definition of "Change in Control of the Company" and Related Terms


     1 Change in Control of the Company. A "Change in Control of the Company"
shall be deemed to have occurred if an event set forth in any one of the
following paragraphs shall have occurred:

          (i) any Person (other than (A) the Company or any of its subsidiaries,
     (B) a trustee or other fiduciary holding securities under any employee
     benefit plan of the Company or any of its subsidiaries, (C) an underwriter
     temporarily holding securities pursuant to an offering of such securities
     or (D) a corporation owned, directly or indirectly, by the shareholders of
     the Company in substantially the same proportions as their ownership of
     stock in the Company ("Excluded Persons")) is or becomes the Beneficial
     Owner, directly or indirectly, of securities of the Company (not including
     in the securities beneficially owned by such Person any securities acquired
     directly from the Company or its Affiliates after July 22, 1999, pursuant
     to express authorization by the Board of Directors of the Company (the
     "Board") that refers to this exception) representing 50% or more of either
     the then outstanding shares of common stock of the Company or the combined
     voting power of the Company's then outstanding voting securities entitled
     to vote generally in the election of directors; or

          (ii) the following individuals cease for any reason to constitute a
     majority of the number of directors of the Company then serving: (A)
     individuals who, on July 22, 1999, constituted the Board and (B) any new
     director (other than a director whose initial assumption of office is in
     connection with an actual or threatened election contest, including but not
     limited to a consent solicitation, relating to the election of directors of
     the Company, as such terms are used in Rule 14a-11 of Regulation 14A under
     the Act) whose appointment or election by the Board or nomination for
     election by the Company's shareholders was approved by a vote of at least
     two-thirds (2/3) of the directors then still in office who either were
     directors on July 22, 1999, or whose initial appointment, election or
     nomination for election as a director which occurred after July 22, 1999
     was approved by such vote of the directors then still in office at the time
     of such initial appointment, election or nomination who were themselves
     either directors on July 22, 1999 or initially appointed, elected or
     nominated by such two-thirds (2/3) vote as described above ad infinitum
     (collectively the "Continuing Directors"); provided, however, that
     individuals who are appointed to the Board pursuant to or in accordance
     with the terms of an agreement relating to a merger, consolidation, or
     share exchange involving the Company (or any direct or indirect subsidiary
     of the Company) shall not be Continuing Directors for purposes of this
     Agreement until after such individuals are first nominated for election by
     a vote of at least 

                               Annex - Page 1 of 4

<PAGE>

     two-thirds (2/3) of the then Continuing Directors and are thereafter
     elected as directors by the shareholders of the Company at a meeting of
     shareholders held following consummation of such merger, consolidation, or
     share exchange; and, provided further, that in the event the failure of any
     such persons appointed to the Board to be Continuing Directors results in a
     Change in Control of the Company, the subsequent qualification of such
     persons as Continuing Directors shall not alter the fact that a Change in
     Control of the Company occurred; or

          (iii) a merger, consolidation or share exchange of the Company with
     any other corporation is consummated or voting securities of the Company
     are issued in connection with a merger, consolidation or share exchange of
     the Company (or any direct or indirect subsidiary of the Company) pursuant
     to applicable stock exchange requirements, other than (A) a merger,
     consolidation or share exchange which would result in the voting securities
     of the Company entitled to vote generally in the election of directors
     outstanding immediately prior to such merger, consolidation or share
     exchange continuing to represent (either by remaining outstanding or by
     being converted into voting securities of the surviving entity or any
     parent thereof) at least 50% of the combined voting power of the voting
     securities of the Company or such surviving entity or any parent thereof
     entitled to vote generally in the election of directors of such entity or
     parent outstanding immediately after such merger, consolidation or share
     exchange, or (B) a merger, consolidation or share exchange effected to
     implement a recapitalization of the Company (or similar transaction) in
     which no Person (other than an Excluded Person) is or becomes the
     Beneficial Owner, directly or indirectly, of securities of the Company (not
     including in the securities beneficially owned by such Person any
     securities acquired directly from the Company or its Affiliates after July
     22, 1999, pursuant to express authorization by the Board that refers to
     this exception) representing at least 50% of the combined voting power of
     the Company's then outstanding voting securities entitled to vote generally
     in the election of directors; or

          (iv) the sale or disposition by the Company of all or substantially
     all of the Company's assets (in one transaction or a series of related
     transactions within any period of 24 consecutive months), other than a sale
     or disposition by the Company of all or substantially all of the Company's
     assets to an entity of which at least 75% of the combined voting power of
     the voting securities entitled to vote generally in the election of
     directors immediately after such sale are owned by Persons in substantially
     the same proportions as their ownership of the Company immediately prior to
     such sale.

     2 Related Definitions. For purposes of this Annex, the following terms,
when capitalized, shall have the following meanings:

          (i) Act. The term "Act" means the Securities Exchange Act of 1934, as
     amended.


                               Annex - Page 2 of 4

<PAGE>

          (ii) Affiliate and Associate. The terms "Affiliate" and "Associate"
     shall have the respective meanings ascribed to such terms in Rule l2b-2 of
     the General Rules and Regulations under the Act.


          (iii) Beneficial Owner. A Person shall be deemed to be the "Beneficial
     Owner" of any securities:

               (a) which such Person or any of such Person's Affiliates or
          Associates has the right to acquire (whether such right is exercisable
          immediately or only after the passage of time) pursuant to any
          agreement, arrangement or understanding, or upon the exercise of
          conversion rights, exchange rights, rights, warrants or options, or
          otherwise; provided, however, that a Person shall not be deemed the
          Beneficial Owner of, or to beneficially own, (A) securities tendered
          pursuant to a tender or exchange offer made by or on behalf of such
          Person or any of such Person's Affiliates or Associates until such
          tendered securities are accepted for purchase, or (B) securities
          issuable upon exercise of Rights issued pursuant to the terms of the
          Company's Rights Agreement, dated as of July 22, 1999, between the
          Company and Firstar Bank Milwaukee, N.A., as amended from time to time
          (or any successor to such Rights Agreement), at any time before the
          issuance of such securities;

               (b) which such Person or any of such Person's Affiliates or
          Associates, directly or indirectly, has the right to vote or dispose
          of or has "beneficial ownership" of (as determined pursuant to Rule
          l3d-3 of the General Rules and Regulations under the Act), including
          pursuant to any agreement, arrangement or understanding; provided,
          however, that a Person shall not be deemed the Beneficial Owner of, or
          to beneficially own, any security under this Subsection 1 (c) as a
          result of an agreement, arrangement or understanding to vote such
          security if the agreement, arrangement or understanding: (A) arises
          solely from a revocable proxy or consent given to such Person in
          response to a public proxy or consent solicitation made pursuant to,
          and in accordance with, the applicable rules and regulations under the
          Act and (B) is not also then reportable on a Schedule l3D under the
          Act (or any comparable or successor report); or

               (c) which are beneficially owned, directly or indirectly, by any
          other Person with which such Person or any of such Person's Affiliates
          or Associates has any agreement, arrangement or understanding for the
          purpose of acquiring, holding, voting (except pursuant to a revocable
          proxy as described in Subsection 1(c) (ii) above) or disposing of any
          voting securities of the Company.

                               Annex - Page 3 of 4

<PAGE>

               (iv) Person. The term "Person" shall mean any individual, firm,
          partnership, corporation or other entity, including any successor (by
          merger or otherwise) of such entity, or a group of any of the
          foregoing acting in concert.



                               Annex - Page 4 of 4


                                                                    EXHIBIT 10.6


                             EXECUTIVE BONUS PLAN OF
                           MGIC INVESTMENT CORPORATION
                                 (the "Company")


The Executive Bonus Plan of the Company in effect for 2002 (which is not
contained in a formal plan document), applied to certain officers of the
Company, including the executive officers of the Company identified in the Form
10-K for the year ended December 31, 2002. Under the Executive Bonus Plan, if
the Company achieved a minimum level of net income for 2002, an executive
officer was eligible for a bonus, depending upon the executive officer's
individual performance, of up to 120-200% of such executive officer's base
salary, depending on the maximum applicable to the executive officer. The
officer could elect to receive up to one-third of the bonus in restricted stock
of the Company that vested in one year. For each share of restricted stock so
elected, the Company awarded one and one-half shares of restricted stock that
vested in three years.




<TABLE>
<CAPTION>
                                                                                        EXHIBIT 11

                            MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
                         STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (1)
                        For The Years Ended December 31, 2002, 2001 and 2000

                                                          2002             2001             2000
                                                          ----             ----             ----
                                                          (In thousands, except per share data)
BASIC EARNINGS PER SHARE

<S>                                                         <C>              <C>              <C>    
Average common shares outstanding                           103,725          106,941          106,202
                                                     ===============  ===============  ===============

Net income                                           $      629,191   $      639,137   $      541,999
                                                     ===============  ===============  ===============

Net income per share                                 $         6.07   $         5.98   $         5.10
                                                     ===============  ===============  ===============

DILUTED EARNINGS PER SHARE

Adjusted shares outstanding:
   Average common shares outstanding                        103,725          106,941          106,202
   Net shares to be issued upon exercise of
       common stock equivalents                                 489              854            1,058
                                                     ---------------  ---------------  ---------------
   Adjusted shares outstanding                              104,214          107,795          107,260
                                                     ===============  ===============  ===============

Net income                                           $      629,191   $      639,137   $      541,999
                                                     ===============  ===============  ===============

Net income per share                                 $         6.04   $         5.93   $         5.05
                                                     ===============  ===============  ===============



(1) Per Statement of Financial Accounting Standards No. 128, "Earnings Per
Share".
</TABLE>





<TABLE>

                                                                                                         EXHIBIT 13


<CAPTION>

                MGIC INVESTMENT CORPORATION & SUBSIDIARIES -- YEARS ENDED DECEMBER 31, 2002, 2001, 2000, 1999 AND 1998
             ------------------------------------------------------------------------------------------------------------
                                             Five-Year Summary of Financial Information
             ------------------------------------------------------------------------------------------------------------



                                                    2002             2001            2000             1999            1998
                                                --------------   --------------  --------------   --------------  --------------

                                                                (In thousands of dollars, except per share data)
<S>                                             <C>              <C>             <C>              <C>             <C>          
Summary of Operations
Revenues:
   Net premiums written.......................  $   1,177,955    $   1,036,353   $     887,388    $     792,345   $     749,161
                                                ==============   ==============  ==============   ==============  ==============

   Net premiums earned........................  $   1,182,098    $   1,042,267   $     890,091    $     792,581   $     763,284
   Investment income, net.....................        207,516          204,393         178,535          153,071         143,019
   Realized investment gains, net.............         29,113           37,352           1,432            3,406          18,288
   Other revenue..............................        147,076           73,829          40,283           47,697          47,075
                                                --------------   --------------  --------------   --------------  --------------
     Total revenues...........................      1,565,803        1,357,841       1,110,341          996,755         971,666
                                                --------------   --------------  --------------   --------------  --------------

Losses and expenses:
   Losses incurred, net.......................        365,752          160,814          91,723           97,196         211,354
   Underwriting and other expenses............        265,633          234,494         177,837          198,147         187,103
   Interest expense...........................         36,776           30,623          28,759           20,402          18,624
   Litigation settlement......................              -                -          23,221                -               -
                                                --------------   --------------  --------------   --------------  --------------
     Total losses and expenses................        668,161          425,931         321,540          315,745         417,081
                                                --------------   --------------  --------------   --------------  --------------

Income before tax.............................        897,642          931,910         788,801          681,010         554,585
Provision for income tax......................        268,451          292,773         246,802          210,809         169,120
                                                --------------   --------------  --------------   --------------  --------------
Net income....................................  $     629,191    $     639,137   $     541,999    $     470,201   $     385,465
                                                ==============   ==============  ==============   ==============  ==============

Weighted average common shares outstanding (in
   thousands).................................        104,214          107,795         107,260          109,258         113,582
                                                ==============   ==============  ==============   ==============  ==============

Diluted earnings per share....................  $        6.04    $        5.93   $        5.05    $        4.30   $        3.39
                                                ==============   ==============  ==============   ==============  ==============

Dividends
 per share...........................  $         .10    $         .10   $         .10    $         .10   $         .10
                                                ==============   ==============  ==============   ==============  ==============

Balance sheet data
   Total investments..........................  $   4,726,472    $   4,069,447   $   3,472,195    $   2,789,734   $   2,779,706
   Total assets...............................      5,300,303        4,567,012       3,857,781        3,104,393       3,050,541
   Loss reserves..............................        733,181          613,664         609,546          641,978         681,274
   Short- and long-term debt..................        677,246          472,102         397,364          425,000         442,000
   Shareholders' equity.......................      3,395,192        3,020,187       2,464,882        1,775,989       1,640,591
   Book value per share.......................          33.87            28.47           23.07            16.79           15.05




-----------------------------------------------------------------------------------------------------------------------------

A brief description of the Company's business is contained in Note 1 to the Consolidated Financial Statements of the Company.

</TABLE>


                                                  -------------
                                                       one
                                                  -------------


<PAGE>


<TABLE>
<CAPTION>

                MGIC INVESTMENT CORPORATION & SUBSIDIARIES -- YEARS ENDED DECEMBER 31, 2002, 2001, 2000, 1999 AND 1998
             ------------------------------------------------------------------------------------------------------------
                                             Five-Year Summary of Financial Information
             ------------------------------------------------------------------------------------------------------------




                                                    2002             2001            2000             1999            1998
                                                --------------   --------------  --------------   --------------  --------------
<S>                                             <C>              <C>             <C>              <C>             <C>          
New primary insurance written ($ millions)....  $      92,532    $      86,122   $      41,546    $      46,953   $      43,697
New primary risk written ($ millions).........         23,403           21,038          10,353           11,422          10,850
New pool risk written ($ millions) (1)........            674              412             345              564             618

Insurance in force (at year-end) ($ millions)
   Direct primary insurance...................        196,988          183,904         160,192          147,607         137,990
   Direct primary risk........................         47,623           42,678          39,090           35,623          32,891
   Direct pool risk (1).......................          2,568            1,950           1,676            1,557           1,133

Primary loans in default ratios
   Policies in force..........................      1,655,887        1,580,283       1,448,348        1,370,020       1,320,994
   Loans in default...........................         73,648           54,653          37,422           29,761          29,253
   Percentage of loans in default.............         4.45%            3.46%           2.58%            2.17%           2.21%
   Percentage of loans in default-- bulk (2)..        10.09%            8.59%           9.02%            8.04%              -

Insurance operating ratios (GAAP)
   Loss ratio.................................         30.9%            15.4%           10.3%            12.3%           27.7%
   Expense ratio..............................         14.8%            16.5%           16.4%            19.7%           19.6%
                                                                 
                                                --------------   --------------  --------------   --------------  --------------
   Combined ratio.............................         45.7%            31.9%           26.7%            32.0%           47.3%
                                                ==============   ==============  ==============   ==============  ==============

Risk-to-capital ratio (statutory)
   MGIC.......................................          8.7:1            9.1:1          10.6:1           11.9:1          12.9:1


(1)  Represents contractual aggregate loss limits and, for the year ended December 31, 2002, for $3.0 billion
     of risk without such limits, risk is calculated at $276 million for new risk written and $274 million for
     risk in force, the estimated amount that would credit enhance these loans to a `AA' level.

(2)  Information relating to bulk defaults in 1998 is not separately presented and is not material.

</TABLE>


                                                  -------------
                                                       two
                                                  -------------


<PAGE>

 -----------------------------------------------------------------------------

                      Management's Discussion and Analysis
 -----------------------------------------------------------------------------

Results of Consolidated Operations
2002 Compared with 2001

Net income for 2002 was $629.2 million, compared to $639.1 million in 2001, a
decrease of 2%. Diluted earnings per share for 2002 was $6.04 compared with
$5.93 in 2001. Adjusted weighted average diluted shares outstanding for the
years ended December 31, 2002 and 2001 were 104.2 million and 107.8 million,
respectively. As used in this report, the term "Company" means the Company and
its consolidated subsidiaries, which do not include less than majority owned
joint ventures in which the Company has an equity interest.

Total revenues for 2002 were $1,565.8 million, an increase of 15% from the
$1,357.8 million for 2001. This increase was primarily attributed to increases
in net premiums earned and other revenue. See below for a further discussion of
premiums and other revenue.

