Arch Capital Group’s US mortgage insurance subsidiary, Arch Mortgage Insurance Company, has secured $700 million of indemnity mortgage reinsurance protection.
This transaction, which covers a pool representing $49.6 billion of mortgages from special purpose reinsurer Bellemeade Re 2019-3 Ltd., is Arch’s third of 2019 and the largest of its kind 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 219,994 loans issued by Arch MI and affiliates in 2016.
In total, Arch has issued nine Bellemeade transactions, which have provided aggregate reinsurance coverage of over $4.1 billion.
“Since the inception of the Bellemeade ILN program, one of our goals has been to transfer a portion of the risk across the entire U.S. mortgage insurance portfolio, which we’ve now largely achieved,” said Jim Bennison, EVP, Alternative Markets for Arch Capital Group US.
“With over four billion dollars of aggregate reinsurance protection on our portfolio, we believe we’re at the forefront of managing capital and risk in the mortgage insurance industry.”
You can read all about the new Bellemeade Re 2019-3 Ltd. mortgage ILS transaction from Arch, as well as every other mortgage insurance-linked notes transaction, in the Artemis Deal Directory.
