Feb. 8, 2013
Arch Capital Group Ltd., to Acquire Entire Equity Interests in CMG MI; CUNA Mutual Group Will Continue Serving Credit Unions Through Distribution and Reinsurance Agreement
MADISON, Wis. – CUNA Mutual Group and the Director of the Arizona Department of Insurance (DOI) in her capacity as Receiver (“Receiver”) for PMI Mortgage Insurance Co. (PMI), announce an agreement today that will support the future growth of CMG Mortgage Insurance Company (CMG MI). Under the business arrangement, Arch Capital Group Ltd., through its U.S.-based subsidiaries (Arch U.S. MI), will acquire all outstanding equity interests in CMG MI from PMI and CUNA Mutual Group.
CMG MI is jointly owned by PMI and CUNA Mutual Group.
CUNA Mutual Group will enter into distribution and reinsurance agreements with CMG MI, continuing CMG MI’s private mortgage insurance offerings to credit unions. The transactions with Arch U.S. MI are expected to close within 12 months, subject to approval of the Arizona receivership court, regulatory approvals and satisfying other customary closing conditions.
“Our goals have been consistent from the start of this process: Protect policyholders, deliver strong service to customers, and aim for a long-term, viable solution for credit unions to have a private mortgage insurer that is sensitive to and understands their unique mission,” said Jeff Post, President & CEO, CUNA Mutual Group. “Through its significant financial resources and risk management expertise, the agreement with Arch supports the stability and future growth of CMG MI.
“We are confident that, following the purchase of CMG MI by Arch, CMG MI will continue to provide the customer-focused products and services that have made CMG MI the long-standing market leader in meeting the mortgage insurance needs of credit unions.”
Arch U.S. MI will purchase PMI’s information technology platform and systems and, as a result, CMG MI is expected to enjoy uninterrupted delivery of technology support for its operations. With the proposed distribution arrangement, CUNA Mutual Group mortgage insurance sales staff will continue to serve credit union customers on behalf of CMG MI.
“In order to ensure uninterrupted access to a best-in-class origination and servicing platform, talented underwriting and back-office support, we wanted to find a buyer who had the capability and expertise to continue investing in this unique business,” said Sean Dilweg, CUNA Mutual Group vice president and product executive for CMG MI. “We are confident Arch U.S. MI more than fulfills all of these requirements.
“Similar to our successful partnerships with Liberty Mutual and State National Companies, CUNA Mutual Group will use its marketplace knowledge and distribution strengths, combined with Arch’s financial strength and commitment to mortgage insurance, to bring a stronger product solution to its credit union customers. We look forward to a strong partnership with Arch.”
Arch Capital Group Ltd. (ACGL) is a financially strong international insurer and reinsurer. ACGL’s principal operating insurance and reinsurance subsidiaries have been issued the following financial strength ratings: “A+” (Superior) by A.M. Best, “A+” (Strong) by Standard & Poor’s, “A1” (Good) by Moody’s, and “A+” by Fitch Ratings.
For Arch Capital Group Ltd., the agreement allows the company to enter the rapidly improving U.S. mortgage insurance marketplace and broaden its existing mortgage insurance and reinsurance capabilities.
“We are very gratified that PMI’s exceptionally strong management team and staff will be joining Arch. Together with our senior executives, they will form an industry-leading team with broad capabilities to meet our clients’ needs over the long term,” said Marc Grandisson, Chairman and CEO of Arch Worldwide Reinsurance Group. “We are also extremely pleased to partner with CUNA Mutual Group on an ongoing basis. Their access to the credit union marketplace and brand reputation should allow us to secure a strong flow of credit union business.”
“The petition being filed for court approval of this agreement is a significant milestone and positive step in the PMI receivership,” said Germaine L. Marks, Director of the Arizona Department of Insurance. "CUNA Mutual's collaborative efforts with PMI and the receivership team were instrumental in achieving this result. The acquisition of CMG MI is an important component of the overall transaction with Arch and is a cornerstone of their commitment to the private mortgage insurance market.”
CUNA Mutual Group insurance, retirement and investment products provide financial security and protection to credit unions and their members worldwide. With more than 75 years of true market commitment, CUNA Mutual Group’s vision is unwavering: To be a trusted business partner who delivers service excellence through customer-focused products and market-driven insight. More information on the company is available on the company’s website at www.cunamutual.com.
CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Life, accident, health and annuity insurance products are issued by CMFG Life Insurance Company. Property and casualty insurance products are issued by CUMIS Insurance Society, Inc. Each insurer is solely responsible for the financial obligations under the policies and contracts it issues. Corporate headquarters are located in Madison, Wisconsin.
About Arch Capital Group Ltd.
Arch Capital Group Ltd., a Bermuda-based company with approximately $5.75 billion in capital at Sept. 30, 2012, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward- looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forward−looking statements, which reflect our current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward−looking statements.
Forward−looking statements can generally be identified by the use of forward−looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or their negative or variations or similar terminology. Forward−looking statements involve our current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and our ability to maintain and improve our ratings; investment performance; the loss of key personnel; the adequacy of our loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; our ability to successfully integrate, establish and maintain operating procedures as well as integrate the businesses we have acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to us of reinsurance to manage our gross and net exposures; the failure of others to meet their obligations to us; and other factors identified in our filings with the U.S. Securities and Exchange Commission.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. All subsequent written and oral forward−looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward−looking statement, whether as a result of new information, future events or otherwise.
© 2013 CUNA Mutual Group, All Rights Reserved