More than half of US mortgage reinsurance is backed by the Bermuda reinsurance market, according to new analysis by the Association of Bermuda Insurers & Reinsurers (ABIR).
Reinsurance companies on the island provided increased capacity to US monoline private mortgage insurers in recent years, upping their share of reinsurance support from just under 30% in 2016 to over 50% in 2020.
“The Bermuda re/insurance market has long been known to provide peace of mind for Americans against natural catastrophe risks, including hurricanes, tornados and floods,” said Marc Grandisson, CEO of Arch Capital Group and Chair of ABIR. “Now, data shows the Bermuda market is playing an increasing role in helping Americans achieve the dream of home ownership.”
ABIR analysed data from the US National Association of Insurance Commissioners (NAIC) filings for US monoline mortgage guaranty premiums ceded to find the Bermuda market share of for the past five years.
In 2020, the Bermuda market share of US monoline mortgage insurers’ reinsurance was 50.3%, continuing a steady growth trend up from 43.8% in 2019, 33.7% in 2018, 30.1% in 2017 and 29.5% in 2016.
“Mortgage insurance plays a critical role in making home ownership possible for many Americans,” Grandisson continued. “It eases the burden of down payments and provides a fast track to buying property. Without it, many citizens would have to wait years to save up to purchase their own home.”
ABIR noted that over the last decade its members have provided significant capital to support the GSE CRT programs, as well as the US real-estate market’s recovery and transformation broadly.
Global broker Aon estimates that CRT from GSEs to the Bermuda reinsurance market was approximately 60% in 2020, further protecting US taxpayers.
“The post-pandemic economy, coupled with an increasing global focus on facilitating equitable opportunities in all communities, could amplify the role reinsurance capital plays in making home ownership possible,” said John M. Huff, CEO of ABIR. “The Bermuda market is pleased to be part of the process in helping Americans from all walks of life benefit from home ownership.”