The Global Mortgage Group of Arch Capital Group Ltd. has entered into a share purchase agreement with the Westpac Group to acquire Westpac Lenders Mortgage Insurance Limited (WLMI).
WLMI is an Australian Prudential Regulation Authority (APRA) authorized captive lenders mortgage insurance (LMI) provider to Westpac.
The business had shareholders’ equity of $AUD 285.7 million as of Sept. 30, 2020.
As part of the agreement, WLMI will retain its existing risk in force and become Westpac’s exclusive provider of LMI on new mortgage originations for a period of 10 years.
Upon completion of the transaction, Arch intends to combine the operations of WLMI and its existing Australian LMI company, Arch LMI Pty Ltd.
Arch has been active in the Australian LMI market since 2011, when it began providing support for WLMI’s reinsurance treaties. In 2019, Arch LMI Pty Ltd was authorized as a lenders mortgage insurer by APRA.
“Australia has been and continues to be an important market for our mortgage insurance business. This acquisition reinforces our commitment to both the market and our clients and enhances Arch’s position as a leading provider of LMI in Australia,” said David Gansberg, CEO, Global Mortgage for Arch Capital Group Ltd.
“We look forward to continuing our long-standing partnership with Westpac by being their exclusive provider of LMI and will remain focused on providing innovative solutions and excellent service to clients across Australia.”
The transaction is expected to close later this year pending antitrust and regulatory approvals from APRA and from the Australian Competition and Consumer Commission.