The transaction transfers risk to investors and is believed to be the
first of its kind involving policies from 2008 and prior years
NEW YORK--(BUSINESS WIRE)--May 9, 2016--
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
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
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
| 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160509006556/en/
Source: American International Group, Inc.
Matt Gallagher, 212-458-3247