{"id":2281,"date":"2025-09-11T11:29:58","date_gmt":"2025-09-11T11:29:58","guid":{"rendered":"http:\/\/www.xinetica.com\/?p=2281"},"modified":"2025-09-11T14:28:57","modified_gmt":"2025-09-11T14:28:57","slug":"us-private-mortgage-insurers-increase-use-of-reinsurance-am-best","status":"publish","type":"post","link":"http:\/\/www.xinetica.com\/index.php\/2025\/09\/11\/us-private-mortgage-insurers-increase-use-of-reinsurance-am-best\/","title":{"rendered":"US private mortgage insurers increase use of reinsurance: AM Best"},"content":{"rendered":"

According to AM Best, a credit rating agency and provider of financial data and analysis for the insurance industry, US private mortgage insurers continue to transfer a significant portion of their premiums to reinsurers, with the share going to unaffiliated reinsurers growing in recent years.<\/p>\n

\"am-best-logo\"In its latest Market Segment Report, Reinsurance Market for US Mortgage Credit Risk Matures, AM Best examines trends in the reinsurance sector as part of its broader coverage of the global insurance and reinsurance markets, published ahead of the Rendez-Vous de Septembre in Monte Carlo.<\/p>\n

The firm\u2019s recent reports also include rankings of top global reinsurance groups and in-depth analyses of the Lloyd\u2019s, life\/annuity, health, and regional reinsurance markets.<\/p>\n

AM Best notes that the business models of private mortgage insurers shifted following the introduction of Private Mortgage Insurer Eligibility Requirements by Fannie Mae and Freddie Mac in 2015. This shift created opportunities for reinsurers to assume a larger share of mortgage insurance risk.<\/p>\n

The report finds that private mortgage insurers ceded an average of 31.5% of premiums in 2024, slightly down from 32.1% in 2023. In both years, over half of the ceded premiums were allocated to unaffiliated reinsurers\u201416.1% in 2024 compared with 19.1% in 2023.<\/p>\n

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\"Brit<\/a><\/div>\n<\/div>\n

AM Best also highlights that private mortgage insurers have tapped capital markets for excess of loss reinsurance through mortgage insurance-linked securities (MILS) transactions, which have been used since 2015. While MILS continue to serve as a key risk transfer tool, issuance has slowed alongside declines in mortgage originations caused by higher mortgage rates, according to AM Best.<\/p>\n

Another path for reinsurers to assume mortgage risk is through the credit risk transfer (CRT) programs of the government-sponsored enterprises.<\/p>\n

As AM Best explains, these programmes involve quota share agreements with protected cell companies, which in turn enter excess of loss arrangements with the GSEs.<\/p>\n

The report notes that, in line with MILS trends, fewer mortgage originations have led to a decline in CRT transactions. AM Best also observes that higher attachment points in these deals have lowered premiums paid to reinsurers, making them less attractive.<\/p>\n

\u201cThe share of premium ceded to unaffiliated reinsurers has increased markedly since 2016, reflecting the maturation of the traditional reinsurance market for mortgage risk,\u201d added Wai Tang, Senior Director, AM Best.<\/p>\n

\u201cReinsurers have grown increasingly comfortable with this risk due to its consistently strong performance, as demonstrated by low loss ratios in recent years, and its diversification benefits within a broader property\/casualty underwriting portfolio.\u201d<\/p>\n

\u201cBecause US mortgage credit risk remains attractive, reduced access to US mortgage credit risk via the GSEs\u2019 credit risk transfer programs may drive greater reinsurer interest in participating in private mortgage insurers\u2019 traditional reinsurance structures,\u201d commented Matt Tuite, Director, AM Best.<\/p>\n

\u201cOverall, traditional reinsurers and capital markets investors have shown a robust appetite to provide capacity for mortgage credit risk.\u201d<\/p>\n

The post US private mortgage insurers increase use of reinsurance: AM Best<\/a> appeared first on ReinsuranceNe.ws<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

According to AM Best, a credit rating agency and provider of financial data and analysis for the insurance industry, US […]<\/p>\n","protected":false},"author":1,"featured_media":516,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[],"_links":{"self":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts\/2281"}],"collection":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/comments?post=2281"}],"version-history":[{"count":3,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts\/2281\/revisions"}],"predecessor-version":[{"id":2284,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/posts\/2281\/revisions\/2284"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/media\/516"}],"wp:attachment":[{"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/media?parent=2281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/categories?post=2281"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.xinetica.com\/index.php\/wp-json\/wp\/v2\/tags?post=2281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}