Capsicum Re places $78.5m ILN for Arch MI


Capsicum Re has partnered with Arch Mortgage Insurance (Arch MI) to raise and place the first reinsurance capacity for Bellemeade Re 2020-1, a special purpose reinsurer.

In what is believed to be the first mortgage indemnity insurance-linked note (ILN) since the COVID-19 outbreak, Capsicum Re has obtained $78.5 million of indemnity reinsurance for Arch MI. It covers a pool of approximately $44 billion of mortgages, linked to 163,292 loans issued by Arch MI and affiliates primarily in the second half of 2019.

Freddie Scarratt, account executive at Capsicum Re, said: “Despite the macroeconomic headwinds and financial market volatility of recent months, reinsurers have demonstrated their openness to new transactions and willingness to work in collaborative partnership with specialist brokers and clients on their risk transfer needs.” 

Scarratt added: “The fact that this is the first mortgage indemnity ILN transaction since the onset of COVID-19 – and the first to incorporate direct reinsurance capacity – also underlines the importance of reinsurance as a capital source in the marketplace.”

Steve Rance, managing partner of mortgage indemnity reinsurance at Capsicum Re, noted the deal had been Capricum’s second large mortgage insurance placement in the US post-COVID. “Raising in excess of the required capacity in today’s challenging environment is an exceptional result,” he said. “It is testament to both the quality of Arch MI’s mortgage book and the deep expertise and strong market relationships of our team.”

Capsicum Re, Freddie Scarratt, Steve Rance, Insurance linked note

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