Losses and expenses for 2002 were $668.2 million, an increase of 57% from $425.9
million for 2001. The increase from last year can be attributed to a 127%
increase in losses incurred, which primarily related to increases in delinquent
loans and paid losses, and an aggregate increase in underwriting and interest
expenses of 14%, which related to increases in insured volume and debt
outstanding. See below for a further discussion of losses incurred and expenses.

The amount of new primary insurance written by MGIC during 2002 was $92.5
billion, compared to $86.1 billion in 2001, an increase of $6.4 billion. New
insurance written in the bulk channel declined $3.2 billion during 2002 compared
to 2001, as further discussed below. New insurance written on a flow basis
increased $9.6 billion during 2002 compared to 2001, with refinance volume
approximately equal in both years (41.6% of new insurance written in 2001 and
42.6% in 2002).

The $92.5 billion of new primary insurance written during 2002 was offset by the
cancellation of $79.4 billion of insurance in force, and resulted in a net
increase of $13.1 billion in primary insurance in force, compared to new primary
insurance written of $86.1 billion, the cancellation of $62.4 billion of
insurance in force and a net increase of $23.7 billion in primary insurance in
force during 2001. Direct primary insurance in force was $197.0 billion at
December 31, 2002 compared to $183.9 billion at December 31, 2001. Direct
primary risk in force, net of aggregate loss limits, was $47.6 billion at
December 31, 2002 compared to $42.7 billion at December 31, 2001.

In addition to providing primary insurance coverage, the Company also insures
pools of mortgage loans. New pool risk written during 2002 and 2001 was $674
million and $412 million, respectively. The Company's direct pool risk in force
was $2.6 billion at December 31, 2002 and $2.0 billion at December 31, 2001. Of
the pool risk written in 2002 and the risk in force, $398 million and $2.3
billion, respectively, represent contractual aggregate loss limits. For $3.0
billion of risk without such limits, risk is calculated at $276 million for new
pool risk written and $274 million for pool risk in force, the estimated amount
that would credit enhance these loans to a `AA' level.

Cancellation activity has historically been affected by the level of mortgage
interest rates, with cancellations generally moving inversely to the change in
the direction of interest rates. The home mortgage interest rate environment
continued to decline in 2002. As a result, cancellations increased during 2002
compared to the cancellation levels during 2001, which resulted in a decrease in
the MGIC persistency rate (percentage of insurance remaining in force from one
year prior) to 56.8% at December 31, 2002 from 61.0% at December 31, 2001. In
view of continued strong refinance activity in 2003, the persistency rate could
decline further during the first quarter of 2003.

New insurance written during 2002 for bulk transactions was $22.5 billion ($6.6
billion, $5.7 billion, $4.4 billion and $5.8 billion for the first through
fourth quarters, respectively) compared to $25.7 billion during 2001. The
Company's writings of bulk insurance are in part sensitive to the volume of
securitization transactions involving non-conforming loans. A securitization
involves the sale of whole loans held by the securitizer. The Company believes
that the relatively high historical spread between the cost of funding mortgages
and mortgage coupon rates during portions of the second half 

                                  -------------
                                       three
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

of 2002 resulted in increased prices for whole loans which had the effect of
reducing the supply of mortgages available for current securitization. The
Company's writings of bulk insurance are also sensitive to competition from
other methods of providing credit enhancement in a securitization, including the
willingness of investors to purchase tranches of the securitization with a
higher degree of credit risk. The Company expects bulk volume for the first
quarter of 2003 will exceed bulk volume for the fourth quarter of 2002.

The Company expects that the loans included in bulk transactions will have
delinquency and claim rates in excess of those on the Company's flow business
and will have lower persistency than the Company's flow business. While the
Company believes it has priced its bulk business to generate acceptable returns,
there can be no assurance that the assumptions underlying the premium rates
adequately address the risk of this business. In the first quarter of 2002, the
Company entered into a preliminary agreement providing that new insurance
written in 2002 through the bulk channel on Alt A, subprime and certain other
loans would be subject to quota share reinsurance of approximately 15% provided
by a third party reinsurer. The agreement was terminated on a cutoff basis
effective October 1, 2002, relieving both parties of any further obligations.

Net premiums written increased 14% to $1,178.0 million during 2002, from
$1,036.4 million during 2001. Net premiums earned increased 13% to $1,182.1
million for 2002 from $1,042.3 million for 2001. The increases were primarily a
result of the growth in insurance in force and a higher percentage of premiums
on products with higher premium rates, principally on insurance written through
the bulk channel, offset in part by an increase in ceded premiums.

Premiums ceded in captive mortgage reinsurance arrangements and in risk sharing
arrangements with the GSEs were $100.0 million in 2002, compared to $61.0
million in 2001. Through September 30, 2002, approximately 53% of the Company's
new insurance written on a flow basis was subject to such arrangements compared
to 50% for the year ended December 31, 2001. (New insurance written through the
bulk channel is not subject to such arrangements.) The percentage of new
insurance written during a period covered by such arrangements normally
increases after the end of the period because, among other reasons, the transfer
of a loan in the secondary market can result in a mortgage insured during a
period becoming part of such an arrangement in a subsequent period. Therefore,
for 2002, the percentage of new insurance written covered by such arrangements
is shown as of the end of the prior quarter. Premiums ceded in such arrangements
are reported as ceded in the period in which they are ceded regardless of when
the mortgage was insured.

A substantial portion of the Company's captive mortgage reinsurance arrangements
are structured on an excess of loss basis. The Company has decided that,
effective March 31, 2003, it will not participate in excess of loss risk sharing
arrangements with net premium cessions in excess of 25% on terms which are
generally present in the market. The captive mortgage reinsurance programs of
larger lenders generally are not consistent with the Company's position. Hence,
the Company expects its position with respect to such risk sharing arrangements
will result in a reduction in business from such lenders.

Investment income for 2002 was $207.5 million, compared to $204.4 million for
2001. This increase was the result of increases in the amortized cost of average
invested assets to $4.2 billion for 2002 from $3.7 billion for 2001, an increase
of 15%, offset by a decrease in the investment yield. The portfolio's average
pre-tax investment yield was 4.7% for 2002 and 5.4% for 2001. The portfolio's
average after-tax investment yield was 4.2% for 2002 and 4.6% for the same
period in 2001. The Company's net realized gains were $29.1 million for 2002
compared to net realized gains of $37.4 million during 2001, resulting primarily
from the sale of fixed maturities.

Other revenue, which is composed of various components, was $147.1 million for
2002, compared with $73.8 million for 2001. The increase is primarily the result
of increased equity earnings from Credit-Based Asset Servicing and
Securitization LLC and its subsidiaries (collectively, "C-BASS") and Sherman
Financial Group LLC and its subsidiaries (collectively, "Sherman"), joint
ventures with Radian Group Inc. ("Radian"), and from contract underwriting.

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C-BASS, in which the Company and Radian each have an interest of approximately
45.9%, is a mortgage investment and servicing firm specializing in
credit-sensitive single-family residential mortgage assets and residential
mortgage-backed securities. C-BASS principally invests in whole loans (including
subprime loans) and mezzanine and subordinated residential mortgage-backed
securities backed by non-conforming residential mortgage loans. C-BASS's
principal sources of revenues during the last three years were gain on
securitization and liquidation of mortgage-related assets, servicing fees and
net interest income (including accretion on mortgage securities), which revenue
items were offset by unrealized losses. C-BASS's results of operations are
affected by the timing of its securitization transactions. Virtually all of
C-BASS's assets do not have readily ascertainable market values and, as a
result, their value for financial statement purposes is estimated by the
management of C-BASS. These estimates reflect the net present value of the
future cash flows from the assets, which in turn depend on, among other things,
estimates of the level of losses on the underlying mortgages and prepayment
activity by the mortgage borrowers. Market value adjustments could impact
C-BASS's results of operations and the Company's share of those results.

Total consolidated assets of C-BASS at December 31, 2002 and 2001 were
approximately $1.754 billion and $1.288 billion, respectively. Total liabilities
at December 31, 2002 and 2001 were approximately $1.385 billion and $1.006
billion, respectively, of which approximately $1.110 billion and $0.934 billion,
respectively, were funding arrangements, including accrued interest, virtually
all of which mature within one year or less. The remaining liabilities at those
dates were related to interest rate hedging activities or were accrued expenses
and other liabilities. For the years ended December 31, 2002 and 2001, revenues
of approximately $311 million and $224 million, respectively, and expenses of
approximately $173 million and $138 million, respectively, resulted in income
before tax of approximately $138 million and $86 million, respectively. The
Company does not anticipate that C-BASS's income before tax in 2003 will exceed
its income before tax in 2002. The Company is not undertaking any obligation to
provide an update of this expectation should it subsequently change.

Sherman is engaged in the business of purchasing and servicing delinquent
consumer assets such as credit card loans and Chapter 13 bankruptcy debt. A
substantial portion of Sherman's consolidated assets are investments in consumer
receivable portfolios that do not have readily ascertainable market values.
Sherman's results of operations are sensitive to estimates by Sherman's
management of ultimate collections on these portfolios. Effective January 1,
2003, the Company and Radian each sold 4 percentage points of their respective
interest in Sherman to Sherman's management for cash, reducing each company's
interest in Sherman to 41.5%. Because C-BASS and Sherman are accounted for by
the equity method, they are not consolidated with the Company and their assets
and liabilities do not appear in the Company's balance sheet. The "investments
in joint ventures" item in the Company's balance sheet reflects the amount of
capital contributed by the Company to the joint ventures plus the Company's
share of their net income (or minus its share of their net loss) and minus
capital distributed to the Company by the joint ventures. The Company's
investment in C-BASS on an equity basis at December 31, 2002 was $168.7 million.
The Company's investment in Sherman on an equity basis at December 31, 2002 was
$54.4 million.

As discussed in "Note 2 - Loss Reserves" to the Company's consolidated financial
statements, consistent with industry practice, loss reserves for future claims
are established only for loans that are currently delinquent. (The terms
"delinquent" and "default" are used interchangeably by the Company.) Loss
reserves are established by management's estimating the number of loans in the
Company's inventory of delinquent loans that will not cure their delinquency
(historically, a substantial majority of delinquent loans have cured), which is
referred to as the claim rate, and further estimating the amount that the
Company will pay in claims on the loans that do not cure, which is referred to
as claim severity. Estimation of losses that the Company will pay in the future
is inherently judgmental. The conditions that affect the claim rate and claim
severity include the current and future state of the domestic economy and the
current and future strength of local housing markets.

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Net losses incurred increased 127% to $365.8 million in 2002, from $160.8
million in 2001. On a quarterly basis, net losses incurred were $59.7 million,
$64.4 million, $101.1 million and $140.5 million for the first through the
fourth quarters, respectively. The increase in 2002 was due to an increase in
the primary notice inventory related to bulk default activity and defaults
arising from the early development of the 2000 and 2001 flow books of business
as well as an increase in losses paid. The average primary claim paid for 2002
was $20,115 compared to $18,607 for 2001. In 2002, the primary determinant of
incurred losses was the level and composition of the notice inventory, rather
than claim severity. The Company expects that incurred losses in 2003 will
increase over the level of 2002. The Company is not undertaking any obligation
to provide an update of this expectation should it subsequently change.
Information about the composition of the primary insurance default inventory at
December 2002 and 2001 appears in the table below.

                                December 31,      December 31,
                                    2002             2001
                                -------------    ------------

Total loans delinquent.........   73,648           54,653
Percentage of loans delinquent
  (default rate)...............    4.45%            3.46%

Flow loans delinquent..........   43,196           36,193
Percentage of flow loans
  delinquent (default rate)....    3.19%            2.65%

Bulk loans delinquent..........   30,452           18,460
Percentage of bulk loans
  delinquent (default rate)....   10.09%            8.59%

A-minus and subprime credit
  loans delinquent*............   25,504           15,649
Percentage of A-minus and
  subprime credit loans
  delinquent (default rate)....   12.68%           11.60%

* A portion of A-minus and subprime credit loans is included in flow loans
  delinquent and the remainder is included in bulk loans delinquent. Most
  A-minus and subprime credit loans are written through the bulk channel.

The pool notice inventory increased from 23,623 at December 31, 2001 to 26,676
at December 31, 2002.

Information about losses paid in 2002 and 2001 appears in the table below.

                                    Twelve months ended
Net paid claims ($ millions)            December 31,
                                -----------------------------

                                    2002            2001
                                -------------    ------------
Flow...........................     $117            $ 93
Bulk...........................       65              14
Second mortgage................       24              16
Pool and other.................       35              27
                                -------------    ------------

                                    $241            $150
                                =============    ============

The Company stopped writing new second mortgage risk for loans closing after
2001.

At December 31, 2002, 82% of MGIC's insurance in force was written subsequent to
December 31, 1998. Based on the Company's flow business, the highest claim
frequency years have typically been the third through fifth year after the year
of loan origination. However, the pattern of claims frequency for refinance
loans may be different from this historical pattern and the Company expects the
period of highest claims frequency on bulk loans will occur earlier than in this
historical pattern.

For additional information about loss reserves, see Note 6 of the Notes to the
Company's consolidated financial statements.

Underwriting and other expenses increased to $265.6 million in 2002 from $234.5
million in 2001, an increase of 13%. The increase can be attributed to increases
in expenses related to increased volume. In December 2002, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
("SFAS") No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure, an amendment to SFAS No. 123, Accounting for Stock-Based
Compensation. The Company intends to adopt SFAS No. 148 in the first quarter of
2003. The adoption requires expensing of stock-based employee compensation
costs.

Interest expense increased to $36.8 million in 2002 from $30.6 million during
the same period in 2001 primarily due to an increase in debt outstanding offset
by lower weighted-average interest rates during 2002 compared to 2001.

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The consolidated insurance operations loss ratio was 30.9% for 2002 compared to
15.4% for 2001. The consolidated insurance operations expense and combined
ratios were 14.8% and 45.7%, respectively, for 2002 compared to 16.5% and 31.9%
for 2001.

The effective tax rate was 29.9% in 2002, compared to 31.4% in 2001. During both
periods, the effective tax rate was below the statutory rate of 35%, reflecting
the benefits of tax-preferenced investments. The lower effective tax rate in
2002 resulted from a higher percentage of total income before tax being
generated from the tax-preferenced investments.

2001 Compared with 2000

Net income for 2001 was $639.1 million, compared to $542.0 million in 2000, an
increase of 18%. Net income for 2000 includes a pre-tax charge of $23.2 million
for settlement of the RESPA settlement described in "Other Matters" below.
Diluted earnings per share was $5.93 for 2001 compared with $5.05 in 2000.

Total revenues for 2001 were $1,357.8 million, an increase of 22% from the
$1,110.3 million for 2000. This increase was primarily attributable to an
increase in new business writings, which included $25.7 billion of bulk
transactions. Also contributing to the increase in revenues was an increase in
investment income resulting from strong cash flows and increases in realized
gains and other revenue. See below for a further discussion of premiums,
investment income and other revenue.

Losses and expenses for 2001 were $425.9 million, an increase of 32% from $321.5
million for the same period of 2000. The increase in 2001 can be attributed to
an increase in losses related to an increase in notice inventories and an
increase in expenses related to increases in insured volume and in contract
underwriting. See below for a further discussion of losses incurred and
underwriting expenses.

The amount of new primary insurance written by MGIC during 2001 was $86.1
billion, compared with $41.5 billion in 2000. Refinancing activity increased to
42% of new primary insurance written in 2001 on a flow basis (or $25.1 billion),
compared to 13% in 2000 (or $4.6 billion) as a result of the decreasing mortgage
interest rate environment in 2001. New primary insurance written in the bulk
channel increased to 30% of new primary insurance written in 2001 compared to
17% in 2000, reflecting the increasing use of mortgage insurance in certain
mortgage securitizations and MGIC's share of this market. A portion of the loans
insured in bulk transactions are refinanced loans. New insurance written on a
flow basis increased $25.9 billion from 2000 to 2001.

The $86.1 billion of new primary insurance written during 2001 was offset by the
cancellation of $62.4 billion of insurance in force, and resulted in a net
increase of $23.7 billion in primary insurance in force, compared to new primary
insurance written of $41.5 billion, the cancellation of $28.9 billion of
insurance in force and a net increase of $12.6 billion in primary insurance in
force during 2000.

