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Everest Re looking to deploy more capital in mortgage reinsurance

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Everest Re looking to deploy more capital in mortgage reinsurance

Revised capital requirements for mortgage insurance companies present an opportunity for reinsurers looking to diversify, according to John Doucette, Everest Re Group Ltd.'s reinsurance president and CEO.

Doucette said that while the company has written reinsurance for mortgage insurance companies for at least the last five years, the company is now looking to deploy more capital in the market as the regulatory landscape evolves.

"We perceive the ability to deploy capital for the foreseeable future in that space and allocate more," Doucette said on a panel at an S&P Global Ratings insurance conference.

The CEO said there are opportunities for the company, and for the reinsurance industry as a whole, given the new capital rules in the Private Mortgage Insurer Eligibility Requirements, or PMIERs, on mortgage insurers.

"We like selling to people that need to buy," Doucette said. Because the attitude is "need to buy," rather than "nice to buy," the company is looking to take advantage of the situation.

Government-sponsored enterprises Fannie Mae and Freddie Mac are required by federal regulators to de-risk their portfolios by issuing bonds and buying reinsurance, presenting another opportunity to sell to buyers under statutory requirements. While the margins in reinsuring mortgage insurance have come down as the space has become more competitive, they are still quite attractive, Doucette said.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.