
Gallagher Re, the global reinsurance broker, is pleased to have partnered with Arch Mortgage Insurance Company (Arch MI) once again in raising and placing traditional reinsurance capacity for Bellemeade Re 2020-4 Ltd., a special purpose reinsurer.
In the fourth and final Bellemeade transaction of 2020, Gallagher Re obtained $15,620,000 of indemnity reinsurance for Arch MI, on a pool representing approximately $33.3 billion of mortgages linked to loans issued by Arch MI and affiliates, primarily in the second half of 2019 – the same portfolio of MI policies as Bellemeade Re 2020-1 Ltd.
This builds on the three previous transactions of 2020, through which Arch MI and Gallagher Re’s specialist mortgage indemnity team developed an effective and growing partnership, bringing a total of $140m traditional reinsurance capacity to the table.
“We are extremely pleased to have once again represented Arch MI in raising the required direct reinsurance capacity for its Bellemeade program, bringing a total of over $140m traditional reinsurance capacity to these transactions over the past six months,” said Freddie Scarratt, Account Executive at Gallagher Re, who managed and placed the reinsurance capacity of the transaction.
“In what has undoubtedly been a testing environment, collaborative partnership has never been more important. Reinsurers continue to demonstrate their preparedness to back new mortgage indemnity transactions when presented with risk transfer experience and expertise in this highly specialist field.”
Danny Mamo, Senior Vice President of Structured Capital and Reinsurance at Arch MI, said: “Our goal in 2020 was to explore the appetite of the traditional reinsurance market for simultaneous side-by-side participation in the Bellemeade Re program with the Capital Markets. We knew the simultaneous execution would be a novelty in the market and despite the challenges brought on by the COVID-19 pandemic, we were able to attract consistent participation from multiple reinsurers on all Bellemeade Re transactions completed in 2020. We have found yet another innovative structure to expand our relationship with the reinsurance market.”
Steve Rance, Managing Partner of Mortgage Indemnity Reinsurance at Gallagher Re, added: “The growing relationship between Arch MI and reinsurers reinforces the importance and effectiveness of traditional reinsurance as a capital source for mortgage insurance business, both in the US and further afield. And to have raised in excess of the required reinsurance capacity – over multiple large-scale transactions and during a year when COVID-19 has created such extensive economic uncertainty – is a fantastic result.”
Last July, Bellemeade Re 2020-1 Ltd. became the first mortgage indemnity insurance-linked note (ILN) transaction since the onset of COVID-19 – and the first to incorporate traditional reinsurance capacity.
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