| For
the private mortgage insurance industry, the third quarter of
2001 provided a record-setting level of business. One contributing
factor in this success was the increased participation by mortgage
insurers in bulk insurance transactions.
The additional business volume
represented by bulk insurance has fueled significant growth in
popularity of these transactions among mortgage insurance (MI)
companies looking for ways to boost coverage volume and increase
revenue. The majority of the MI industry actively participated
in bulk transactions in the third quarter, with Triad
one of the companies staking a significant claim to the business.
Bulk insurance is a term that
describes primary and supplemental mortgage insurance written
for a large group of loans that are then securitized. These loans
are put together by mortgage firms or Wall Street companies and
purchased by investors, which may include large lenders. There
are three loan segments within bulk transactions; prime, Alt A,
and subprime loans.
With the rise of bulk insurance
supported by Wall Street's continued interest in volume and the
higher prices that the transactions bring, the bulk market has
increased. Although the bulk insurance business is only a few
years old, the MI industry has really begun to make use of the
structure, with Triad one of the companies showing a third-quarter
surge in bulk business.
"Participation in both traditional
and bulk mortgage insurance is in keeping with our overall business
strategy at Triad," Darryl Thompson, President and Chief Executive
Officer said.
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For
Triad, the company's emergence in the bulk transactions arena
has contributed to its best business quarter ever, up 191% from
a year earlier. Targeting the prime or Alt-A markets, the company
participated in $2.7 billion worth of bulk transactions through
the first three quarters of the year, with bulk insurance activity
in the third quarter alone reaching $1.2 billion. This gave Triad
approximately 14 percent of the industry's third-quarter bulk
business - the fourth largest dollar amount of bulk transactions
among mortgage insurers, according to statistics from Inside Mortgage
Finance.
Experience and a focused business
strategy give Triad a strong comfort level in this arena and enable
the company to assess risk, as well as price bulk transactions
appropriately. Underwriting strengths and risk management expertise
have provided for the best loss management record in the industry.
Leveraging this strength, Triad expects to be as successful in
bulk transactions as in its traditional MI business.
Looking forward, there continues
to be potential for benefiting from the bulk insurance deals.
The expectations are that the business will continue to grow and
that Triad is prepared to grow with it.
For more information regarding
Triad's participation in bulk insurance or any of the company's
innovative services, visit Triad on the web at www.triadguaranty.com
or contact Jerrold C. Schwartz, Vice President-Marketing, via
phone at 800-628-4744, extension 1122 or email at jschwartz@tgic.com.
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