New pool risk written during 2001 and 2000 was $411.7 million and $345.5
million, respectively. The Company's direct pool risk in force was $2.0 billion
at December 31, 2001 compared to $1.7 billion at December 31, 2000.

Cancellations increased during 2001 compared to the cancellation levels of 2000
principally due to the lower mortgage interest rate environment which resulted
in a decrease in the MGIC persistency rate to 61.0% at December 31, 2001 from
80.4% at December 31, 2000.
Net premiums written increased 17% to $1,036.4 million in 2001, from $887.4
million in 2000. Net premiums earned increased 17% to $1,042.3 million in 2001
from $890.1 million in 2000. The increases were primarily a result of the growth
in insurance in force and a higher percentage of renewal premiums on products
with higher premium rates, principally on insurance written though the bulk
channel, offset in part by an increase in ceded premiums to $65.3 million in
2001, compared to $52.9 million in 2000. Premiums ceded in captive mortgage
reinsurance arrangements and in risk sharing arrangements with the GSEs were
$61.0 million in 2001 compared to $43.2 million in 2000.

Investment income for 2001 was $204.4 million, an increase of 14% over the
$178.5 million in 2000. This increase was primarily the result of an increase in
the amortized cost of average invested assets to $3.7 billion 

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for 2001 from $3.1 billion for 2000, an increase of 18%. The portfolio's average
pre-tax investment yield was 5.4% and 6.0% at December 31, 2001 and 2000,
respectively. The portfolio's average after-tax investment yield was 4.6% and
4.9% at December 31, 2001 and 2000, respectively. The Company's net realized
gains of $37.4 million during 2001 compared to $1.4 million in 2000, resulted
primarily from the sale of fixed maturities.

Other revenue was $73.8 million in 2001, compared with $40.3 million in 2000.
The increase is primarily the result of an increase in contract underwriting
revenue and increases in equity earnings from C-BASS and Sherman.

For the years ended December 31, 2001 and 2000, C-BASS had revenues of
approximately $224 million and $154 million, respectively, and expenses of
approximately $138 million and $98 million, respectively, which resulted in
income before tax of approximately $86 million and $56 million, respectively.

Net losses incurred increased 75% to $160.8 million in 2001, from $91.7 million
in 2000. The increase was due to an increase in the primary notice inventory
related to bulk default activity, which in turn was the result of the higher
volume of bulk business; the maturation of the relatively large 1998 and 1999
books of business, which had entered their peak delinquency periods; and
defaults arising from the early development of the 2000 book of business. The
average claim paid for 2001 was $18,607 compared to $18,977 in 2000. For
information about the notice inventory and default rates for 2001, see "2002
Compared with 2001."

Underwriting and other expenses increased to $234.5 million in 2001 from $177.8
million in 2000, an increase of 32%. The increase can be attributed to increases
in both insurance and non-insurance expenses related to increased volume and
contract underwriting.

Interest expense in 2001 increased to $30.6 million from $28.8 million in 2000
due to slightly higher weighted-average interest rates in 2001 compared to 2000,
and higher weighted-average balances.

The consolidated insurance operations loss ratio was 15.4% for 2001 compared to
10.3% for 2000. The consolidated insurance operations expense and combined
ratios were 16.5% and 31.9%, respectively, for 2001 compared to 16.4% and 26.7%,
respectively for 2000.

The effective tax rate was 31.4% in 2001, compared to 31.3% in 2000. During both
years, the effective tax rate was below the statutory rate of 35%, reflecting
the benefits of tax-preferenced investments. The higher effective tax rate in
2001 resulted from a lower percentage of total income before tax being generated
from tax-preferenced investments in 2001.

Other Matters

In June 2001, the Federal District Court for the Southern District of Georgia,
before which Downey et. al. v. MGIC was pending, issued a final order approving
a settlement agreement and certified a nationwide class of borrowers. In the
fourth quarter of 2000, the Company recorded a $23.2 million charge to cover the
estimated costs of the settlement, including payments to borrowers. Due to
appeals by certain class members and members of classes in two related cases,
payments to borrowers in the settlement are delayed pending the outcome of the
appeals. The settlement includes an injunction that prohibits certain practices
and specifies the basis on which agency pool insurance, captive mortgage
reinsurance, contract underwriting and other products may be provided in
compliance with the Real Estate Settlement Procedures Act. There can be no
assurance that the standards established by the injunction will be determinative
of compliance with the Real Estate Settlement Procedures Act were additional
litigation to be brought in the future.
The complaint in the case alleges that MGIC violated the Real Estate Settlement
Procedures Act by providing agency pool insurance, captive mortgage reinsurance,
contract underwriting and other products that were not properly priced, in
return for the referral of mortgage insurance. The complaint seeks damages of
three times the amount of the mortgage insurance premiums that have been paid
and that will be paid at the time of judgment for the mortgage insurance found
to be involved in a violation of the Real Estate Settlement Procedures Act. The
complaint also seeks injunctive 

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relief, including prohibiting MGIC from receiving future premium payments. If
the settlement is not fully implemented, the litigation will continue. In these
circumstances, there can be no assurance that the ultimate outcome of the
litigation will not materially affect the Company's financial position or
results of operations.

Under the Office of Federal Housing Enterprise Oversight's ("OFHEO") risk-based
capital stress test for the GSEs, claim payments made by a private mortgage
insurer on GSE loans are reduced below the amount provided by the mortgage
insurance policy to reflect the risk that the insurer will fail to pay. Claim
payments from an insurer whose claims-paying ability rating is `AAA' are subject
to a 3.5% reduction over the 10-year period of the stress test, while claim
payments from a `AA' rated insurer, such as MGIC, are subject to an 8.75%
reduction. The effect of the differentiation among insurers is to require the
GSEs to have additional capital for coverage on loans provided by a private
mortgage insurer whose claims-paying rating is less than `AAA.' As a result,
there is an incentive for the GSEs to use private mortgage insurance provided by
a `AAA' rated insurer.

Financial Condition
Consolidated total investments and cash balances increased approximately $642
million to $4.7 billion at December 31, 2002 from $4.1 billion at December 31,
2001, primarily due to net cash provided by operating activities, the change in
unrealized gains on securities marked to market of $176 million and the proceeds
of the sale of the 6% Senior Notes discussed under "Liquidity and Capital
Resources" below, offset by funds used to repurchase Common Stock discussed
under "Liquidity and Capital Resources" below. The Company generated net cash
from operating activities of $613.3 million for 2002, compared to $626.1 million
generated during 2001. The decrease in operating cash flows during 2002 compared
to 2001 is due primarily to increases in losses paid, offset by increases in
renewal premiums, investment income and other revenue as discussed above.

As of December 31, 2002, the Company had $102.2 million of short-term
investments with maturities of 90 days or less, and 82% of the portfolio was
invested in tax-preferenced securities. In addition, at December 31, 2002, based
on book value, the Company's fixed income securities were approximately 99%
invested in `A' rated and above, readily marketable securities, concentrated in
maturities of less than 15 years. At December 31, 2002, the Company had $10.8
million of investments in equity securities compared to $20.7 million at
December 31, 2001.

At December 31, 2002, the Company's derivative financial instruments in its
investment portfolio were immaterial. The Company places its investments in
instruments that meet high credit quality standards, as specified in the
Company's investment policy guidelines; the policy also limits the amount of
credit exposure to any one issue, issuer and type of instrument. At December 31,
2002, the effective duration of the Company's fixed income investment portfolio
was 5.7 years. This means that for an instantaneous parallel shift in the yield
curve of 100 basis points there would be an approximate 5.7% change in the
market value of the Company's fixed income portfolio.

The Company's investments in unconsolidated joint ventures increased $78.4
million from $161.7 million at December 31, 2001 to $240.1 million at December
31, 2002 primarily as a result of equity earnings of $81.8 million and a $17.5
million contribution to affordable housing tax credit ventures, offset by $20.1
million of dividends received. The unconsolidated joint ventures are reported on
the equity method. Only the Company's investment in the unconsolidated joint
ventures appears on the Company's balance sheet.

Consolidated loss reserves increased to $733.2 million at December 31, 2002 from
$613.7 million at December 31, 2001, reflecting increases in the primary and
pool insurance notice inventories, as discussed earlier. Consistent with
industry practices, the Company does not establish loss reserves for future
claims on insured loans which are not currently in default.

Consolidated unearned premiums decreased $4.3 million from $174.5 million at
December 31, 2001, to $170.2 million at December 31, 2002, primarily reflecting
the continued high level of monthly premium policies written for which there is
no unearned premium.

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Consolidated shareholders' equity increased to $3.4 billion at December 31,
2002, from $3.0 billion at December 31, 2001, an increase of 12%. This increase
consisted of $629.2 million of net income during 2002, other comprehensive
income, net of tax, of $101.3 million and $0.4 million from the consolidation of
a previously unconsolidated joint venture that is now majority owned, offset by
$345.5 million from the repurchase of treasury stock (net of reissuances) and
dividends declared of $10.4 million.

Liquidity and Capital Resources
The Company's consolidated sources of funds consist primarily of premiums
written and investment income. The Company generated positive cash flows from
operating activities of approximately $613.3 million and $626.1 million for the
years ended December 31, 2002 and 2001, respectively, as shown on the
Consolidated Statement of Cash Flows. Positive cash flows are invested pending
future payments of claims and other expenses. Substantially all of the
investment portfolio securities are held by the Company's insurance
subsidiaries.

The Company has a $285 million commercial paper program, which is rated `A-1' by
Standard and Poors ("S&P") and `P-1' by Moody's. At December 31, 2002 and 2001,
the Company had $177.3 million and $172.1 million in commercial paper
outstanding with a weighted average interest rate of 1.46% and 1.91% at December
31, 2002 and 2001, respectively.

The Company had a $285 million credit facility available at December 31, 2002
expiring in 2006. Under the terms of the credit facility, as amended in July
2002, the Company must maintain shareholders' equity of at least $2.25 billion
and MGIC must maintain a risk-to-capital ratio of not more than 22:1 and
maintain policyholders position (which includes MGIC's surplus and its
contingency reserve) of not less than the amount required by Wisconsin insurance
regulation. At December 31, 2002, the Company met these requirements. The
facility is currently being used as a liquidity back up facility for the
outstanding commercial paper. The remaining credit available under the facility
after reduction for the amount necessary to support the commercial paper was
$107.7 million at December 31, 2002.

In March of 2002, the Company issued, in a public offering, $200 million, 6%
Senior Notes due in 2007. The notes are unsecured and were rated `A1' by
Moody's, `A+' by S&P and `AA-' by Fitch. The Company had $300 million, 7.5%
Senior Notes due in 2005 outstanding at December 31, 2002 and 2001.

In October 2002, the Company announced a new share repurchase program covering
up to 5 million shares. During 2002, the Company repurchased 6.4 million shares
at a cost of $373.3 million. Of these shares, 0.1 million were purchased under
the new program and the remainder under a predecessor program which was
completed. (The number of shares and the cost of the repurchases described in
this paragraph include trades effected on or prior to December 31, 2002 but
which settled thereafter.) From mid-1997 through December 31, 2002, the Company
repurchased 21.4 million shares of Common Stock at a cost of $1.1 billion. Funds
for the shares repurchased by the Company since mid-1997 have been provided
through a combination of debt, including the Senior Notes and the commercial
paper, and internally generated funds.

The commercial paper, back-up credit facility and the Senior Notes are
obligations of the Company and not of its subsidiaries. The Company is a holding
company and the payment of dividends from its insurance subsidiaries is
restricted by insurance regulation. MGIC is the principal source of
dividend-paying capacity. As a result of a $138 million dividend scheduled to be
paid to the Company by MGIC in late March 2003, as of the date of the payment of
such dividend, MGIC may not pay more than $1.7 million of additional dividends
without the approval of the Office of the Commissioner of Insurance of the State
of Wisconsin (the "OCI"). The first paragraph of Note 11 of the Notes to the
Company's consolidated financial statements discusses the regulations of the OCI
governing the payment of dividends without approval of the OCI.

Interest payments on all long-term and short-term debt (commercial paper is
classified as short-term debt) were $36.2 million and $22.6 million for the
years ended December 31, 2002 and 2001, respectively. At December 31, 2002, the
market value of the short- and long-term debt is $721.9 million.

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The Company uses interest rate swaps to hedge interest rate exposure associated
with its short- and long-term debt. In 2000, the Company paid an interest rate
based on LIBOR and received a fixed rate of 7.5% to hedge the 5-year Senior
Notes issued in the fourth quarter of 2000. These swaps were terminated in

September 2001. In January 2002, the Company initiated a new swap which was
designated as a fair value hedge of the 7.5% Senior Notes. This swap was
terminated in June 2002. In May 2002, a swap designated as a cash flow hedge was
amended to coincide with the new credit facility. Under the terms of the swap
contract, the Company pays a fixed rate of 5.43% and receives an interest rate
based on LIBOR. The swap has an expiration date coinciding with the maturity of
the credit facility and is designated as a cash flow hedge. Gains or losses
arising from the amendment or termination of interest rate swaps are deferred
and amortized to interest expense over the life of the hedged items. Expenses on
the swaps during 2002 and 2001 of approximately $1.8 million and $3.7 million,
respectively, were included in interest expense. The cash flow swap outstanding
at December 31, 2002 and 2001 is evaluated quarterly using regression analysis
with any ineffectiveness being recorded as an expense. To date this evaluation
has not resulted in any hedge ineffectiveness. The swaps are subject to credit
risk to the extent the counterparty would be unable to discharge its obligations
under the swap agreements.

The Company's principal category of contingent liabilities is its obligation to
pay claims under MGIC's mortgage guaranty insurance policies. At December 31,
2002, MGIC's direct (before any reinsurance) primary and pool risk in force
(which is the unpaid principal balance of insured loans as reflected in the
Company's records multiplied by the coverage percentage, and taking account of
any contractual loss limit) was approximately $52.9 billion. In addition, as
part of its contract underwriting activities, the Company is responsible for the
quality of its underwriting decisions in accordance with the terms of the
contract underwriting agreements with customers. Through December 31, 2002, the
cost of remedies provided by the Company to customers for failing to meet the
standards of the contracts has not been material. However, the decreasing trend
of home mortgage interest rates over the last several years may have mitigated
the effect of some of these costs since the general effect of lower interest
rates can be to increase the value of certain loans on which remedies are
provided. There can be no assurance that contract underwriting remedies will not
be material in the future.

MGIC is the principal insurance subsidiary of the Company. MGIC's
risk-to-capital ratio was 8.7:1 at December 31, 2002 (determined using $42.4
billion of risk, which includes calculated risk of $274 million on $3.0 billion
of contractual pool risk, and $4.9 billion of capital) compared to 9.1:1 at
December 31, 2001. The decrease was due to MGIC's increased policyholders'
reserves, partially offset by the net additional risk in force of $3.2 billion,
net of reinsurance, during 2002.

The risk-to-capital ratios set forth above have been computed on a statutory
basis. However, the methodology used by the rating agencies to assign
claims-paying ability ratings permits less leverage than under statutory
requirements. As a result, the amount of capital required under statutory
regulations may be lower than the capital required for rating agency purposes.
In addition to capital adequacy, the rating agencies consider other factors in
determining a mortgage insurer's claims-paying rating, including its competitive
position, business outlook, management, corporate strategy, and historical and
projected operating performance.

For certain material risks of the Company's business, see "Risk Factors" below.

Risk Factors

Our revenues and losses could be affected by the risk factors discussed below.
These factors may also cause actual results to differ materially from the
results contemplated by forward looking statements that the Company may make.
Forward looking statements consist of statements which relate to matters other
than historical fact. Among others, statements that include words such as the
Company "believes," "anticipates" or "expects," or words of similar import, are
forward looking statements.

                                  -------------
                                     eleven
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

As the domestic economy deteriorates, more homeowners may default and the
Company's losses may increase.

Losses result from events that reduce a borrower's ability to continue to make
mortgage payments, such as unemployment, and whether the home of a borrower who
defaults on his mortgage can be sold for an amount that will cover unpaid
principal and interest and the expenses of the sale. Favorable economic
conditions generally reduce the likelihood that borrowers will lack sufficient
income to pay their mortgages and also favorably affect the value of homes,
thereby reducing and in some cases even eliminating a loss from a mortgage
default. A deterioration in economic conditions generally increases the
likelihood that borrowers will not have sufficient income to pay their mortgages
and can also adversely affect housing values.

