Menu

Reinsurance News

Essent secures $496mn of mortgage reinsurance from capital markets

31st January 2020 - Author: Matt Sheehan

Bermuda domiciled mortgage insurer Essent Group Ltd. has announced that its subsidiary, Essent Guaranty, Inc., has secured a further $495.9 million of fully collateralised excess of loss reinsurance coverage from the capital markets.

mortgage riskThe coverage was obtained through Radnor Re 2020-1 Ltd, a newly formed Bermuda special purpose insurer, and relates to mortgage insurance policies written by Essent in January through August 2019.

This transaction marks the fourth time Essent has tapped the capital markets for mortgage reinsurance and the first time in 2020.

It previously obtained $424.4 million of coverage in March 2018 via Radnor Re 2018-1, and then returned twice in 2019 to secure first $473.2 million of coverage in March, and then $333.8 million in June.

For mortgage insurers like Essent, the capital markets and the catastrophe bond structure is now providing an effective way to source efficiently priced reinsurance protection for their mortgage insurance portfolios.

This capital is being used to help the companies grow their mortgage insurance books, while protecting the balance-sheet and ensuring potential significant mortgage delinquency or default events are effectively hedged.

Essent explained that Radnor Re 2020-1 funded its reinsurance obligations through the issuance of six classes of mortgage insurance-linked notes, with 10-year legal maturities, to eligible third party capital markets investors in an unregistered private offering.

Further details of the transaction can be found in the Deal Directory of our ILS-focused sister publication, Artemis.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Philippines to consider mandatory disaster insurance for properties

The Insurance Commission (IC) of the Philippines is reportedly in talks with private sector re/insurers regarding the introduction of mandatory...

Close