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Arch in record mortgage reinsurance issuance

Bermudian-based Arch Capital Group has tapped the capital markets for more than $700 million to bolster the reinsurance of its mortgage insurance business.

The group’s third insurance-linked note transaction of the year was the biggest issuance ever made by a mortgage insurance company, according to a statement from Arch.

Arch Mortgage Insurance, a US-based subsidiary of Arch, obtained $700.9 million of indemnity reinsurance on a pool representing $49.6 billion of mortgages through Bellemeade Re 2019-3 Ltd, a Bermudian special purpose insurer.

In total, Arch has issued nine Bellemeade transactions, which have provided aggregate reinsurance coverage of more than $4.1 billion.

Jim Bennison, executive vice-president, Alternative Markets for Arch Capital Group (US) Inc, said: “Since the inception of the Bellemeade ILN programme, one of our goals has been to transfer a portion of the risk across the entire US mortgage insurance portfolio, which we’ve now largely achieved.

“With over $4 billion dollars of aggregate reinsurance protection on our portfolio, we believe we’re at the forefront of managing capital and risk in the mortgage insurance industry.”

The latest issuance has four classes of amortising notes with ten-year legal final maturities.