Arch Capital Group’s US mortgage insurance subsidiary, Arch Mortgage Insurance Company, has secured $577 million of indemnity mortgage reinsurance protection.
This transaction, which covers a pool representing $7.2 billion of mortgages from special purpose reinsurer Bellemeade Re 2019-4 Ltd.,is Arch’s fourth of 2019; representing the most Insurance Linked-Note transactions ever conducted in a single year by a mortgage insurer.
The deal is structured in a similar way to a catastrophe bond transaction, with the insurance-linked note transaction providing Arch MI with collateralised reinsurance protection for potential losses on a portion of its mortgage insurance portfolio.
The deal covers a portfolio of MI policies linked to 113,180 loans issued by Arch MI and affiliates in 2019.
In total, Arch has issued 10 Bellemeade transactions, which have provided aggregate reinsurance coverage of over $4.7 billion.
“This transaction represents Arch’s continued commitment to actively managing the risk in our U.S. mortgage insurance business,” said Jim Bennison, EVP, Alternative Markets for Arch Capital Group (US).
“Our efforts are supported by a wide range of private market investors that are attracted to Arch’s best in class pricing, asset selection and servicing of our mortgage insurance portfolio.”