Competition or changes in the Company's relationships with its customers could
reduce the Company's revenues or increase its losses.

Competition for private mortgage insurance premiums occurs not only among
private mortgage insurers but increasingly with mortgage lenders through captive
mortgage reinsurance transactions. In these transactions, a lender's affiliate
reinsures a portion of the insurance written by a private mortgage insurer on
mortgages originated by the lender. In 1996, the Company shared risk under risk
sharing arrangements with respect to virtually none of its new insurance
written. During the nine months ended September 30, 2002, about 53% of the
Company's new insurance written on a flow basis was subject to risk sharing
arrangements. A substantial portion of the Company's captive mortgage
reinsurance arrangements are structured on an excess of loss basis. The Company
has decided that, effective March 31, 2003, it will not participate in excess of
loss risk sharing arrangements with net premium cessions in excess of 25% on
terms which are generally present in the market. The captive mortgage
reinsurance programs of larger lenders generally are not consistent with the
Company's position. Hence, the Company expects its position with respect to such
risk sharing arrangements will result in a reduction of business from such
lenders.

The level of competition within the private mortgage insurance industry has also
increased as many large mortgage lenders have reduced the number of private
mortgage insurers with whom they do business. At the same time, consolidation
among mortgage lenders has increased the share of the mortgage lending market
held by large lenders. The Company's top ten customers generated 27.0% of the
new primary insurance that it wrote on a flow basis in 1997 compared to 39.5% in
2002.

Our private mortgage insurance competitors include:

o    PMI Mortgage Insurance Company
o    GE Capital Mortgage Insurance Corporation
o    United Guaranty Residential Insurance Company
o    Radian Guaranty Inc.
o    Republic Mortgage Insurance Company
o    Triad Guaranty Insurance Corporation
o    CMG Mortgage Insurance Company

If interest rates decline, house prices appreciate or mortgage insurance
cancellation requirements change, the length of time that our policies remain in
force could decline and result in declines in our revenue.

In each year, most of the Company's premiums are from insurance that has been
written in prior years. As a result, the length of time insurance remains in
force (which is also generally referred to as persistency) is an important
determinant of revenues. The factors affecting the length of time the Company's
insurance remains in force include:

o    the level of current mortgage interest rates compared to the mortgage
     coupon rates on the insurance in force, which affects the vulnerability of
     the insurance in force to refinancings, and

o    mortgage insurance cancellation policies of mortgage investors along with
     the rate of home price appreciation experienced by the homes underlying the
     mortgages in the insurance in force.

In recent years, the length of time that our policies remain in force has
declined. Due to this decline, our premium revenues were lower than they would
have been if the length had not declined.

                                  -------------
                                     twelve
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

If the volume of low down payment home mortgage originations declines, the
amount of insurance that the Company writes could decline which would reduce our
revenues.

The factors that affect the volume of low down payment mortgage originations
include:

o    the level of home mortgage interest rates,

o    the health of the domestic economy as well as conditions in regional and
     local economies, o housing affordability,

o    population trends, including the rate of household formation,

o    the rate of home price appreciation, which in times of heavy refinancing
     can affect whether refinance loans have loan-to-value ratios that require
     private mortgage insurance, and

o    government housing policy encouraging loans to first-time homebuyers.

While we have not experienced lower volume in recent years other than as a
result of declining refinancing activity, one of the risks we face is that
higher interest rates will substantially reduce purchase activity by first-time
homebuyers and that the decline in cancellations of insurance that in the past
have accompanied higher interest rates will not be sufficient to offset the
decline in premiums from loans that are not made.

The amount of insurance the Company writes could be adversely affected if
lenders and investors select alternatives to private mortgage insurance.

These alternatives to private mortgage insurance include:

o    lenders structuring mortgage originations to avoid private mortgage
     insurance, such as a first mortgage with an 80% loan-to-value ratio and a
     second mortgage with a 10% loan-to-value ratio (referred to as an 80-10-10
     loan) rather than a first mortgage with a 90% loan-to-value ratio,

o    investors holding mortgages in portfolio and self-insuring,

o    investors using credit enhancements other than private mortgage insurance
     or using other credit enhancements in conjunction with reduced levels of
     private mortgage insurance coverage, and

o    lenders using government mortgage insurance programs, including those of
     the Federal Housing Administration and the Veterans Administration.

While no data is publicly available, the Company believes that due to the
current low interest rate environment and favorable economic conditions,
80-10-10 loans are a significant percentage of mortgage originations. Investors
are using reduced mortgage insurance coverage on a higher percentage of loans
that the Company insures than they had over the last several years.

Changes in the business practices of Fannie Mae and Freddie Mac could reduce the
Company's revenues or increase its losses.

The business practices of Fannie Mae and Freddie Mac affect the entire
relationship between them and mortgage insurers and include:

o    the level of private mortgage insurance coverage, subject to the
     limitations of Fannie Mae and Freddie Mac's charters, when private mortgage
     insurance is used as the required credit enhancement on low down payment
     mortgages,

o    whether Fannie Mae or Freddie Mac influence the mortgage lender's selection
     of the mortgage insurer providing coverage and, if so, any transactions
     that are related to that selection,

o    whether Fannie Mae or Freddie Mac will give mortgage lenders an incentive,
     such as a reduced guaranty fee, to select a mortgage insurer that has a
     `AAA' claims-paying ability rating to benefit from 

                                  -------------
                                    thirteen
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

     the lower capital requirements for Fannie Mae and Freddie Mac when a
     mortgage is insured by a company with that rating,

o    the underwriting standards that determine what loans are eligible for
     purchase by Fannie Mae or Freddie Mac, which thereby affect the quality of
     the risk insured by the mortgage insurer and the availability of mortgage
     loans,

o    the terms on which mortgage insurance coverage can be canceled before
     reaching the cancellation thresholds established by law, and

o    the circumstances in which mortgage servicers must perform activities
     intended to avoid or mitigate loss on insured mortgages that are
     delinquent.

Net premiums written could be adversely affected if a proposed regulation by the
Department of Housing and Urban Development under the Real Estate Settlement
Procedures Act is adopted.

The regulations of the Department of Housing and Urban Development under the
Real Estate Settlement Procedures Act prohibit paying lenders for the referral
of settlement services, including mortgage insurance, and prohibit lenders from
receiving such payments. In July 2002, the Department of Housing and Urban
Development proposed a regulation that would exclude from these anti-referral
fee provisions settlement services included in a package of settlement services
offered to a borrower at a guaranteed price. If mortgage insurance is required
on a loan, the package must include any mortgage insurance premium paid at
settlement. Although certain state insurance regulations prohibit an insurer's
payment of referral fees, adoption of this regulation by the Department of
Housing and Urban Development could adversely affect the Company's revenues to
the extent that lenders offered such packages and received value from the
Company in excess of what they could have received were the anti-referral fee
provisions of the Real Estate Settlement Procedures Act to apply and if such
state regulations were not applied to prohibit such payments.

The mortgage insurance industry is subject to litigation risk.

In recent years, consumers have brought a growing number of lawsuits against
home mortgage lenders and settlement service providers. As of the end of
December 2002, seven mortgage insurers, including the Company's MGIC subsidiary,
were involved in litigation alleging violations of the Real Estate Settlement
Procedures Act. MGIC and two other mortgage insurers entered into an agreement
to settle the cases against them in December 2000, and another mortgage insurer
entered into a comparable settlement agreement in February 2002. In June 2001,
the Court entered a final order approving the settlement to which MGIC and the
other two insurers are parties, although due to appeals challenging certain
aspects of this settlement, the final implementation of the settlement will not
occur until the appeals are resolved. The Company took a $23.2 million pre-tax
charge in 2000 to cover MGIC's share of the estimated costs of the settlement.
While MGIC's settlement includes an injunction that prohibits certain practices
and specifies the basis on which other practices may be done in compliance with
the Real Estate Settlement Procedures Act, MGIC may still be subject to future
litigation under the Real Estate Settlement Procedures Act.


                                  -------------
                                    fourteen
                                  -------------


<PAGE>

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                             MGIC INVESTMENT CORPORATION & SUBSIDIARIES
                                            YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         ------------------------------------------------------------------------------------
                                                Consolidated Statement of Operations
                         ------------------------------------------------------------------------------------



                                                                     2002                2001               2000
                                                                 --------------     ---------------    ---------------
REVENUES:                                                          (In thousands of dollars, except per share data)
<S>                                                              <C>                <C>                <C>          
   Premiums written:
     Direct....................................................  $   1,292,283      $   1,101,160      $     939,482
     Assumed...................................................            336                516                847
     Ceded (note 7)............................................       (114,664)           (65,323)           (52,941)
                                                                 --------------     ---------------    ---------------

   Net premiums written........................................      1,177,955          1,036,353            887,388
   Decrease in unearned premiums...............................          4,143              5,914              2,703
                                                                 --------------     ---------------    ---------------

   Net premiums earned (note 7)................................      1,182,098          1,042,267            890,091

   Investment income, net of expenses (note 4).................        207,516            204,393            178,535
   Realized investment gains, net (note 4).....................         29,113             37,352              1,432
   Other revenue...............................................        147,076             73,829             40,283
                                                                 --------------     ---------------    ---------------

     Total revenues............................................      1,565,803          1,357,841          1,110,341
                                                                 --------------     ---------------    ---------------

LOSSES AND EXPENSES:
   Losses incurred, net (notes 6 and 7)........................        365,752            160,814             91,723
   Underwriting and other expenses.............................        265,633            234,494            177,837
   Interest expense............................................         36,776             30,623             28,759
   Litigation settlement (note 13).............................              -                  -             23,221
                                                                 --------------     ---------------    ---------------

     Total losses and expenses.................................        668,161            425,931            321,540
                                                                 --------------     ---------------    ---------------

Income before tax..............................................        897,642            931,910            788,801
Provision for income tax (note 10).............................        268,451            292,773            246,802
                                                                 --------------     ---------------    ---------------

Net income.....................................................  $     629,191      $     639,137      $     541,999
                                                                 ==============     ===============    ===============

Earnings per share (note 11):
   Basic.......................................................  $        6.07      $        5.98      $        5.10
                                                                 ==============     ===============    ===============
                                                                 

   Diluted.....................................................  $        6.04      $        5.93      $        5.05
                                                                 ==============     ===============    ===============
</TABLE>








              See accompanying notes to consolidated financial statements.


                                  -------------
                                     fifteen
                                  -------------


<PAGE>


<TABLE>
<CAPTION>
                                             MGIC INVESTMENT CORPORATION & SUBSIDIARIES
                                                     December 31, 2002 and 2001
                         ------------------------------------------------------------------------------------
                                                     Consolidated Balance Sheet
                         ------------------------------------------------------------------------------------



                                                                                    2002                  2001
                                                                               ----------------     -----------------
<S>                                                                            <C>                  <C>             
ASSETS (In thousands of dollars) Investment portfolio (note 4):
   Securities, available-for-sale, at fair value:
     Fixed maturities........................................................  $     4,613,462      $      3,888,740
     Equity securities.......................................................           10,780                20,747
     Short-term investments..................................................          102,230               159,960
                                                                               ----------------     -----------------

       Total investment portfolio (amortized cost, 2002 - $4,466,183;
         2001 - $3,985,656)..................................................        4,726,472             4,069,447

Cash ........................................................................           11,041                26,392
Accrued investment income....................................................           58,432                59,036
Reinsurance recoverable on loss reserves (note 7)............................           21,045                26,888
Reinsurance recoverable on unearned premiums (note 7)........................            8,180                 8,415
Premiums receivable..........................................................           97,751                78,853
Home office and equipment, net...............................................           35,962                34,762
Deferred insurance policy acquisition costs..................................           31,871                32,127
Investments in joint ventures (note 8).......................................          240,085               161,674
Other assets.................................................................           69,464                69,418
                                                                               ----------------     -----------------

       Total assets..........................................................  $     5,300,303      $      4,567,012
                                                                               ================     =================

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Loss reserves (notes 6 and 7).............................................  $       733,181      $        613,664
   Unearned premiums (note 7)................................................          170,167               174,545
   Short- and long-term debt (note 5)........................................          677,246               472,102
   Income taxes payable......................................................          133,843                80,937
   Other liabilities.........................................................          190,674               205,577
                                                                               ----------------     -----------------

       Total liabilities.....................................................        1,905,111             1,546,825
                                                                               ----------------     -----------------

Contingencies (note 13)

Shareholders' equity (note 11):
   Common stock, $1 par value, shares authorized
     300,000,000; shares issued 2002 - 121,418,637; 2001 - 121,110,800
     outstanding 2002 - 100,251,444; 2001 - 106,086,594......................          121,419               121,111
   Paid-in surplus...........................................................          232,950               214,040
   Members' equity...........................................................              380                     -
   Treasury stock (shares at cost 2002 - 21,167,193; 2001 - 15,024,206)......       (1,035,858)             (671,168)
   Accumulated other comprehensive income - net of tax (note 2)..............          147,908                46,644
   Retained earnings (note 11)...............................................        3,928,393             3,309,560
                                                                               ----------------     -----------------

     Total shareholders' equity..............................................        3,395,192             3,020,187
                                                                               ----------------     -----------------

     Total liabilities and shareholders' equity..............................  $     5,300,303      $      4,567,012
                                                                               ================     =================

              See accompanying notes to consolidated financial statements.

</TABLE>



                                  -------------
                                     sixteen
                                  -------------


<PAGE>


<TABLE>
<CAPTION>
                                             MGIC INVESTMENT CORPORATION & SUBSIDIARIES
                                            Years Ended December 31, 2002, 2001 and 2000
                   ------------------------------------------------------------------------------------------------
                                           Consolidated Statement of Shareholders' Equity
                   ------------------------------------------------------------------------------------------------


                                                                                         Accumulated
                                                                                            other
                                                                                        comprehensive
                                    Common        Paid-in      Members'     Treasury        income        Retained     Comprehensive
                                     stock        surplus       equity        stock        (note 2)       earnings       income
                                 -------------- ------------  -----------  ------------ ---------------  ------------  ------------
                                                                     (In thousands of dollars)
<S>                              <C>           <C>          <C>          <C>             <C>           <C>         
Balance, December 31, 1999...... $   121,111   $  211,593   $        -   $    (665,707)  $   (40,735)  $  2,149,727

Net income......................           -            -            -               -             -        541,999 $    541,999
Unrealized investment gains                -            -            -               -       116,549              -      116,549
(losses), net
                                                                                                                    --------------
Comprehensive income............           -            -            -               -             -              - $    658,548
                                                                                                                    ==============
Dividends declared..............           -            -            -               -             -        (10,618)
Repurchase of outstanding
  common shares.................           -            -            -          (6,224)            -              -
Reissuance of treasury stock....           -       (3,711)           -          50,898             -              -
                                 ------------  -----------  ------------ --------------  ------------  -------------

Balance, December 31, 2000......     121,111      207,882            -        (621,033)       75,814      2,681,108

Net income......................           -            -            -               -             -        639,137 $    639,137
Unrealized investment gains                -            -            -               -       (21,351)             -      (21,351)
(losses), net
Unrealized loss on derivatives,            -            -            -               -        (7,819)             -       (7,819)
net
                                                                                                                    --------------
Comprehensive income............           -            -            -               -             -              - $    609,967
                                                                                                                    ==============
Dividends declared..............           -            -            -               -             -        (10,685)
Repurchase of outstanding
  common shares.................           -            -            -         (73,488)            -              -
Reissuance of treasury stock....           -        6,158            -          23,353             -              -
                                 ------------  -----------  ------------ --------------  ------------  -------------

Balance, December 31, 2001......     121,111      214,040            -        (671,168)       46,644      3,309,560

Net income......................           -            -            -               -             -        629,191 $    629,191
Unrealized investment gains
(losses),                                  -            -            -               -       114,724              -      114,724
  net (note 4)..................
Unrealized loss on derivatives,
  net (note 5)..................           -            -            -               -          (442)             -         (442)
Minimum pension liability
adjustment,                                -            -            -               -       (13,018)             -      (13,018)
  net (note 9)..................
                                                                                                                    --------------
Comprehensive income............           -            -            -               -             -              - $    730,455
                                                                                                                    ==============
Change in members' equity.......           -            -          380               -             -              -
Dividends declared..............           -            -            -               -             -        (10,358)
Common stock shares issued......         308       16,101            -               -             -              -
Repurchase of outstanding
  common shares.................           -            -            -        (373,281)            -              -
Reissuance of treasury stock....           -        2,809            -           8,591             -              -
                                 ------------  -----------  ------------ --------------  ------------    -----------

Balance, December 31, 2002...... $   121,419   $  232,950   $      380   $  (1,035,858)  $   147,908   $  3,928,393
                                                                                                       =============
                                 ============  ===========  ============ ==============  ============



              See accompanying notes to consolidated financial statements.

