Arch Mortgage Insurance (Arch MI), a provider of private insurance covering mortgage credit risk, has secured over $341m of indemnity reinsurance from insurance-linked security (ILS) transaction.
Arch MI obtained $341,790,000 of indemnity reinsurance on a pool representing about $23bn of mortgages from Bellemeade Re 2019-1, a special purpose reinsurer.
The ILS deal offers Arch MI with a collateralized coverage against potential losses on a portion of its mortgage insurance (MI) portfolio.
The reinsurance is for a portfolio of the company’s policies issued from 2015. More than 70% of the policies covered in the transaction were issued before 2009.
Arch MI said it is the company’s first 2019 ILS transaction in what has become a programmatic issuance after undertaking three Bellemeade transactions garnering $1.534bn of reinsurance protection for loans representing over $136bn of unpaid principal balance in 2018.
About half the covered mortgages have been changed under GSE or servicer modification programs in the transaction.
Bellemeade Re 2019-1 is funding its reinsurance obligations by issuing four classes of amortizing notes with 10-year legal final maturities.
Arch Capital Group (U.S.) alternative markets executive vice president Jim Bennison said: “This subject portfolio is unique in that it contains policies covering loans originated during the crisis, some of which have been modified. Those policies, plus the pre- and post-crisis collateral in the pool, resulted in a transaction that was very appealing to investors and demonstrates Arch’s continued efforts to creatively manage capital and risk positions in our mortgage business.”
Earlier this month, the company appointed Andrew Rippert as the chief innovation and strategic investment officer and will report to Arch Capital Group (ACGL) president and CEO Marc Grandisson.
Rippert joined the company in 2010 and recently served as ACGL Global Mortgage Group’s CEO.
In the present role, he will be responsible for pursuing new business models and is expected to develop a pipeline of new products, services and untapped markets to deliver future revenue streams across all business lines.
Rippert will continue to represent Arch in various government and trade associations.