AIG Secures Approximately $300 Million Of Indemnity Reinsurance Coverage for Mortgage Insurance Portfolio from 2008 and Earlier
May 09 2016 - 4:15PM
Business Wire
The transaction transfers risk to investors and is believed to
be the first of its kind involving policies from 2008 and prior
years
American International Group, Inc. (NYSE:AIG) today announced
that its mortgage insurance business United Guaranty Corporation
(UGC) obtained $298.6 million of indemnity reinsurance from
Bellemeade Re II Ltd., a special purpose insurer, for a portfolio
of mortgage insurance (MI) policies issued in 2008 and prior
years.
Bellemeade Re II is funding its reinsurance obligations through
the issuance of three classes of amortizing notes with 10-year
legal final maturities. This insurance-linked securities (ILS)
transaction provides United Guaranty with fully collateralized
coverage from Bellemeade Re II for potential losses on a portion of
its legacy MI portfolio.
United Guaranty President and CEO Donna DeMaio said, “We believe
this marks the first time a mortgage insurer has accessed the
capital markets for a risk transfer involving a mortgage insurance
portfolio made up of policies issued in 2008 and earlier years. The
transaction not only helps United Guaranty manage risk, but also
demonstrates that investors are willing to assign value to this
type of portfolio from the 2008 and earlier period.”
The reinsurance is on a portion of United Guaranty’s first-lien
U.S. mortgage insurance portfolio of policies issued in 2008 and
prior years. As of March 31, 2016, less than 20 percent of United
Guaranty’s gross risk in force was written in 2008 and prior
years.
In August 2015, American International Group, Inc. announced a
similar agreement in which United Guaranty obtained approximately
$300 million of indemnity reinsurance from Bellemeade Re Ltd., a
special purpose insurer, for a portfolio of MI policies from 2009
through the first quarter of 2013.
Forward Looking Statements
Certain statements in this press release constitute
forward-looking statements. These statements are not historical
facts but instead represent only United Guaranty’s belief regarding
future events, many of which, by their nature, are inherently
uncertain and outside of United Guaranty’s control. It is possible
that actual results will differ, possibly materially, from the
anticipated results indicated in these statements.
About United Guaranty1
United Guaranty and its subsidiaries provide innovative, quality
risk solutions that help mortgage lenders remain competitive while
generating a profitable and responsible book of business for their
stakeholders. Products include first-lien private mortgage
insurance—most notably Performance Premium®, an industry-leading
risk-based pricing option. Among United Guaranty's suite of loan
analysis and risk management tools are indices that measure loan
risk and geographic quality. United Guaranty was established in
Greensboro, North Carolina, in 1963 and is a company of American
International Group, Inc.
American International Group, Inc. (AIG) is a leading global
insurance organization. Founded in 1919, today we provide a wide
range of property casualty insurance, life insurance, retirement
products, mortgage insurance and other financial services to
customers in more than 100 countries and jurisdictions. Our diverse
offerings include products and services that help businesses and
individuals protect their assets, manage risks and provide for
retirement security. AIG common stock is listed on the New York
Stock Exchange and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com and
www.aig.com/strategyupdate | YouTube: www.youtube.com/aig |
Twitter: @AIGinsurance | LinkedIn:
http://www.linkedin.com/company/aig. These references with
additional information about AIG have been provided as a
convenience, and the information contained on such websites is not
incorporated by reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement, and general insurance operations of American
International Group, Inc. For additional information, please visit
our website at www.aig.com. All products and services are written
or provided by subsidiaries or affiliates of American International
Group, Inc. Products or services may not be available in all
countries, and coverage is subject to actual policy language.
Non-insurance products and services may be provided by independent
third parties. Certain property-casualty coverages may be provided
by a surplus lines insurer. Surplus lines insurers do not generally
participate in state guaranty funds, and insureds are therefore not
protected by such funds.
1United Guaranty is a marketing term for United Guaranty
Residential Insurance Company and United Guaranty Mortgage
Indemnity Company. United Guaranty and Performance Premium are
registered marks. Coverage is available through admitted company
only.
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version on businesswire.com: http://www.businesswire.com/news/home/20160509006556/en/
AIGMedia:Matt Gallagher,
212-458-3247matthew.gallagher2@aig.comorUGCJo Fleischer,
336-333-0433fleiscj@ugcorp.comorInvestors:Liz Werner,
212-770-7074elizabeth.werner@aig.com
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