</TABLE>



                                  -------------
                                    seventeen
                                  -------------


<PAGE>


<TABLE>
<CAPTION>
                                             MGIC INVESTMENT CORPORATION & SUBSIDIARIES
                                            Years Ended December 31, 2002, 2001 and 2000
                   ------------------------------------------------------------------------------------------------
                                                Consolidated Statement of Cash Flows
                   ------------------------------------------------------------------------------------------------



                                                                           2002                2001               2000
                                                                      ----------------    ---------------    ----------------
                                                                                    (In thousands of dollars)
<S>                                                                   <C>                 <C>                <C>           
Cash flows from operating activities:
   Net income.......................................................  $      629,191      $      639,137     $      541,999
   Adjustments to reconcile net income to net cash provided by
     operating activities:
       Amortization of deferred insurance policy
         acquisition costs..........................................          25,862              22,233             20,597
       Increase in deferred insurance policy acquisition costs......         (25,606)            (28,521)           (24,086)
       Depreciation and other amortization..........................          12,292               8,281              6,860
       Decrease (increase) in accrued investment income.............             604              (7,617)            (4,706)
       Decrease in reinsurance recoverable on loss reserves.........           5,843               6,338              2,595
       Decrease (increase) in reinsurance recoverable on
         unearned premiums..........................................             235                 265             (2,050)
       Increase (decrease) in loss reserves.........................         119,517               4,118            (32,432)
       Decrease in unearned premiums................................          (4,378)             (6,179)              (654)
       Equity earnings in joint ventures............................         (81,240)            (28,097)           (18,113)
       Other........................................................         (68,990)             16,161             61,027
                                                                      ----------------    ---------------    ----------------

Net cash provided by operating activities...........................         613,330             626,119            551,037
                                                                      ----------------    ---------------    ----------------

Cash flows from investing activities:
   Purchase of equity securities....................................               -                 (71)           (14,629)
   Purchase of fixed maturities.....................................      (2,804,029)         (2,801,654)        (1,807,718)
   Investments in joint ventures....................................         (17,528)            (15,000)           (19,180)
   Proceeds from sale of equity securities..........................          12,465               1,685             14,029
   Proceeds from sale or maturity of fixed maturities...............       2,287,018           2,213,289          1,349,398
                                                                      ----------------    ---------------    ----------------

Net cash used in investing activities...............................        (522,074)           (601,751)          (478,100)
                                                                      ----------------    ---------------    ----------------

Cash flows from financing activities:
   Dividends paid to shareholders...................................         (10,358)            (10,685)           (10,618)
   Proceeds from issuance of short- and long-term debt..............         202,087             205,521            309,079
   Repayment of short- and long-term debt...........................               -            (133,384)          (336,751)
   Reissuance of treasury stock.....................................           6,179              16,830             18,699
   Repurchase of common stock.......................................        (373,070)            (73,488)            (6,224)
   Common stock shares issued.......................................          10,825                   -                  -
                                                                      ----------------    ---------------    ----------------

Net cash (used in) provided by financing activities.................        (164,337)              4,794            (25,815)
                                                                      ----------------    ---------------    ----------------

Net (decrease) increase in cash and cash equivalents................         (73,081)             29,162             47,122
Cash and cash equivalents at beginning of year......................         186,352             157,190            110,068
                                                                      ----------------    ---------------    ----------------

Cash and cash equivalents at end of year............................  $      113,271      $      186,352     $      157,190
                                                                      ================    ===============    ================


</TABLE>


              See accompanying notes to consolidated financial statements.



                                  -------------
                                    eighteen
                                  -------------


<PAGE>


  MGIC Investment Corporation & Subsidiaries-- December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------
                   Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

1.   Nature of business

     MGIC Investment Corporation ("Company") is a holding company which, through
Mortgage Guaranty Insurance Corporation ("MGIC") and several other subsidiaries,
is principally engaged in the mortgage insurance business. The Company provides
mortgage insurance to lenders throughout the United States to protect against
loss from defaults on low down payment residential mortgage loans. Through
certain other non-insurance subsidiaries, the Company also provides various
services for the mortgage finance industry, such as contract underwriting and
portfolio analysis and retention.

     At December 31, 2002, the Company's direct primary insurance in force
(representing the principal balance in the Company's records of all mortgage
loans that it insures) and direct primary risk in force (representing the
insurance in force multiplied by the insurance coverage percentage), excluding
MGIC Indemnity Corporation ("MIC") was approximately $197.0 billion and $49.2
billion, respectively. In addition to providing direct primary insurance
coverage, the Company also insures pools of mortgage loans. The Company's direct
pool risk in force at December 31, 2002 was approximately $2.6 billion. MIC's
direct primary insurance in force, direct primary risk in force and direct pool
risk in force was approximately $0.4 billion, $0.3 billion and $0.2 billion,
respectively, at December 31, 2002.

2.   Basis of presentation and summary of significant accounting policies

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.

Principles of consolidation
     The consolidated financial statements include the accounts of MGIC
Investment Corporation and its wholly-owned subsidiaries. All intercompany
transactions have been eliminated. The Company's 45.9% investment in
Credit-Based Asset Servicing and Securitization LLC ("C-BASS") and 45.5%
investment in Sherman Financial Group LLC, ("Sherman"), which are joint ventures
with Radian Group Inc., are accounted for using the equity method of accounting
and recorded on the balance sheet as investments in joint ventures. The
Company's equity earnings from these joint ventures are included in other
revenue. (See note 8.)

     The Company has certain other joint ventures and investments, accounted for
in accordance with the equity method of accounting, of an immaterial amount.

Investments
     The Company categorizes its investment portfolio according to its ability
and intent to hold the investments to maturity. Investments which the Company
does not have the ability and intent to hold to maturity are considered to be
available-for-sale and are reported at fair value and the related unrealized
gains or losses are, after considering the related tax expense or benefit,
recognized as a component of accumulated other comprehensive income in
shareholders' equity in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 115, Accounting for Certain Investments in Debt and
Equity Securities. The Company's entire investment portfolio is classified as
available-for-sale. Realized investment gains and losses are reported in income
based upon specific identification of securities sold. (See note 4.)

Home office and equipment
     Home office and equipment is carried at cost net of depreciation. For
financial statement reporting purposes, depreciation is determined on a
straight-line basis for the home office, equipment and data processing hardware
over estimated lives of 45, 5 and 3 years, respectively. For income tax
purposes, the Company uses accelerated depreciation methods.

     Home office and equipment is shown net of accumulated depreciation of $38.6
million and 

                                  -------------
                                    nineteen
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

$34.9 million at December 31, 2002 and 2001, respectively. Depreciation expense
for the years ended December 31, 2002, 2001 and 2000 was $5.5 million, $4.9
million and $4.7 million, respectively.

Deferred insurance policy acquisition costs
     Costs associated with the acquisition of mortgage insurance business,
consisting of employee compensation and other policy issuance and underwriting
expenses, are initially deferred and reported as deferred insurance policy
acquisition costs ("DAC"). Because SFAS No. 60, Accounting and Reporting by
Insurance Enterprises, specifically excludes mortgage guaranty insurance from
its guidance relating to the amortization of DAC, amortization of these costs
for each underwriting year book of business is charged against revenue in
proportion to estimated gross profits over the estimated life of the policies
using the guidance of SFAS No. 97, Accounting and Reporting by Insurance
Enterprises For Certain Long Duration Contracts and Realized Gains and Losses
From the Sale of Investments. This includes accruing interest on the unamortized
balance of DAC. The estimates for each underwriting year are updated annually to
reflect actual experience and any changes to key assumptions such as persistency
or loss development.

     During 2002, 2001 and 2000, the Company amortized $25.9 million, $22.2
million and $20.6 million, respectively, of deferred insurance policy
acquisition costs.

Loss reserves
     Reserves are established for reported insurance losses and loss adjustment
expenses based on when notices of default on insured mortgage loans are
received. Reserves are also established for estimated losses incurred on notices
of default not yet reported by the lender. Consistent with industry practices,
the Company does not establish loss reserves for future claims on insured loans
which are not currently in default. Reserves are established by management using
estimated claims rates and claims amounts in estimating the ultimate loss.
Amounts for salvage recoverable are considered in the determination of the
reserve estimates. Adjustments to reserve estimates are reflected in the
financial statements in the years in which the adjustments are made. The
liability for reinsurance assumed is based on information provided by the ceding
companies.

     The incurred but not reported ("IBNR") reserves result from defaults
occurring prior to the close of an accounting period, but which have not been
reported to the Company. Consistent with reserves for reported defaults, IBNR
reserves are established using estimated claims rates and claims amounts for the
estimated number of defaults not reported.

     Reserves also provide for the estimated costs of settling claims, including
legal and other expenses and general expenses of administering the claims
settlement process. (See note 6.)

Revenue recognition
     The insurance subsidiaries write policies which are guaranteed renewable
contracts at the insured's option on a single, annual or monthly premium basis.
The insurance subsidiaries have no ability to reunderwrite or reprice these
contracts. Premiums written on a single premium basis and an annual premium
basis are initially deferred as unearned premium reserve and earned over the
policy term. Premiums written on policies covering more than one year are
amortized over the policy life in accordance with the expiration of risk which
is the anticipated claim payment pattern based on historical experience.
Premiums written on annual policies are earned on a monthly pro rata basis.
Premiums written on monthly policies are earned as coverage is provided.

     Fee income of the non-insurance subsidiaries is earned and recognized as
the services are provided and the customer is obligated to pay.

Income taxes
     The Company and its subsidiaries file a consolidated federal income tax
return. A formal tax sharing agreement exists between the Company and its
subsidiaries. Each subsidiary determines income taxes based upon the utilization
of all tax deferral elections available. This assumes tax and loss bonds are
purchased and held to the extent they would have been purchased and held on a
separate company basis since the tax sharing agreement provides that the
redemption 

                                  -------------
                                     twenty
                                  -------------


<PAGE>

                       ----------------------------------
                                Notes (continued)
                       ----------------------------------

or non-purchase of such bonds shall not increase such member's separate taxable
income and tax liability on a separate company basis.

     Federal tax law permits mortgage guaranty insurance companies to deduct
from taxable income, subject to certain limitations, the amounts added to
contingency loss reserves. Generally, the amounts so deducted must be included
in taxable income in the tenth subsequent year. The deduction is allowed only to
the extent that U.S. government non-interest bearing tax and loss bonds are
purchased and held in an amount equal to the tax benefit attributable to such
deduction. The Company accounts for these purchases as a payment of current
federal income taxes.

     Deferred income taxes are provided under the liability method, in
accordance with SFAS No. 109, Accounting for Income Taxes, which recognizes the
future tax effects of temporary differences between amounts reported in the
financial statements and the tax bases of these items. The expected tax effects
are computed at the current federal tax rate. (See note 10.)

Benefit plans
     The Company has a non-contributory defined benefit pension plan covering
substantially all employees. Retirement benefits are based on compensation and
years of service. The Company's policy is to fund pension cost as required under
the Employee Retirement Income Security Act of 1974. (See note 9.)

     The Company accrues the estimated costs of retiree medical and life
benefits over the period during which employees render the service that
qualifies them for benefits. The Company offers both medical and dental benefits
for retired employees and their spouses. Benefits are generally funded on a
pay-as-you-go basis. The cost to the Company was not significant in 2002, 2001
and 2000. (See note 9.)

Stock-based compensation
     The Company has certain stock-based compensation plans, as more fully
discussed in Note 11. The Company accounts for these plans under the expense and
measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. The following table illustrates the
effect on net income and earnings per share if the fair value based method under
SFAS No. 123, Accounting for Stock-Based Compensation, had been applied to all
outstanding and unvested awards in each period (in thousands, except per share
amounts).

                                   Years Ended December 31,
                              -----------------------------------
                                2002        2001         2000
                              ----------  ----------  -----------

Net income, as reported...    $ 629,191   $  639,137  $  541,999
Add stock-based employee
  compensation expense
  included in reported
  earning, net of tax.....        2,610        2,038       1,840
Deduct stock-based
  employee compensation
  expense, determined  
  under the fair value
  method, net of tax......      (12,425)     (13,483)    (11,374)
                              ----------  ----------  -----------
Pro forma net income......    $ 619,376   $  627,692  $  532,465
                              ==========  ==========  ===========

Earnings per share:
  Basic, as reported......    $     6.07  $      5.98 $      5.10
  Basic, pro forma........    $     5.97  $      5.87 $      5.01

  Diluted, as reported....    $     6.04  $      5.93 $      5.05
  Diluted, pro forma......    $     5.94  $      5.82 $      4.96

Reinsurance
     Loss reserves and unearned premiums are reported before taking credit for
amounts ceded under reinsurance treaties. Ceded loss reserves are reflected as
"Reinsurance recoverable on loss reserves." Ceded unearned premiums are
reflected as "Reinsurance recoverable on unearned premiums." The Company remains
contingently liable for all reinsurance ceded. (See note 7.)

Earnings per share
     The Company's basic and diluted earnings per share ("EPS") have been
calculated in accordance with SFAS No. 128, Earnings Per Share. The Company's
net income is the same for both basic and diluted EPS. Basic EPS is based on the
weighted-average number of common shares outstanding. Diluted EPS is based on
the weighted-average number of common shares outstanding and common stock
equivalents which would arise from the exercise of stock options. The following
is a reconciliation of the weighted-average number of shares used for basic EPS
and diluted EPS. (See note 11.)

                                  -------------
                                   twenty-one
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

                                   Years Ended December 31,
                              -----------------------------------
                                2002        2001         2000
                              ----------  ----------  -----------
                                    (shares in thousands)
Weighted-average shares -       103,725      106,941     106,202
Basic
Common stock equivalents            489          854       1,058
                              ----------  ----------  -----------

Weighted-average shares -
  Diluted                       104,214      107,795     107,260
                              ==========  ==========  ===========

Statement of cash flows
     For purposes of the consolidated statement of cash flows, the Company
considers short-term investments with original maturities of three months or
less to be cash equivalents.

Comprehensive income
     The Company's total comprehensive income, as calculated per SFAS No. 130,
Reporting Comprehensive Income, was as follows:

                                    Years Ended December 31,
                               -----------------------------------
                                 2002        2001         2000
                               ----------  ----------  -----------
                                   (in thousands of dollars)
Net income...................  $ 629,191   $  639,137  $  541,999
Other comprehensive
  income (loss)..............    101,264      (29,170)    116,549
                               ----------  ----------  -----------
    Total comprehensive        $ 730,455   $  609,967  $  658,548
income
                               ==========  ==========  ===========

Other comprehensive
  income (loss) (net of tax): 
  Cumulative effect - SFAS
    No. 133..................  $     N/A   $   (5,982) $      N/A
  Net derivative losses......     (1,524)      (2,919)        N/A
  Amortization of deferred
losses                             1,082        1,082         N/A
  Unrealized gain (loss) on
    investments..............    114,724      (21,351)    116,549
  Minimum pension liability
    adjustment...............    (13,018)           -           -
                               ----------  ----------  -----------
Other comprehensive
  income (loss)..............  $ 101,264   $  (29,170) $  116,549
                               ==========  ==========  ===========

    The difference between the Company's net income and total comprehensive
income for the years ended December 31, 2002, 2001 and 2000 is due to the change
in unrealized appreciation/ depreciation on investments, the cumulative effect
of the adoption of SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, the fair value adjustment and amortization of deferred
losses relating to derivative financial instruments and a minimum pension
liability adjustment, all net of tax. At December 31, 2002, accumulated other
comprehensive income of $147.9 million includes $169.2 million of net unrealized
gains on investments, ($13.0) million relating to the minimum pension liability
and ($8.3) million relating to derivative financial instruments. (See notes 4, 5
and 9.) 

