Update: May 30, 2021 at 11:12 a.m.
Bermuda’s market share in US mortgage insurer reinsurance has grown (Chart by Bill Zuill)
Bermuda-based insurance companies are helping more Americans homeownership by providing the market with innovative mortgage solutions, the island’s re / insurance industry group said today.
The Bermuda Association of Insurers and Reinsurers said a new analysis from the organization shows that more than half of US mortgage reinsurance is supported by the Bermuda reinsurance market.
Abir said the island’s reinsurance companies have provided increased capacity to US monoline private mortgage insurers in recent years, increasing their share of reinsurance support from just under 30% in 2016 to over 50. % in 2020.
The organization said the data underscores the growing demand for various sources of global capital to support the U.S. housing market, while reducing risks for U.S. taxpayers.
Marc Grandisson, CEO of Arch Capital Group and Chairman of Abir, said: “The Bermuda re / insurance market has long been known to provide Americans with peace of mind against the risks of natural disasters, particularly the risks of natural disasters. hurricanes, tornadoes and floods.
“Now the data shows the Bermuda market is playing an increasingly important role in helping Americans realize the dream of homeownership.”
Abir said he analyzed data from the United States National Association of Insurance Commissioners regarding ceded US monoline mortgage collateral premiums, and noted a growth trend related to Bermuda’s market share in reinsurance of ceded. monoline US mortgage insurers.
From 29.5% in 2016, the market share increased to 30.1% in 2017, 33.7% in 2018, 43.8% in 2019 and 50.3% in 2020.
Mr. Grandisson said, “Mortgage insurance plays a vital role in enabling many Americans to access homeownership.
“This eases the burden of down payments and helps speed up the purchase of a property. Without it, many citizens would have to wait years to save to buy their own home.
Abir said Bermuda-based reinsurers are helping to strengthen the financial strength of private mortgage insurers, thereby supporting the flow of affordable credit to U.S. households.
The Bermuda market also plays an important role in directly supporting government-sponsored entities Fannie Mae and Freddie Mac and the credit risk transfer market, the organization said.
Created to improve credit flows to the U.S. housing sector, the two companies have adapted their business models in recent years, from buying and holding credit risks to syndication of risk to reinsurers and suppliers. well-capitalized and diversified capital markets.
Abir said its membership has grown over the past decade, providing significant capital to support GSE CRT programs, as well as the recovery and transformation of the US real estate market in general.
He said Bermuda’s reinsurers now support the US real estate market in a variety of ways, regularly participating in traditional reinsurance arrangements, credit risk transfer transactions and mortgage insurance related note transactions.
With their strong capital positions, diversified lines of business and deep expertise in US mortgage credit risk, Bermuda’s reinsurers are well positioned to provide capital and expertise to help develop sustainable ownership. housing, said Abir.
He said global broker Aon estimates the CRT of GSEs in the Bermuda reinsurance market to be around 60% in 2020, further protecting U.S. taxpayers.
Abir said homeownership is particularly important for minority communities, creating a foundation for generational wealth creation, as well as family and financial security.
Real estate is often a first investment – and a way to start closing the wealth gap, he said.
John Huff, CEO of Abir, said: “The post-pandemic economy, coupled with a growing global focus on facilitating equitable opportunities in all communities, could amplify the role that reinsurance capital plays in making the world more effective. home ownership possible.
“The Bermuda market is pleased to be a part of the process to help Americans of all walks of life benefit from homeownership.”
Marc Grandisson, President of Abir (Photo provided)
John Huff, Managing Director of Abir (photograph provided)