AM Best has released a new market segment report examining the U.S. mortgage credit risk reinsurance market. The report, titled “Reinsurance Market for US Mortgage Credit Risk Matures,” highlights the continued role of reinsurance in private mortgage insurance and the expanding use of unaffiliated reinsurers. It was published as part of AM Best’s coverage of the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo.
Key Findings from the Report
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Premium Ceded by Private Mortgage Insurers
In 2024, U.S. private mortgage insurers ceded an average of 31.5% of their premium, compared to 32.1% in 2023. More than half of that ceded premium went to unaffiliated reinsurers, with 16.1% in 2024 and 19.1% in 2023. -
Maturation of the Reinsurance Market
According to AM Best’s Wai Tang, senior director, reinsurers have become more comfortable with mortgage credit risk due to its strong performance and diversification benefits within property/casualty portfolios. The share of premium ceded to unaffiliated reinsurers has increased notably since 2016. -
Mortgage Insurance-Linked Securities (MILS)
Private mortgage insurers have also utilized excess of loss reinsurance capacity through MILS transactions since 2015. However, issuance of these securities has declined in recent years, reflecting lower mortgage origination volumes amid higher mortgage rates. -
Credit Risk Transfer (CRT) Programs
Another reinsurance channel comes through Fannie Mae and Freddie Mac’s CRT programs. Reinsurers participate via quota share agreements with protected cell companies, which then enter into excess of loss agreements with the GSEs. Fewer mortgage originations have led to fewer CRT transactions. Attachment points in recent years have risen, resulting in lower premiums for reinsurer counterparties and making these structures less attractive.
Market Perspectives
Matt Tuite, director at AM Best, noted that reduced opportunities in GSE CRT programs could increase reinsurer interest in traditional private mortgage insurer structures. He emphasized that both traditional reinsurers and capital markets investors continue to show a strong appetite for mortgage credit risk.
Access to the Report and Event Information
The full report is available at AM Best. Additional global reinsurance reports and video coverage are also available at AM Best’s Reinsurance Information Center.
AM Best will host its annual reinsurance market briefing during the Rendez-Vous de Septembre on September 7, 2025, at 10:15 a.m. (CEST) in Monte Carlo. Further details are available on the event website.
About AM Best
AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Headquartered in the United States, AM Best operates in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore, and Mexico City. More information is available at www.ambest.com.
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