Recent accounting pronouncements
    The Company adopted SFAS No. 133 effective January 1, 2001. The statement
establishes accounting and reporting standards for derivative instruments and
for hedging activities. The adoption of SFAS No. 133 did not have a significant
effect on the Company's results of operations or its financial position due to
its limited use of derivative instruments. (See note 5.)

    In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets. Under SFAS No. 142, goodwill and intangible assets with indefinite
useful lives are no longer amortized, but rather, are subject to review for
impairment. The Company adopted SFAS No. 142, effective January 1, 2002. The
adoption had an immaterial impact on the Company's financial statements.

    In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which is effective for fiscal years beginning
after December 15, 2001. Adoption of SFAS No. 144 in 2002 had no effect on the
Company's financial statements.

Reclassifications
    Certain reclassifications have been made in the accompanying financial
statements to 2001 and 2000 amounts to allow for consistent financial reporting.

3.     Related party transactions

    The Company provided certain services to C-BASS in 2002, 2001 and 2000 in
exchange for an immaterial amount of fees. In addition, C-BASS provided certain
services to the Company during 2002, 2001 and 2000 in exchange for an immaterial
amount of fees.


                                  -------------
                                   twenty-two
                                  -------------


<PAGE>

                       ----------------------------------
                                Notes (continued)
                       ----------------------------------

4.   Investments

    The following table summarizes the Company's investments at December 31,
2002 and 2001:


<TABLE>
<CAPTION>
                                                                                                                    Financial
                                                                                Amortized            Fair           Statement
                                                                                   Cost             Value             Value
                                                                              ---------------   ---------------   ---------------
                                                                                           (In thousands of dollars)
<S>                                                                           <C>               <C>                <C>          
At December 31, 2002:
   Securities, available-for-sale:
     Fixed maturities........................................................ $   4,353,174     $    4,613,462     $   4,613,462
     Equity securities.......................................................        10,779             10,780            10,780
     Short-term investments..................................................       102,230            102,230           102,230
                                                                              ---------------   ---------------    --------------

   Total investment portfolio................................................ $   4,466,183     $    4,726,472     $   4,726,472
                                                                              ===============   ===============    ==============

At December 31, 2001:
   Securities, available-for-sale:
     Fixed maturities........................................................ $   3,804,274     $    3,888,740     $   3,888,740
     Equity securities.......................................................        21,481             20,747            20,747
     Short-term investments..................................................       159,901            159,960           159,960
                                                                              ---------------   ---------------    --------------

   Total investment portfolio................................................ $   3,985,656     $    4,069,447    $    4,069,447
                                                                              ===============   ===============   ===============
</TABLE>


    The amortized cost and fair value of investments at December 31, 2002 are as
follows:


<TABLE>
<CAPTION>
                                                                                    Gross             Gross
                                                                Amortized         Unrealized        Unrealized           Fair
December 31, 2002:                                                 Cost             Gains             Losses            Value
                                                              ---------------   ---------------   ---------------   ---------------
                                                                                   (In thousands of dollars)
<S>                                                           <C>               <C>               <C>               <C>           
U.S. Treasury securities and obligations of U.S. government
   corporations and agencies................................  $     392,346     $      11,929     $          (3)    $      404,272
Obligations of states and political subdivisions............      3,725,062           232,487            (1,267)         3,956,282
Corporate securities........................................        247,828            12,586              (100)           260,314
Mortgage-backed securities..................................         76,154             2,971                (5)            79,120
Debt securities issued by foreign sovereign governments.....         14,014             1,690                 -             15,704
                                                              ---------------   ---------------   ---------------   ---------------

   Total debt securities....................................      4,455,404           261,663            (1,375)         4,715,692

Equity securities...........................................         10,779                 1                 -             10,780
                                                              ---------------   ---------------   ---------------   ---------------

   Total investment portfolio...............................  $   4,466,183     $     261,664     $      (1,375)    $    4,726,472
                                                              ===============   ===============   ===============   ===============
</TABLE>


    The amortized cost and fair value of investments at December 31, 2001 are as
follows:


<TABLE>
<CAPTION>
                                                                                    Gross             Gross
                                                                Amortized         Unrealized        Unrealized           Fair
December 31, 2001:                                                 Cost             Gains             Losses            Value
                                                              ---------------   ---------------   ---------------   ---------------
                                                                                   (In thousands of dollars)
<S>                                                           <C>               <C>               <C>               <C>           
U.S. Treasury securities and obligations of U.S. government
   corporations and agencies................................  $     307,761     $       3,486     $      (5,799)    $      305,448
Obligations of states and political subdivisions............      2,998,688            85,336           (14,513)         3,069,511
Corporate securities........................................        564,659            15,201            (1,497)           578,363
Mortgage-backed securities..................................         79,082             1,089                 -             80,171
Debt securities issued by foreign sovereign governments.....         13,985             1,222                 -             15,207
                                                              ---------------   ---------------   ---------------   ---------------

   Total debt securities....................................      3,964,175           106,334           (21,809)         4,048,700

Equity securities...........................................         21,481                 -              (734)            20,747
                                                              ---------------   ---------------   ---------------   ---------------

   Total investment portfolio...............................  $   3,985,656     $     106,334     $     (22,543)    $    4,069,447
                                                              ===============   ===============   ===============   ===============

</TABLE>



                                  -------------
                                  twenty-three
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

    The amortized cost and fair values of debt securities at December 31, 2002,
by contractual maturity, are shown below. Debt securities consist of fixed
maturities and short-term investments. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

                                 Amortized          Fair
                                    Cost            Value
                                -------------    ------------
                                 (In thousands of dollars)
Due in one year or less........ $   174,754      $   175,766
Due after one year through
  five years...................     738,608          774,812
Due after five years through
  ten years....................   1,039,705        1,108,558
Due after ten years............   2,426,183        2,577,436
                                -------------    ------------

                                  4,379,250        4,636,572

Mortgage-backed securities.....      76,154           79,120
                                -------------    ------------

Total at December 31, 2002..... $ 4,455,404      $ 4,715,692
                                =============    ============

    Net investment income is comprised of the following:

                           2002         2001         2000
                        -----------  -----------   ----------
                             (In thousands of dollars)
Fixed maturities....... $  199,472   $  195,821    $ 167,810
Equity securities......      3,707        2,953        1,279
Short-term investments.      5,611        6,863       10,673
Other .................        832          495          341
                        -----------  -----------   ----------

Investment income......    209,622      206,132      180,103
Investment expenses....     (2,106)      (1,739)      (1,568)
                        -----------  -----------   ----------

Net investment income.. $  207,516   $  204,393    $ 178,535
                        ===========  ===========   ==========

    The net realized investment gains (losses) and change in net unrealized
appreciation (depreciation) of investments are as follows:

                                2002         2001         2000
                              ----------   ----------   ----------
                                   (In thousands of dollars)
Net realized investment 
 gains (losses), on sale 
 of investments:

    Fixed maturities........  $  38,357    $   38,199   $    1,440
    Equity securities.......     (9,283)         (876)           -
    Short-term investments..         39            29           (8)
                              ----------   ----------   ----------

                                 29,113        37,352        1,432
                              ----------   ----------   ----------
Change in net unrealized
  appreciation
  (depreciation):

    Fixed maturities........    175,822       (32,032)     182,387
    Equity securities.......        735          (873)      (3,084)
    Short-term investments..        (59)           59            -
                              ----------   ----------   ----------

                                176,498       (32,846)     179,303
                              ----------   ----------   ----------

Net realized investment
  gains (losses) and change
  in net unrealized           $ 205,611    $    4,506   $  180,735
  appreciation (depreciation) ==========   ==========   ==========

     The gross realized gains and the gross realized losses on sales of
securities were $47.2 million and $18.1 million, respectively, in 2002, $50.8
million and $13.4 million, respectively, in 2001 and $18.2 million and $16.8
million, respectively, in 2000.

     The tax (benefit) expense of the changes in net unrealized (depreciation)
appreciation was $61.8 million, ($11.5) million and $62.8 million for 2002, 2001
and 2000, respectively.

5.   Short- and long-term debt

     During the first quarter of 2001, the Company established a $200 million
commercial paper program, which was rated `A-1' by Standard and Poors ("S&P")
and `P-1' by Moody's. At December 31, 2002 and 2001, the Company had $177.3
million and $172.1 million in commercial paper outstanding with a weighted
average interest rate of 1.46% and 1.91% at December 31, 2002 and 2001,
respectively.

     The Company had a $285 million credit facility available at December 31,
2002, expiring in 2006. Under the terms of the credit facility, as amended in
July 2002, the Company must maintain shareholders' equity of at least $2.25
billion and MGIC must maintain a risk-to-capital ratio of not more than 22:1 and
maintain policyholders' position (which includes MGIC's surplus and its
contingency reserve) of not less than the amount required by Wisconsin insurance
regulation. At December 31, 2002, the Company met these requirements. The
facility is currently being used as a liquidity back-up facility for the
outstanding commercial paper. The remaining credit available under the facility
after reduction for the amount necessary to support the commercial paper was
$107.7 million at December 31, 2002.

     In March of 2002, the Company issued, in a public offering, $200 million,
6% Senior Notes due in 2007. The notes are unsecured and were rated `A1' by
Moody's, `A+' by S&P and `AA-' by Fitch. The Company had $300 million, 7.5%
Senior Notes due in 2005 outstanding at December 31, 2002 and 2001.

                                  -------------
                                   twenty-four
                                  -------------


<PAGE>

                       ----------------------------------
                                Notes (continued)
                       ----------------------------------


     Interest payments on all long-term and short-term debt were $36.2 million,
$22.6 million and $27.1 million for the years ended December 31, 2002, 2001 and
2000, respectively. At December 31, 2002, the market value of the outstanding
debt is $721.9 million.

    The Company uses interest rate swaps to hedge interest rate exposure
associated with its short- and long-term debt. In 2000, the Company paid an
interest rate based on LIBOR and received a fixed rate of 7.5% to hedge the
5-year Senior Notes issued in the fourth quarter of 2000. These swaps were
terminated in September 2001. In January 2002, the Company initiated a new swap
which was designated as a fair value hedge of the 7.5% Senior Notes. This swap
was terminated in June 2002. In May 2002, a swap designated as a cash flow hedge
was amended to coincide with the new credit facility. Under the terms of the
swap contract, the Company pays a fixed rate of 5.43% and receives an interest
rate based on LIBOR. The swap has an expiration date coinciding with the
maturity of the credit facility and is designated as a cash flow hedge. Gains or
losses arising from the amendment or termination of interest rate swaps are
deferred and amortized to interest expense over the life of the hedged items.
Expenses on the swaps during 2002 and 2001, of approximately $1.8 million and
$3.7 million, respectively, were included in interest expense. The cash flow
swap outstanding at December 31, 2002 and 2001 is evaluated quarterly using
regression analysis with any ineffectiveness being recorded as an expense. To
date this evaluation has not resulted in any hedge ineffectiveness. The swaps
are subject to credit risk to the extent the counterparty would be unable to
discharge its obligations under the swap agreements.

6.   Loss reserves

    Loss reserve activity was as follows:

                               2002         2001         2000
                            -----------  -----------  ------------
                                  (In thousands of dollars)

Reserve at beginning
of year                     $  613,664   $  609,546   $  641,978
Less reinsurance
  recoverable.............      26,888       33,226       35,821
                            -----------  -----------  ------------
Net reserve at beginning
  of year.................     586,776      576,320      606,157
Reserve transfer (1)......           -            -           85
                            -----------  -----------  ------------
Adjusted reserve at
  beginning of year.......     586,776      576,320      606,242

Losses incurred:
  Losses and LAE incurred
    in respect of default
    notices received in:
      Current year........     440,004      372,940      320,769
      Prior years (2).....     (74,252)    (212,126)    (229,046)
                            -----------  -----------  ------------

        Subtotal..........     365,752      160,814       91,723
                            -----------  -----------  ------------

Losses paid:
  Losses and LAE paid in
    respect of default
    notices received in:
      Current year........      19,546       14,047        9,044
      Prior years.........     220,846      136,311      112,601
                            -----------  -----------  ------------

        Subtotal..........     240,392      150,358      121,645
                            -----------  -----------  ------------

Net reserve at end of year     712,136      586,776      576,320

Plus reinsurance
recoverables..............      21,045       26,888       33,226
                            -----------  -----------  ------------

Reserve at end of year....  $  733,181   $  613,664   $  609,546
                            ===========  ===========  ============

(1)  Received in conjunction with the cancellation of certain reinsurance
     treaties. (See note 7.)

(2)  A negative number for a prior year indicates a redundancy of loss reserves,
     and a positive number for a prior year indicates a deficiency of loss
     reserves.

     The top portion of the table above shows losses incurred on default notices
received in the current year and in prior years, respectively. The amount of
losses incurred relating to default notices received in the current year
represents the estimated amount to be ultimately paid on such default notices.
The amount of losses incurred relating to default notices received in prior
years represents an adjustment made in the current year for defaults which were
included in the loss reserve at the end of the prior year.

     Current year losses incurred increased from 2001 to 2002 primarily due to
an increase in the primary notice inventory related to bulk default activity and
defaults arising from the early development of the 2000 and 2001 flow books of
business as well as a modest increase in losses paid. The primary insurance
notice inventory increased from 54,653 at December 31, 2001 to 73,648 at
December 31, 2002 and pool insurance notice 

                                  -------------
                                   twenty-five
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

inventory increased from 23,623 at December 31, 2001 to 26,676 at December 31,
2002. The average claim paid for 2002 was $20,115 compared to $18,607 in 2001.
In 2002, the primary determinant of incurred losses has been the level and
composition of the notice inventory, rather than claim severity.

     The favorable development of the reserves in 2002, 2001 and 2000 is
reflected in the prior year line, and results from the actual claim rates and
actual claim amounts being lower than those estimated by the Company when
originally establishing the reserve at December 31, 2001, 2000 and 1999,
respectively.

     The lower portion of the table above shows the breakdown between claims
paid on default notices received in the current year and default notices
received in prior years. Since it takes, on average, about twelve months for a
default which is not cured to develop into a paid claim, most losses paid relate
to default notices received in prior years.

     Information about the composition of the primary insurance default
inventory at December 2002 and 2001 appears in the table below.

                                December 31,     December 31,
                                    2002            2001
                                -------------    ------------

Total loans delinquent.........     73,648          54,653
Percentage of loans delinquent
  (default rate)...............      4.45%           3.46%

Flow loans delinquent..........     43,196          36,193
Percentage of flow loans
  delinquent (default rate)....      3.19%           2.65%

Bulk loans delinquent..........     30,452          18,460
Percentage of bulk loans
  delinquent (default rate)....     10.09%           8.59%

A-minus and subprime credit
  loans delinquent (1).........     25,504          15,649
Percentage of A-minus and
  subprime credit loans
  delinquent (default rate)....     12.68%          11.60%

(1)  A portion of A-minus and subprime credit loans is included in flow loans
     delinquent and the remainder is included in bulk loans delinquent. Most
     A-minus and subprime credit loans are written through the bulk channel.

7.   Reinsurance

     The Company cedes a portion of its business to reinsurers and records
assets for reinsurance recoverable on estimated reserves for unpaid losses and
unearned premiums. Business written between 1985 and 1993 is ceded under various
quota share reinsurance agreements with several reinsurers. The Company receives
a ceding commission in connection with this reinsurance. Beginning in 1997, the
Company has ceded business to captive reinsurance subsidiaries of certain
mortgage lenders primarily under excess of loss agreements.

     The reinsurance recoverable on loss reserves and the reinsurance
recoverable on unearned premiums primarily represent amounts recoverable from
large international reinsurers. The Company monitors the financial strength of
its reinsurers including their claims paying ability rating and does not
currently anticipate any collection problems. Generally, reinsurance
recoverables on loss reserves and unearned premiums are backed by trust funds or
letters of credit. No reinsurer represents more than $10 million of the
aggregate amount recoverable.

