Transaction Expands Use of Insurance Linked Securities (ILS) to
Mortgage Insurance Business
NEW YORK--(BUSINESS WIRE)--Aug. 6, 2015--
American International Group, Inc. (NYSE:AIG) today announced that its
mortgage insurance business United Guaranty Corporation (UGC) obtained
$298.9 million of indemnity reinsurance from Bellemeade Re Ltd., a
Bermuda-domiciled special purpose insurer, for a portfolio of mortgage
insurance (MI) policies issued from 2009 through the first quarter of
2013.
Bellemeade Re is funding its reinsurance obligations through the
issuance to investors of three classes of 10 year notes. This
insurance-linked securities (ILS) transaction closed July 29, 2015 and
provides UGC with fully collateralized coverage from Bellemeade Re for
potential losses on its MI portfolio.
AIG is one of the largest buyers of reinsurance protection backed by the
capital markets through insurance-linked securities. Over the last
several years, AIG has used the ILS market to successfully transfer over
$3 billion of risk to the capital markets from its property portfolio
through natural catastrophe bonds, or CAT bonds. The Bellemeade Re
transaction expands the scope of risk AIG has brought to investors to
include mortgage insurance.
“I am very pleased to see the overwhelming support investors have shown
to this transaction and in general to our strategy to expand the ILS
market,” said Peter Hancock, President and Chief Executive Officer of
AIG. “A robust ILS market allows AIG to have a more flexible and
efficient capital structure for the benefit of our customers and
shareholders.”
United Guaranty President and CEO Donna DeMaio added, “United Guaranty’s
financial strength and depth of knowledge have enabled us to
successfully tap the capital markets for risk transfer, a differentiator
for us in the mortgage insurance space. This makes the MI industry
financially stronger, while demonstrating the advanced financial
capabilities that make United Guaranty uniquely qualified to be an
important partner to mortgage lenders.”
Certain statements in this press release constitute forward-looking
statements. These statements are not historical facts but instead
represent only AIG’s belief regarding future events, many of which, by
their nature, are inherently uncertain and outside AIG’s control. It is
possible that actual results will differ, possibly materially, from the
anticipated results indicated in these statements. Factors that could
cause actual results to differ, possibly materially, from those in the
forward-looking statements are discussed throughout AIG’s periodic
filings with the SEC pursuant to the Securities Exchange Act of 1934.
American International Group, Inc. (AIG) is a leading global insurance
organization serving customers in more than 100 countries and
jurisdictions. AIG companies serve commercial, institutional, and
individual customers through one of the most extensive worldwide
property-casualty networks of any insurer. In addition, AIG companies
are leading providers of life insurance and retirement services in the
United States. AIG common stock is listed on the New York Stock Exchange
and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com
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AIG is the marketing name for the worldwide property-casualty, life and
retirement, and general insurance operations of American International
Group, Inc. For additional information, please visit our website at www.aig.com.
All products and services are written or provided by subsidiaries or
affiliates of American International Group, Inc. Products or services
may not be available in all countries, and coverage is subject to actual
policy language. Non-insurance products and services may be provided by
independent third parties. Certain property-casualty coverages may be
provided by a surplus lines insurer. Surplus lines insurers do not
generally participate in state guaranty funds, and insureds are
therefore not protected by such funds.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150806005703/en/
Source: AIG
AIG
Media:
Matt Gallagher, 212-458-3247
matthew.gallagher2@aig.com
or
Investors:
Liz
Werner, 212-770-7074
elizabeth.werner@aig.com