Arch Capital Group Acquires CMG MI, PMI
Bermuda-based Arch Capital Group Ltd. announced that its U.S.-based subsidiaries [Arch U.S. MI] have completed the acquisition of CMG Mortgage Insurance Company and the mortgage insurance operating platform of PMI Mortgage Insurance Co.
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.
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.”