     The effect of these agreements on premiums earned and losses incurred is as
follows:

                           2002           2001           2000
                        ------------   ------------   ------------
                                (In thousands of dollars)
Premiums earned:
  Direct..............  $ 1,296,548    $ 1,107,168    $  939,981
  Assumed.............         448            686            999
  Ceded ..............    (114,898)       (65,587)       (50,889)
                        ------------   ------------   ------------

  Net premiums earned.  $ 1,182,098    $ 1,042,267    $  890,091
                        ============   ============   ============

Losses incurred:
  Direct..............  $  367,149     $  157,360     $   93,218
  Assumed.............        (208)          (123)            35
  Ceded ..............      (1,189)         3,577         (1,530)
                        ------------   ------------   ------------

  Net losses incurred.  $  365,752     $  160,814     $   91,723
                        ============   ============   ============

8.   Investments in joint ventures

     C-BASS is a mortgage investment and servicing firm specializing in
credit-sensitive single-family residential mortgage assets and residential
mortgage-backed securities. C-BASS principally invests in whole loans (including
subprime loans) and mezzanine and subordinated residential mortgage-backed
securities backed by non-conforming residential mortgage loans. C-BASS's
principal sources of revenues during the last three years were gains on
securitization and liquidation of mortgage-related assets, servicing fees and
net interest income (including accretion on mortgage securities), 

                                  -------------
                                   twenty-six
                                  -------------


<PAGE>


                       ----------------------------------
                                Notes (continued)
                       ----------------------------------

which revenue items were offset by unrealized losses. C-BASS's results of
operations are affected by the timing of its securitization transactions.
Virtually all of C-BASS's assets do not have readily ascertainable market values
and, as a result, their value for financial statement purposes is estimated by
the management of C-BASS. These estimates reflect the net present value of the
future expected cash flows from the assets, which in turn depend on, among other
things, estimates of the level of losses on the underlying mortgages and
prepayment activity by the mortgage borrowers. Market value adjustments could
impact C-BASS's results of operations and the Company's share of those results.

     Total consolidated assets of C-BASS at December 31, 2002 and 2001 were
approximately $1.8 billion and $1.3 billion, respectively. Total liabilities at
December 31, 2002 and 2001 were approximately $1.4 billion and $1.0 billion,
respectively, of which approximately $1.1 billion and $0.9 billion,
respectively, were funding arrangements, including accrued interest, virtually
all of which mature within one year or less. For the years ended December 31,
2002 and 2001, revenues of approximately $311 million and $216 million,
respectively, and expenses of approximately $173 million and $130 million,
respectively, resulted in income before tax of approximately $138 million and
$86 million, respectively. The Company's investment in C-BASS on an equity basis
at December 31, 2002 was $168.7 million.

    Sherman is engaged in the business of purchasing and servicing delinquent
consumer assets such as credit card loans and Chapter 13 bankruptcy debt. A
substantial portion of Sherman's consolidated assets are investments in consumer
receivable portfolios that do not have readily ascertainable market values.
Sherman's results of operations are sensitive to estimates by Sherman's
management of ultimate collections on these portfolios. The Company's investment
in Sherman on an equity basis at December 31, 2002 was $54.4 million.

    Because C-BASS and Sherman are accounted for by the equity method, they are
not consolidated with the Company and their assets and liabilities do not appear
in the Company's balance sheet. The "investments in joint ventures" item in the
Company's balance sheet reflects the amount of capital contributed by the
Company to the joint ventures plus the Company's share of their net income (or
minus its share of their net loss) and minus capital distributed to the Company
by the joint ventures. (See note 2.)


                                  -------------
                                  twenty-seven
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

9.   Benefit plans

     The following tables provide reconciliations of the changes in the benefit
obligation, fair value of plan assets and funded status of the pension and other
postretirement benefit plans:


<TABLE>
<CAPTION>
                                                                                                         Other Postretirement
                                                                              Pension Benefits                 Benefits
                                                                          --------------------------   --------------------------
                                                                             2002           2001          2002          2001
                                                                          ------------   -----------   ------------  ------------
                                                                                        (In thousands of dollars)
<S>                                                                       <C>            <C>           <C>           <C>        
Reconciliation of benefit obligation:
Benefit obligation at beginning of year.................................  $   91,629     $   74,182    $   36,732    $    27,924
   Service cost.........................................................       6,580          5,113         3,136          2,065
   Interest cost........................................................       6,585          5,518         2,711          2,056
   Plan amendment (1)...................................................       2,092          1,202             -              -
   Actuarial loss (gain)................................................       5,708          6,838         4,361          5,336
   Benefits paid........................................................      (1,409)        (1,224)         (630)          (649)
                                                                          ------------   -----------   ------------  ------------

Benefit obligation at end of year.......................................  $  111,185     $   91,629    $   46,310    $    36,732
                                                                          ============   ===========   ============  ============

Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of year..........................  $   90,159     $   86,285    $   14,102    $    13,556
   Actual return on plan assets.........................................     (17,288)        (4,385)       (3,004)        (1,095)
   Employer contributions...............................................      19,703          9,483         2,088          1,641
   Benefits paid........................................................      (1,409)        (1,224)            -              -
                                                                          ------------   -----------   ------------  ------------

Fair value of plan assets at end of year................................  $   91,165     $   90,159    $   13,186    $    14,102
                                                                          ============   ===========   ============  ============

Reconciliation of funded status:
Benefit obligation at end of year.......................................  $ (111,185)    $  (91,629)   $  (46,310)   $   (36,732)
Fair value of plan assets at end of year................................      91,165         90,159        13,186         14,102
                                                                          ------------   -----------   ------------  ------------
Funded status at end of year............................................     (20,020)        (1,470)      (33,124)       (22,630)
   Unrecognized net actuarial loss (gain)...............................      38,506          8,935        12,346          4,075
   Unrecognized net transition obligation...............................           -              -         5,299          5,829
   Unrecognized prior service cost......................................       4,448          2,864             -              -
                                                                          ------------   -----------   ------------  ------------

Net amount recognized...................................................  $   22,934     $   10,329    $  (15,479)   $   (12,726)
                                                                          ============   ===========   ============  ============

(1)  The plan has been amended to provide additional benefits for certain participants as listed in the plan
     documents and for the increased benefit and salary limits on the projected benefit obligation.
</TABLE>


     The following table provides the components of net periodic benefit cost
for the pension and other postretirement benefit plans:


<TABLE>
<CAPTION>
                                                                                                    Other Postretirement
                                                           Pension Benefits                               Benefits
                                               -----------------------------------------  -----------------------------------------
                                                  2002          2001           2000          2002           2001          2000
                                               ------------  ------------   ------------  ------------   ------------  ------------
                                                                            (In thousands of dollars)
<S>                                            <C>           <C>            <C>           <C>            <C>           <C>        
Service cost.................................  $    6,580    $     5,113    $    4,734    $     3,137    $    2,065    $     1,943
Interest cost................................       6,585          5,518         4,885          2,711         2,056          1,831
Expected return on plan assets...............      (6,712)        (6,350)       (6,496)        (1,058)       (1,016)        (1,009)
Recognized net actuarial loss (gain).........          32            (27)         (520)           152           (54)          (146)
Amortization of transition obligation........           -              -            32            530           530            530
Amortization of prior service cost...........         507            232           183              -             -              -
                                               ------------  ------------   ------------  ------------   ------------  ------------

Net periodic benefit cost....................  $    6,992    $     4,486    $    2,818    $     5,472    $    3,581    $     3,149
                                               ============  ============   ============  ============   ============  ============
</TABLE>


    The assumptions used in the measurement of the Company's pension and other
postretirement benefit obligations are shown in the following table:

                                  -------------
                                  twenty-eight
                                  -------------


<PAGE>


                       ----------------------------------
                                Notes (continued)
                       ----------------------------------


<TABLE>
<CAPTION>
                                                                                                   Other Postretirement
                                                             Pension Benefits                            Benefits
                                                 ----------------------------------------  ---------------------------------------
                                                    2002          2001           2000         2002          2001          2000
                                                 ------------  ------------   -----------  ----------   ------------  ------------
Weighted-average interest rate assumptions as 
 of December 31:
<S>                                                  <C>          <C>            <C>         <C>         <C>           <C>  
     Discount rate.............................      6.75%        7.00%          7.50%       6.75%       7.00%         7.50%
     Expected return on plan assets............      7.50%        7.50%          7.50%       7.50%       7.50%         7.50%
     Rate of compensation increase.............      4.50%        6.00%          6.00%        N/A         N/A           N/A

</TABLE>



    Plan assets consist of fixed maturities and equity securities. The Company
is amortizing the unrecognized transition obligation for other postretirement
benefits over 20 years.

    The assumed health care cost trend rates used in measuring the accumulated
postretirement benefit obligation are:

Medical..........  8.5% for 2002 graded down by 0.5% per year to 6.0% in 2007
                   and remaining level thereafter.
Dental...........  6.0% per year.

    A 1% change in the health care trend rate assumption would have the
following effects on other postretirement benefits:

                               1-Percentage     1-Percentage
                                   Point           Point
                                 Increase         Decrease
                               --------------   -------------
                                 (In thousands of dollars)
Effect on total service and
  interest cost components.... $       1,382    $    (1,103)
Effect on postretirement
  benefit obligation..........         9,895         (7,932)

    The Company has a profit sharing and 401(k) savings plan for employees. At
the discretion of the Board of Directors, the Company may make a profit sharing
contribution of up to 5% of each participant's compensation. The Company
provides a matching 401(k) savings contribution on employees' before-tax
contributions at a rate of 80% of the first $1,000 contributed and 40% of the
next $2,000 contributed. Profit sharing costs and the Company's matching
contributions to the 401(k) savings plan were $6.3 million, $5.8 million and
$4.7 million in 2002, 2001 and 2000, respectively.

10.  Income taxes

    The components of the net deferred tax liability as of December 31, 2002 and
2001 are as follows:

                                         2002           2001
                                      -----------    -----------
                                      (In thousands of dollars)
Unearned premium reserves............ $   (14,470)   $  (11,269)
Deferred policy acquisition costs....      11,155        11,244
Loss reserves........................      (6,163)       (4,009)
Unrealized appreciation                    86,653        25,116
  in investments.....................
Contingency loss reserves............      43,268        50,018
Mortgage investments.................      57,829        45,966
Litigation settlement................      (7,918)       (7,918)
Investments in joint ventures........      (9,804)        3,074
Other, net...........................     (12,145)       (5,772)
                                      -----------    -----------

Net deferred tax liability........... $   148,405    $  106,450
                                      ===========    ===========

    At December 31, 2002, gross deferred tax assets and liabilities amount to
$87.0 million and $235.4 million, respectively. Management believes that all
gross deferred tax assets at December 31, 2002 are fully realizable and no
valuation reserve is established.

    The following summarizes the components of the provision for income tax:

                           2002          2001          2000
                        -----------   -----------   -----------
                              (In thousands of dollars)
Federal:
  Current.............. $   277,536   $  248,679    $  208,949
  Deferred.............     (12,572)      40,376        34,476
State..................       3,487        3,718         3,377
                        -----------   -----------   -----------

Provision for income    $   268,451   $  292,773    $  246,802
tax
                        ===========   ===========   ===========

    The Company paid $261.3 million, $271.3 million and $199.9 million in
federal income tax in 2002, 2001 and 2000, respectively. At December 31, 2002
and 2001, the Company owned $1,181.9 million and $1,004.3 million, respectively,
of tax and loss bonds.

                                  -------------
                                   twenty-nine
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

    The reconciliation of the tax provision computed at the federal tax rate of
35% to the reported provision for income tax is as follows:

                           2002          2001          2000
                        -----------   -----------   -----------
                              (In thousands of dollars)
Tax provision computed
  at federal tax rate.. $   314,175   $  326,169    $  276,080
(Decrease) increase in 
 tax provision resulting 
 from:
    Tax exempt
      municipal bond        (46,381)     (35,715)      (32,350)
      interest.........
    Other, net.........         657        2,319         3,072
                        -----------   -----------   -----------

Provision for income    $   268,451   $  292,773    $  246,802
tax
                        ===========   ===========   ===========

11.  Shareholders' equity and dividend restrictions

     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 ("OCI") 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. As the result of an extraordinary
dividend paid by MGIC in February 2002, MGIC cannot pay any dividends without
regulatory approval until February 16, 2003. Thereafter, MGIC can pay $154.8
million of dividends. The other insurance subsidiaries of the Company can pay
$8.7 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 2002, 2001 and 2000, the Company paid dividends of $10.4 million, $10.7
million and $10.6 million, respectively, or $0.10 per share in 2002, 2001 and
2000.

     The principles used in determining statutory financial amounts differ from
GAAP, primarily for the following reasons:

     Under statutory accounting practices, mortgage guaranty insurance companies
     are required to maintain contingency loss reserves equal to 50% of premiums
     earned. Such amounts cannot be withdrawn for a period of ten years except
     as permitted by insurance regulations. Contingency loss reserves are not
     reflected as liabilities under GAAP.

     Under statutory accounting practices, insurance policy acquisition costs
     are charged against operations in the year incurred. Under GAAP, these
     costs are deferred and amortized as the related premiums are earned
     commensurate with the expiration of risk.

     Under statutory accounting practices, purchases of tax and loss bonds are
     accounted for as investments. Under GAAP, purchases of tax and loss bonds
     are recorded as payments of current income taxes.

     Under statutory accounting practices, fixed maturity investments are
     generally valued at amortized cost. Under GAAP, those investments which the
     Company does not have the ability and intent to hold to maturity are
     considered to be available-for-sale and are recorded at market, with the
     unrealized gain or loss recognized, net of tax, as an increase or decrease
     to shareholders' equity.

     Under statutory accounting practices, certain assets, designated as
     non-admitted assets, are charged directly against statutory surplus. Such
     assets are reflected on the GAAP financial statements.

                                  -------------
                                     thirty
                                  -------------


<PAGE>


                       ----------------------------------
                                Notes (continued)
                       ----------------------------------

The statutory net income, equity and the contingency reserve liability of the
insurance subsidiaries (excluding the non-insurance companies) are as follows:

 Year Ended           Net                    Contingency
December 31,         Income       Equity       Reserve
--------------     -----------  ------------ ------------
                         (In thousands of dollars)
    2002           $ 296,595    $ 1,634,707  $  3,521,100
    2001             426,294      1,451,808     3,039,332
    2000             348,137        991,343     2,616,653

    Effective January 1, 2001, the OCI required that insurance companies
domiciled in the State of Wisconsin prepare their statutory basis financial
statements in accordance with new guidance contained in the National Association
of Insurance Commissioners' "Accounting Practices and Procedures Manual" version
effective on that date. The effect of the adoption in 2001 did not have a
material impact on the Company's insurance subsidiaries' statutory surplus. The
most significant change affecting surplus is the requirement to record deferred
income taxes.

    The Company has 1991 and 2002 stock incentive plans. When the 2002 plan was
adopted in 2002, no further awards could be made under the 1991 plan. The number
of shares covered by awards under the 2002 plan is the total of 10 million
shares plus the number of shares covered by awards under the 1991 plan that were
outstanding on March 1, 2002 that are subsequently forfeited and the number of
shares that must be purchased at a purchase price of not less than the fair
market value of the shares as a condition to the award of restricted stock under
the 2002 plan. The maximum number of shares of restricted stock that can be
awarded under the 2002 plan is 1 million shares. Both plans provide for the
award of stock options with maximum terms of 10 years and for the grant of
restricted stock, and the 2002 plan also provides for the grant of stock
appreciation rights. The exercise price of options is the closing price of the
common stock on the New York Stock Exchange on the date of grant. The vesting
provisions of options and restricted stock are determined at the time of grant.
Directors may receive awards under the 2002 plan and were eligible for awards of
restricted stock under the 1991 plan.

    No awards under the 2002 plan were made in 2002. A summary of activity in
the 1991 stock option plans during 2000, 2001 and 2002 is as follows:

                                     Weighted
                                     Average         Shares
                                     Exercise      Subject to
                                      Price          Option
                                   -----------   -------------
Outstanding, December 31, 1999...  $    30.52       3,546,264

   Granted.......................       45.40         954,000
   Exercised.....................       16.91      (1,080,208)
   Canceled......................       37.96         (35,060)
                                                   -----------

Outstanding, December 31, 2000...       38.96       3,384,996
                                                   -----------

   Granted.......................       57.90         533,750
   Exercised.....................       29.28        (555,952)
   Canceled......................       44.15         (25,107)
                                                   -----------

Outstanding, December 31, 2001...       43.56       3,337,687
                                                   -----------

   Granted.......................       63.86         818,000
   Exercised.....................       34.46        (516,828)
   Canceled......................       49.32         (51,300)
                                                   -----------

Outstanding, December 31, 2002...       49.42       3,587,559
                                                   ===========

    The exercise price of the options granted in 2000, 2001 and 2002 was equal
to the market value of the stock on the date of grant. The options are
exercisable between one and ten years after the date of grant. At December 31,
2002, 10,052,621 shares were available for future grant under the stock option
plan.

