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26 July 2019Alternative Risk Transfer

Arch secures $700m ILS reinsurance for mortgage risk with Bellemeade Re

Bermuda-based Arch Capital Group' US mortgage insurance operation Arch Mortgage Insurance Company (Arch MI) has confirmed a $700 million of indemnity reinsurance from special purpose reinsurer Bellemeade Re 2019-3 in an insurance-linked security (ILS) deal.

The transaction, which covers a pool representing nearly $49.6 billion of mortgages, is Arch’s third of 2019 and represents the largest individual insurance-linked note (ILN) ever conducted by a mortgage insurance company. In total, Arch has issued nine Bellemeade transactions, which have provided aggregate reinsurance coverage of over $4.1 billion.

The reinsurance is for a portfolio of MI policies linked to 219,994 loans issued by Arch MI and affiliates in 2016.

Bellemeade Re 2019-3 is funding its reinsurance obligations through the issuance of four classes of amortizing notes with 10-year legal final maturities.

“Since the inception of the Bellemeade ILN program, one of our goals has been to transfer a portion of the risk across the entire U.S. mortgage insurance portfolio, which we’ve now largely achieved,” said Jim Bennison, EVP, alternative markets for Arch Capital Group (US). “With over four 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.”

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More on this story

Alternative Risk Transfer
2 July 2020   The deal marks the first mortgage indemnity insurance-linked note transaction since the onset of COVID-19.
Insurance
18 March 2019   Arch Mortgage Insurance Company (Arch MI) has confirmed $341.7 million in indemnity reinsurance from special purpose reinsurer Bellemeade Re in an insurance-linked security (ILS) deal.
Alternative Risk Transfer
24 August 2018   Arch Capital Group’s US mortgage insurance operation Arch Mortgage Insurance Company has secured $653.3 million of indemnity reinsurance from Bellemeade Re 2018-2, a special purpose insurer.