Arch diversifies mortgage book with Westpac deal in Australia

Arch Capital’s mortgage group has agreed to acquire Westpac Lenders Mortgage Insurance (WLMI), an Australian mortgage insurer owned by Westpac Group.

WLMI had shareholders’ equity of $A285.7 million as of Sept. 30, 2020. As part of the agreement, WLMI will retain its existing risk in force and become Westpac’s exclusive provider of LMI on new mortgage originations for a period of 10 years. Upon completion of the transaction, Arch intends to combine the operations of WLMI and its existing Australian LMI company, Arch LMI.

Arch has been active in the Australian LMI market since 2011, when it began providing support for WLMI’s reinsurance treaties. In 2019, Arch LMI was authorized as a lenders mortgage insurer by APRA.

Arch said the acquisition of WLMI will secure its Australian LMI flow of business from Westpac Bank and augment its position as the only globally diversified insurer of mortgage credit risk. In addition to Australia, Arch has mortgage insurance and reinsurance operations in Bermuda, Europe and the US.

“Australia has been and continues to be an important market for our mortgage insurance business. This acquisition reinforces our commitment to both the market and our clients and enhances Arch’s position as a leading provider of LMI in Australia,” said David Gansberg, CEO, Global Mortgage for Arch Capital Group. “We look forward to continuing our long-standing partnership with Westpac by being their exclusive provider of LMI and will remain focused on providing innovative solutions and excellent service to clients across Australia.”

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