Articles related to insurance & reinsurance support US home insurance: Moody’s – Artemis.bm

Mortgage insurance companies in the United States are in the best financial position right now because of their heavy use of insurance, including their issuance of mortgage-linked securities (ILS), or mortgage-linked notes (ILN), Moody’s Investors Service has concluded. he said.

The rating agency has raised many US insurers and affirmed the ratings of others, with a significant increase in insurance risk to support the group’s transparency for the main reason, it seems.

The overall profile of mortgage insurance has been slow since the rise of the crime-related epidemic, Moody’s wrote.

But, while the economic factors have helped drive the strong economy for these carriers, the reinsurance they use has helped boost them.

“The increased use of heavy loss insurance through insurance related letters (ILNs) and the traditional insurance market is also strengthening the US home insurance portfolio,” Moody’s said.

In fact, Moody’s reported that the sector has about $14.3 billion of current reinsurance limits available.

This insurance capital “reduces the liquidity and financial volatility that has plagued the home insurance industry during the financial crisis,” the agency said.

Commenting on the largest US mortgage insurer, Moody’s also noted its strong and strong capital markets.

Starting with Arch Capital, whose ratings were affirmed, Moody’s points to its “market leadership in US mortgage insurance” in its Arch Mortgage portfolio, saying it “uses its underwriting and risk management capabilities to create a flexible approach to credit risk.” house. market.”

Moody’s added that this is driven by “higher use of insurance to reduce the volatility of risk exposures.”

Explaining how Arch has supported sources of financing in the markets, including traditional, Moody’s said, “Since July 2015, Arch Mortgage has transferred more than $8.7 billion of risk in the capital markets through 18 Bellemeade Re insurance-linked notes (ILN), and has also additional risk transfer protection through excess loss and share in the traditional insurance market. Through these arrangements, Arch Mortgage also has insurance coverage covering nearly all of its business written between January 2017 and December 2021, providing more than $4.6 billion in losses in recouping lost income during periods of high mortgage rates.As of March 31, 2022, Arch Mortgage reported a PMIER ratio of 205%, the highest among its peers.

You can view details of all of Arch’s mortgage ILS deals in the Artemis Deal Directory.

Next, National Mortgage Insurance Corporation (NMIC), whose ratings were upgraded and Moody’s said, “It has transferred approximately $2.1 billion of risk to the capital markets through 7 Oaktown Re ILN transactions, and has also obtained additional risk protection due to losses and large losses. quota-share coverage in the traditional reinsurance market. Through this arrangement, NMIC has reinsurance coverage covering almost all of its businesses underwritten between January 2017 and March 2022, providing approximately $1.6 billion of loss-of-life funds to cover losses incurred during the loan period. house.

You can see details of all NMIC’s real estate ILS deals in the Artemis Deal Directory.

Next Enact Mortgage Insurance and its subsidiary Genworth, whose ratings were also raised, and as Moody explained, “Since Q4 2019, Enact has transferred approximately $1.8 billion of risk to the capital markets through the 5 Triangle Re ILN channels, and has also obtained additional risk transfer protection through in excess loss and share in the traditional insurance market. Through this arrangement, Enact also has insurance coverage covering nearly all of its business written between January 2018 and Q2 2021, providing approximately $1.1 billion in current coverage to absorb losses during credit losses. .”

You can view details of all Enact / Genworth’s mortgage ILS deals in the Artemis Deal Directory.

Radian Group also received a promotion and in this company Moody said, “Since November 2018, Radian has transferred approximately $3 billion of risk to the capital markets through 6 Eagle Re ILN channels, and has also obtained additional risk protection for losses and large losses. quota-share coverage in the traditional reinsurance market .Through this arrangement, Radian also has insurance that covers nearly all of its businesses underwritten between January 2017 and mid-2021, providing more than $2.2 billion in losses in reimbursing losses during mortgage defaults.”

You can view details of all Radian Group’s ILS deals in the Artemis Deal Directory.

MGIC Investment Corporation and its subsidiary Mortgage Guaranty Insurance Corporation (MGIC) were also upgraded, with Moody’s saying, “Since Q4 2018, MGIC has transferred approximately $2.3 billion of risk to the capital markets through 6 Home Re ILN transactions, and has also acquired additional risk transfer protection.” through excess loss and market share in the traditional insurance market. Through these arrangements, MGIC also has insurance coverage covering nearly all of its business written between Q3 2016 and Q4 2021, providing more than $1.9 billion of current insurance to absorb losses during the mortgage loans.

You can view details of all of MGIC’s ILS deals in the Artemis Deal Directory.

The last mortgage insurer in the US is Essent Guaranty, whose rating was affirmed by Moody’s, where the investment agency said, “Since March 2018, Essent has transferred approximately $3.1 billion of risk to the capital markets through 7 Radnor Re ILN transactions, and has also acquired additional risk transfer protection through excess loss and share sharing in today’s reinsurance market. Through these arrangements, Essent also has insurance coverage covering nearly all of its business underwritten between January 2015 and Q3 2021, providing approximately $2.6 billion in excess loss coverage. to cover the costs incurred during the mortgage loan.

You can view details of all of Essent Guaranty’s mortgage ILS deals in the Artemis Deal Directory.

There is a common theme here, which is that the rating agency sees capital markets and investment financing as the best for home insurance giants.

The release of ILS mortgages in 2022 is now down due to the growing financial market, namely the rise in interest rates and the impact on mortgages in this economic period.

But by having a large amount of money to buy loans, these carriers have protected their books by using possible funds, which helps them to continue to profit, even when the credit market can be very difficult.

In our chart, below which the interactive version is available, you can see how much ILS loans have fallen so far in 2022.

Currently the ILS lending market is in a tailspin, as these carriers determine how the current financial situation will affect their businesses moving forward and what is the best way to spend money and improve their PMIERs.

We are aware of vehicles that have been registered earlier in the year but have not yet been used for ILS mortgages, which suggests that there may be more activity, perhaps at the end of the year, if future expectations for prices decrease.

You can read about every security related to home insurance (ILS) offered in the Artemis Deal Directory.

———————————————————————————
Artemis London 2022 - Insurance related conference in LondonTickets are selling fast for Artemis London 2022, our first ILS conference in London. September 6, 2022.

Register soon to ensure you can attend.

Secure your spot at the event here!
——————————————

Print Better, PDF & Email