AIG Secures Approximately $300 Million of Indemnity Reinsurance Coverage for Mortgage Insurance Risks
August 06 2015 - 8:00AM
Business Wire
Transaction Expands Use of Insurance Linked Securities (ILS)
to Mortgage Insurance Business
American International Group, Inc. (NYSE:AIG) today announced
that its mortgage insurance business United Guaranty Corporation
(UGC) obtained $298.9 million of indemnity reinsurance from
Bellemeade Re Ltd., a Bermuda-domiciled special purpose insurer,
for a portfolio of mortgage insurance (MI) policies issued from
2009 through the first quarter of 2013.
Bellemeade Re is funding its reinsurance obligations through the
issuance to investors of three classes of 10 year notes. This
insurance-linked securities (ILS) transaction closed July 29, 2015
and provides UGC with fully collateralized coverage from Bellemeade
Re for potential losses on its MI portfolio.
AIG is one of the largest buyers of reinsurance protection
backed by the capital markets through insurance-linked securities.
Over the last several years, AIG has used the ILS market to
successfully transfer over $3 billion of risk to the capital
markets from its property portfolio through natural catastrophe
bonds, or CAT bonds. The Bellemeade Re transaction expands the
scope of risk AIG has brought to investors to include mortgage
insurance.
“I am very pleased to see the overwhelming support investors
have shown to this transaction and in general to our strategy to
expand the ILS market,” said Peter Hancock, President and Chief
Executive Officer of AIG. “A robust ILS market allows AIG to have a
more flexible and efficient capital structure for the benefit of
our customers and shareholders.”
United Guaranty President and CEO Donna DeMaio added, “United
Guaranty’s financial strength and depth of knowledge have enabled
us to successfully tap the capital markets for risk transfer, a
differentiator for us in the mortgage insurance space. This makes
the MI industry financially stronger, while demonstrating the
advanced financial capabilities that make United Guaranty uniquely
qualified to be an important partner to mortgage lenders.”
Certain statements in this press release constitute
forward-looking statements. These statements are not historical
facts but instead represent only AIG’s belief regarding future
events, many of which, by their nature, are inherently uncertain
and outside AIG’s control. It is possible that actual results will
differ, possibly materially, from the anticipated results indicated
in these statements. Factors that could cause actual results to
differ, possibly materially, from those in the forward-looking
statements are discussed throughout AIG’s periodic filings with the
SEC pursuant to the Securities Exchange Act of 1934.
American International Group, Inc. (AIG) is a leading global
insurance organization serving customers in more than 100 countries
and jurisdictions. AIG companies serve commercial, institutional,
and individual customers through one of the most extensive
worldwide property-casualty networks of any insurer. In addition,
AIG companies are leading providers of life insurance and
retirement services in the United States. 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 |
YouTube: www.youtube.com/aig | Twitter: @AIGinsurance | LinkedIn:
http://www.linkedin.com/company/aig
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20150806005703/en/
AIGMedia:Matt Gallagher,
212-458-3247matthew.gallagher2@aig.comorInvestors:Liz Werner,
212-770-7074elizabeth.werner@aig.com
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