Quick Facts
FONT-SIZE Plus   Neg
Share SHARE

Radian Completes Quota Share Reinsurance Agreement

RELATED NEWS
Trade RDN now with 

Insurance company Radian Group Inc. (RDN: Quote), said Tuesday that its mortgage insurance subsidiary, Radian Guaranty Inc., has entered a quota share reinsurance agreement, effective April 1, with an external reinsurance provider in order to proactively manage its mortgage insurance risk-to-capital position.

This represents the completion of the reinsurance agreement described in the fourth quarter 2011 earnings conference call by the company and is a continuation of its ongoing capital management activities designed to increase financial flexibility.

The company also released data for new insurance written and primary mortgage insurance delinquencies for March 2012.

Ibrahim. ceo of the company, "The external reinsurance agreement provides us with additional capital flexibility. We are off to a strong start in 2012 with $6.5 billion of high-quality, new business written in the first quarter, along with another decline in delinquent loans."

According to the quota share reinsurance agreement, Radian is ceding 20 percent of its new insurance written beginning with the fourth quarter of 2011. As of April 1, 2012, this represents $532 million of the company's risk in force. The total amount of risk that may be ceded through this arrangement is limited and is expected to be between $1.25 billion and $1.6 billion.

At a 25 to 1 risk-to-capital ratio, the equivalent capital benefit associated with ceding this amount of risk would be between $50 million and $62.5 million. Radian has the ability, at its option, to commute two-thirds of the reinsurance on December 31, 2014.

Register
To receive FREE breaking news email alerts for Radian Group Inc and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
The U.K. economy grew more than estimated in the second quarter and the current account deficit widened from the first quarter, the Office for National Statistics said Tuesday. Gross domestic product grew 0.9 percent sequentially, up from the prior estimate of 0.8 percent. The annual growth was confirmed at 3.2 percent. Eurozone inflation slowed in September, as expected, to the lowest since late 2009 and the unemployment rate remained stable at a double digit level in August putting pressure on the European Central Bank to launch a full-blown easing. Inflation came in at 0.3 percent, slower than August's 0.4 percent. This was the lowest since October 2009, when prices fell 0.1 percent. Chinese authorities on Tuesday eased some rules for mortgages for buying a second home, in a bid to boost the housing market. The People's Bank of China and the China Banking Regulatory Commission said in a joint statement that buyers who already own one apartment, but have paid off the mortgage...
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.