Arch U.S. MI Holdings (Arch MI) [1], a wholly owned subsidiary of Arch Capital Group Ltd. [2], has entered into a definitive agreement to acquire Republic Mortgage Insurance Company (RMIC) [3] and its subsidiaries that together comprise the run-off mortgage insurance business of Old Republic International Corporation [4].
“Our ability to leverage the scale of our platform to gain significant expense and capital synergies makes this an attractive financial transaction for Arch,” said David Gansberg, CEO of Arch’s Global Mortgage Group [5]. “Our teams are experienced and proficient at acquiring and integrating mortgage insurance companies, which we expect will help us quickly maximize the value of this acquisition.”
Once the transaction is closed, RMIC’s $1 billion risk in force (RIF) portfolio will be integrated into Arch MI’s existing U.S. primary mortgage portfolio, which had a RIF of $75.9 billion as of Sept. 30, 2023.
The transaction is expected to close in the first half of 2024, and is subject to regulatory approval. Jefferies LLC served as Arch’s financial advisor and Eversheds Sutherland served as Arch’s legal advisor.
Headquartered in Greensboro, North Carolina, Arch MI's mission is to protect lenders against credit risk, while extending the possibility of responsible home ownership to qualified borrowers. Arch MI’s flagship mortgage insurer, Arch Mortgage Insurance Company, is licensed to write mortgage insurance in all 50 states, the District of Columbia and Puerto Rico.
RMIC protects lenders from losses due to defaults on first mortgages for residential properties. Since beginning operating in 1972, RMIC has insured loans for the purchase or refinancing of homes when the amount borrowed exceeded 80% of the property's value. With the collapse of the housing and credit markets, the business shifted into a run off operating mode in 2011.
RMIC is a subsidiary of Old Republic International Corporation, a company that traces its beginnings back to 1923, although several acquired subsidiaries began operations much earlier. The company ranks as one of the nation’s 50 largest shareholder-owned insurance businesses.