    Information about restricted stock granted during 2002, 2001 and 2000 is as
follows:

                               Year Ended December 31,
                        --------------------------------------
                           2002         2001          2000
                        -----------   ----------   -----------
Shares granted........      95,638       58,180        78,598

Weighted average grant
   date fair market
   value..............  $    64.33    $   57.93    $    42.57

    For purposes of determining the pro forma net income disclosure in Note 2,
as if compensation expense were determined using the fair value method described
in SFAS No. 123, the fair value of these options was estimated at grant date
using the Black-Scholes option pricing model with the following weighted average
assumptions for each year:

                         Grants Issued in Year Ended December 31,
                          -------------------------------------
                             2002         2001         2000
                          -----------  -----------  -----------
Risk free interest rate     4.51%        5.10%        6.75%
Expected life..........   5.0 years    5.0 years    6.8 years
Expected volatility....     41.96%       39.64%       33.62%
Expected dividend yield     0.24%        0.16%        0.15%
Fair value of each          $27.15       $24.43       $21.96
option.................

    The following is a summary of stock options outstanding at December 31,
2002:

                                  -------------
                                   thirty-one
                                  -------------


<PAGE>

--------------------------------------------------------------------------------

                                     
                    Options Outstanding       Options Exercisable
                ----------------------------- -------------------
                         Remaining   Weighted           Weighted
                          Average    Average            Average
Exercise                  Life       Exercise           Exercise
Price Range      Shares    (yrs.)     Price    Shares    Price
--------------- --------- ---------  -------- --------- ---------
$9.63-$20.88      67,600   1.1       $15.69     67,600  $ 15.69

$26.69-$47.31   2,073,609  5.8        41.86   1,263,809   39.77

$53.70-$68.63   1,446,350  8.4        61.83    208,150    61.32
                ---------                     ---------

Total           3,587,559  6.8        49.42   1,539,559   41.62
                =========                     =========

    At December 31, 2001 and 2000, option shares of 1,486,768 and 1,229,038 were
exercisable at an average exercise price of $37.55 and $31.93, respectively. The
Company also granted an immaterial amount of equity instruments other than
options and restricted stock during 2000, 2001 and 2002.

    Under terms of the Company's Shareholder Rights Agreement each outstanding
share of the Company's Common Stock is accompanied by one Right. The
"Distribution Date" occurs ten days after an announcement that a person has
become the beneficial owner (as defined in the Agreement) of the Designated
Percentage of the Company's Common Stock (the date on which such an acquisition
occurs is the "Shares Acquisition Date" and a person who makes such an
acquisition is an "Acquiring Person"), or ten business days after a person
announces or begins a tender offer in which consummation of such offer would
result in ownership by a person of 15 percent or more of the Common Stock. The
Designated Percentage is 15% or more, except that for certain investment
advisers and investment companies advised by such advisers, the Designated
Percentage is 17.5% or more if certain conditions are met. The Rights are not
exercisable until the Distribution Date. Each Right will initially entitle
shareholders to buy one-half of one share of the Company's Common Stock at a
Purchase Price of $225 per full share (equivalent to $112.50 for each one-half
share), subject to adjustment. If there is an Acquiring Person, then each Right
(subject to certain limitations) will entitle its holder to purchase, at the
Rights' then-current Purchase Price, a number of shares of Common Stock of the
Company (or if after the Shares Acquisition Date, the Company is acquired in a
business combination, common shares of the acquiror) having a market value at
the time equal to twice the Purchase Price. The Rights will expire on July 22,
2009, subject to extension. The Rights are redeemable at a price of $0.001 per
Right at any time prior to the time a person becomes an Acquiring Person. Other
than certain amendments, the Board of Directors may amend the Rights in any
respect without the consent of the holders of the Rights.

12.  Leases

    The Company leases certain office space as well as data processing equipment
and autos under operating leases that expire during the next seven years.
Generally, all rental payments are fixed.

    Total rental expense under operating leases was $7.4 million, $6.7 million
and $5.3 million in 2002, 2001 and 2000, respectively.

    At December 31, 2002, minimum future operating lease payments are as follows
(in thousands of dollars):

2003                             $     6,234
2004                                   4,953
2005                                   2,724
2006                                     940
2007                                     570
2008 and thereafter............           40
                                 -------------

   Total.......................  $    15,461
                                 =============

13.  Contingencies and litigation settlement

     The Company is involved in litigation in the ordinary course of business.
In the opinion of management, the ultimate resolution of this pending litigation
will not have a material adverse effect on the financial position or results of
operations of the Company.

     In addition, in June 2001, the Federal District Court for the Southern
District of Georgia, before which Downey et. al. v. MGIC was pending, issued a
final order approving a settlement agreement and certified a nationwide class of
borrowers. In the fourth quarter of 2000, the Company recorded a $23.2 million
charge to cover the estimated costs of the settlement, including payments to
borrowers. Due to appeals by certain class members and members of classes in two
related cases, payments to borrowers in the settlement are delayed pending the
outcome of the appeals. The settlement 

                                  -------------
                                   thirty-two
                                  -------------


<PAGE>


                       ----------------------------------
                                Notes (continued)
                       ----------------------------------

includes an injunction that prohibits certain practices and specifies the basis
on which agency pool insurance, captive mortgage reinsurance, contract
underwriting and other products may be provided in compliance with the Real
Estate Settlement Procedures Act. There can be no assurance that the standards
established by the injunction will be determinative of compliance with the Real
Estate Settlement Procedures Act were additional litigation to be brought in the
future.

     The complaint in the case alleges that MGIC violated the Real Estate
Settlement Procedures Act by providing agency pool insurance, captive mortgage
reinsurance, contract underwriting and other products that were not properly
priced, in return for the referral of mortgage insurance. The complaint seeks
damages of three times the amount of the mortgage insurance premiums that have
been paid and that will be paid at the time of judgment for the mortgage
insurance found to be involved in a violation of the Real Estate Settlement
Procedures Act. The complaint also seeks injunctive relief, including
prohibiting MGIC from receiving future premium payments. If the settlement is
not fully implemented, the litigation will continue. In these circumstances,
there can be no assurance that the ultimate outcome of the litigation will not
materially affect the Company's financial position or results of operations.


                                  -------------
                                  thirty-three
                                  -------------


<PAGE>

--------------------------------------------------------------------------------
 
                       Report of Independent Accountants
--------------------------------------------------------------------------------


To the Board of Directors & Shareholders of 
MGIC Investment Corporation

     In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of MGIC
Investment Corporation and Subsidiaries (the "Company") at December 31, 2002 and
2001, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion. 

PricewaterhouseCoopers LLP

Milwaukee, Wisconsin January 8, 2003

                                  -------------

                                   thirty-four
                                  -------------


<PAGE>

--------------------------------------------------------------------------------
                       Unaudited quarterly financial data
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                                              Quarter                                     
                                                   ---------------------------------------------------------------        2002
                       2002                           First            Second           Third           Fourth            Year
------------------------------------------------   -------------    -------------    -------------   -------------    -------------
                                                                  (In thousands of dollars, except per share data)
<S>                                                <C>              <C>              <C>             <C>              <C>         
Net premiums written.............................  $    283,097     $    286,615     $    301,361    $    306,882     $  1,177,955
Net premiums earned..............................       284,449          288,169          298,953         310,527        1,182,098
Investment income, net of expenses...............        51,950           51,654           51,036          52,876          207,516
Losses incurred, net.............................        59,714           64,416          101,094         140,528          365,752
Underwriting and other expenses, net.............        64,468           63,049           64,646          73,470          265,633
Net income.......................................       169,187          170,936          151,570         137,498          629,191
Earnings per share (a):
   Basic.........................................          1.59             1.63             1.47            1.37             6.07
   Diluted.......................................          1.58             1.61             1.47            1.37             6.04

                                                                              Quarter                                     
                                                   ---------------------------------------------------------------        2001
                       2001                           First            Second           Third           Fourth            Year
------------------------------------------------   -------------    -------------    -------------   -------------    -------------
                                                                  (In thousands of dollars, except per share data)

Net premiums written.............................  $    229,588     $    256,903     $    271,006    $    278,856     $  1,036,353
Net premiums earned..............................       241,182          257,372          264,780         278,933        1,042,267
Investment income, net of expenses...............        50,045           51,566           51,021          51,761          204,393
Losses incurred, net.............................        29,377           36,304           43,468          51,665          160,814
Underwriting and other expenses, net.............        51,654           58,524           58,317          65,999          234,494
Net income.......................................       157,924          161,218          158,992         161,003          639,137
Earnings per share (a):
   Basic.........................................          1.48             1.51             1.48            1.51             5.98
   Diluted.......................................          1.46             1.49             1.47            1.50             5.93
</TABLE>


(a)  Due to the use of weighted average shares outstanding when calculating
     earnings per share, the sum of the quarterly per share data may not equal
     the per share data for the year.


                                  -------------
                                   thirty-five
                                  -------------


<PAGE>

    -----------------------------------------------------------------------
                             Shareholder Information
    -----------------------------------------------------------------------



<PAGE>



The Annual Meeting
------------------
The Annual Meeting of Shareholders of MGIC Investment Corporation will convene
at 9 a.m. Central Time on May 8, 2003 at the Marcus Center for the Performing
Arts, 929 North Water Street, Milwaukee, Wisconsin.

10-K Report
-----------
Copies of the Annual Report on Form 10-K, filed with the Securities and Exchange
Commission, will be available without charge after March 31, 2003, to
shareholders on request from:
        Secretary
        MGIC Investment Corporation
        P. O. Box 488
        Milwaukee, WI 53201

Transfer Agent and Registrar
----------------------------
        Wells Fargo Bank Minnesota, N.A.
        Shareowner Services
        P. O. Box 64854 St. Paul, Minnesota 55164
        (800) 468-9716

Corporate Headquarters
----------------------
        MGIC Plaza
        250 East Kilbourn Avenue
        Milwaukee, Wisconsin 53202

Mailing Address
        P. O. Box 488
        Milwaukee, Wisconsin 53201

Shareholder Services
        (414) 347-6596

MGIC Stock
----------
MGIC Investment Corporation Common Stock is listed on the New York Stock
Exchange under the symbol MTG. At December 31, 2002, 100,251,444 shares were
outstanding. The following table sets forth for 2001 and 2002 by quarter the
high and low sales prices of the Common Stock on the New York Stock Exchange
Composite Tape.

                      2001                      2002
            -------------------------  ------------------------
Quarters       High         Low           High         Low

1st         $    69.36  $    51.00     $   71.85   $    59.03
2nd              77.31       61.00         74.40        65.40
3rd              76.50       54.00         68.95        38.60
4th              66.20       50.56         48.52        33.60

In 2001 and 2002 the Company declared and paid the following cash dividends:

                  2001                2002
            -----------------   ------------------
Quarters
1st           $    .025            $    .025
2nd                .025                 .025
3rd                .025                 .025
4th                .025                 .025
              -------------        ------------
              $    .100            $    .100
              =============        ============

The Company is a holding company and the payment of dividends from its insurance
subsidiaries is restricted by insurance regulation. For a discussion of these
restrictions, see the sixth paragraph under "Management's Discussion and
Analysis -- Liquidity and Capital Resources" and Note 11 of the Notes to the
Consolidated Financial Statements.

As of March 12, 2003, the number of shareholders of record was 207. In addition,
there were approximately 139,000 beneficial owners of shares held by brokers and
fiduciaries.


                                  -------------
                                   thirty-six
                                  -------------


                                                                      EXHIBIT 21

                           MGIC INVESTMENT CORPORATION

               DIRECT AND INDIRECT SUBSIDIARIES AND JOINT VENTURES
                        OF MGIC INVESTMENT CORPORATION(1)


                     1.  MGIC Assurance Corporation

                     2.  MGIC Credit Assurance Corporation

                     3.  MGIC Indemnity Corporation

                     4.  MGIC Insurance Services Corporation

                     5.  MGIC Investor Services Corporation

                     6.  MGIC Mortgage Insurance Corporation

                     7.  MGIC Mortgage Marketing Corporation

                     8.  MGIC Mortgage and Consumer Asset I LLC

                     9.  MGIC Mortgage and Consumer Asset II LLC

                    10.  MGIC Mortgage Reinsurance Corporation

                    11.  MGIC Mortgage Securities Corporation

                    12.  MGIC Reinsurance Corporation

                    13.  MGIC Reinsurance Corporation of Vermont

                    14.  MGIC Reinsurance Corporation of Wisconsin

                    15.  MGIC Residential Reinsurance Corporation

                    16.  Mortgage Guaranty Insurance Corporation

                    17.  eMagic.com LLC

                    18.  Credit-Based Asset Servicing and Securitization LLC(2)

                    19.  Sherman Financial Group LLC(2)

The names of certain persons that would not in the aggregate be a significant
subsidiary are omitted.



--------

(1)  Except as otherwise noted in Footnote 2, all companies listed are 100%
     directly or indirectly owned by the registrant and all are incorporated in
     Wisconsin.
(2)  Less than 50% owned and organized under Delaware law.




                                                                      EXHIBIT 23


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the Registration
Statements listed below of MGIC Investment Corporation of our report dated
January 8, 2003 relating to the consolidated financial statements, which appears
in the 2002 Annual Report to Shareholders, which is incorporated by reference in
this Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report dated January 8, 2003 relating to the financial
statement schedules, which appears in this Form 10-K.

     1.   Registration Statement on Form S-8 (Registration No. 33-79338)

     2.   Registration Statement on Form S-8 (Registration No. 33-79340)

     3.   Registration Statement on Form S-8 (Registration No. 33-92128)

     4.   Registration Statement on Form S-8 (Registration No. 333-56350)

     5.   Registration Statement on Form S-8 (Registration No. 333-56346)

     6.   Registration Statement on Form S-8 (Registration No. 333-101621)


/s/ PRICEWATERHOUSECOOPERS LLP

PRICEWATERHOUSECOOPERS LLP


Milwaukee, Wisconsin
March 28, 2003




                                                                    Exhibit 99.1


                        CERTIFICATION OF PERIODIC REPORT
                        --------------------------------



I, Curt S. Culver, Chief Executive Officer of MGIC Investment Corporation (the
"Company"), certify, pursuant to Sections of the Surbanes-Oxley Act of 2002, 18
U.S. C. Section 1350 (the "Act"), that:

(1)  the Annual Report on Form 10-K of the Company for the year ended December
     31, 2002 (the "Report") fully complies with the requirements of Section
     13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
     78o(d)); and

(2)  the information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Company.

To the extent the Act permits the foregoing certification to be made to a
standard that depends on my knowledge, such certification is made only to that
standard.


Date: March 26, 2003






                                                \s\ Curt S. Culver
                                               ---------------------------------
                                               Curt S. Culver
                                               Chief Executive Officer




A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to MGIC Investment Corporation and
will be retained by MGIC Investment Corporation and furnished to the Securities
and Exchange Commission or its staff upon request.




                                                                    Exhibit 99.2

                        CERTIFICATION OF PERIODIC REPORT
                        --------------------------------



I, J. Michael Lauer, Chief Financial Officer of MGIC Investment Corporation (the
"Company"), certify, pursuant to Section 906 of the Surbanes-Oxley Act of 2002,
18 U.S. C. Section 1350 (the "Act"), that:

(1)  the Annual Report on Form 10-K of the Company for the year ended December
     31, 2002 (the "Report") fully complies with the requirements of Section
     13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
     78o(d)); and

(2)  the information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Company.

To the extent the Act permits the foregoing certification to be made to a
standard that depends on my knowledge, such certification is made only to that
standard.


Date:     March 26, 2003




                                                                      
                                                      \s\ J. Michael Lauer
                                                     ---------------------------
                                                     J. Michael Lauer
                                                     Chief Financial Officer




A signed original of this written statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to MGIC Investment Corporation and
will be retained by MGIC Investment Corporation and furnished to the Securities
and Exchange Commission or its staff upon request.