Arch Capital Group Ltd. (NASDAQ:ACGL) today announced that its
U.S.-based subsidiaries (Arch U.S. MI) have completed the acquisition of
CMG Mortgage Insurance Company (CMG MI) and the mortgage insurance
operating platform of PMI Mortgage Insurance Co. (PMI). As part of the
transaction, CMG MI, which will be renamed “Arch Mortgage Insurance
Company,” has obtained approval as an eligible mortgage insurer from
Fannie Mae and Freddie Mac, subject to maintaining certain ongoing
requirements.
The completion of the transaction enables Arch U.S. MI to enter the U.S.
mortgage insurance marketplace immediately and allows the Company to
serve all lenders nationwide, including CMG MI’s existing credit union
customers. The acquisition provides Arch U.S. MI with mortgage insurance
licenses across the United States and a comprehensive mortgage insurance
operating platform. In addition, Arch U.S. MI entered into a
distribution agreement with CMFG Life Insurance Company (CUNA Mutual)
and a reinsurance agreement with an affiliate of CUNA Mutual. These
arrangements with CUNA Mutual will provide CMG MI’s existing customer
base with a seamless transition and also will enable Arch U.S. MI to
gain immediate access to the credit union marketplace.
The acquisition broadens ACGL’s existing global mortgage insurance and
reinsurance capabilities. Arch U.S. MI will complement ACGL’s existing
European Union-based mortgage insurance and global reinsurance
operations. In addition to traditional mortgage insurance, affiliates of
ACGL provide various risk sharing products to mortgage lenders as well
as Fannie Mae and Freddie Mac.
Marc Grandisson, Chairman and CEO of Arch Worldwide Reinsurance Group,
is responsible for ACGL’s global mortgage insurance and reinsurance
operations. Arch U.S. MI is led by President and CEO David Gansberg. Mr.
Gansberg joined the Arch group in 2001 and has 20 years of experience in
various actuarial, underwriting and senior management positions in the
insurance industry. Mr. Gansberg will report to Andrew Rippert, who
joined Arch in 2010 and has 16 years of experience in the mortgage
insurance industry. Mr. Rippert will be CEO of Arch Worldwide Mortgage
Insurance and Reinsurance Group and currently serves as President and
CEO of Arch Mortgage Insurance Limited based in Ireland. The current
experienced senior management team and staff of PMI and CMG MI also
joined Arch U.S. MI in connection with the transaction. The CMG MI sales
team will remain CUNA Mutual employees dedicated to serving their credit
union customers.
Constantine (Dinos) Iordanou, Chairman and CEO of ACGL, commented, “We
are extremely pleased to complete this transaction and expand our
existing mortgage insurance and reinsurance capabilities, which will
enable our company to provide a strong and diversified source of private
capital to the U.S. mortgage insurance market. We are gratified that
Arch U.S. MI will be led by experienced managers in David and Andrew and
also welcome our new colleagues from PMI and CMG MI. We believe the
impressive operational, managerial and risk management expertise of
Arch, together with the mortgage insurance professionals we have
assembled, will form an industry leading team with broad capabilities to
meet our clients’ needs. Our ability to promote from within is another
indication of the depth and strength of the management team we have
built at Arch. As we develop our new business, we look forward to
working with Fannie Mae and Freddie Mac.”
Marc Grandisson added, “All of us at Arch thank Fannie Mae, Freddie Mac,
the FHFA and the Wisconsin and Arizona Departments of Insurance for
their approval of this acquisition, as well as their support of our
Company. We are open for business and look forward to strengthening
relationships with our existing credit union customers, as well as
broadening our relationships with lenders nationwide.”
“We welcome Arch as our newest approved provider of mortgage insurance
coverage on loans delivered to Fannie Mae, through their acquisition of
the CMG Mortgage Insurance Company, which has been a Fannie Mae approved
mortgage insurer since 1994,” said Rob Schaefer, Vice President for
Credit Enhancing Strategy and Management. “Arch’s acquisition of CMG
provides additional financial support for CMG’s existing mortgage
insurance obligations with Fannie Mae and other policyholders, and also
represents another step on the road to attracting private capital to the
mortgage credit space.”
“Freddie Mac is pleased to approve Arch Mortgage Insurance Company as an
eligible mortgage insurer,” said Gina Healy, Vice President of Mortgage
Insurance and Special Asset Workouts at Freddie Mac. “Arch Capital Group
brings additional private capital to support homeownership opportunities
and to help further the nation’s housing recovery.”
About Arch Capital Group Ltd.
Arch Capital Group Ltd., a Bermuda-based company with approximately
$6.34 billion in capital at September 30, 2013, after giving effect to a
$500 million notes offering in the 2013 fourth quarter, provides
insurance and reinsurance on a worldwide basis through its wholly owned
subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward−looking statements. This release or any other
written or oral statements made by or on behalf of Arch Capital Group
Ltd. and its subsidiaries may include forward−looking statements, which
reflect our current views with respect to future events and financial
performance. All statements other than statements of historical fact
included in or incorporated by reference in this release are
forward−looking statements.
Forward−looking statements can generally be identified by the use of
forward−looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe" or "continue" or their negative or
variations or similar terminology. Forward−looking statements involve
our current assessment of risks and uncertainties. Actual events and
results may differ materially from those expressed or implied in these
statements. A non-exclusive list of the important factors that could
cause actual results to differ materially from those in such
forward-looking statements includes the following: adverse general
economic and market conditions; increased competition; pricing
and policy term trends; fluctuations in the actions of rating
agencies and our ability to maintain and improve our ratings;
investment performance; the loss of key personnel; the
adequacy of our loss reserves, severity and/or frequency of
losses, greater than expected loss ratios and adverse development on
claim and/or claim expense liabilities; greater frequency or
severity of unpredictable natural and man-made catastrophic events; the
impact of acts of terrorism and acts of war; changes in regulations
and/or tax laws in the United States or elsewhere; our ability to
successfully integrate, establish and maintain operating procedures as
well as integrate the businesses we have acquired or may acquire into
the existing operations; changes in accounting principles or
policies; material differences between actual and expected
assessments for guaranty funds and mandatory pooling arrangements; availability
and cost to us of reinsurance to manage our gross and net exposures; the
failure of others to meet their obligations to us; and other
factors identified in our filings with the U.S. Securities and Exchange
Commission.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with other cautionary
statements that are included herein or elsewhere. All subsequent written
and oral forward−looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by these
cautionary statements. We undertake no obligation to publicly update or
revise any forward−looking statement, whether as a result of new
information, future events or otherwise.
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