Euclid Program Managers, a leading provider in the insurance and reinsurance sectors, has announced the launch of a Managing General Underwriter (MGU) underwriting mortgage credit risk on behalf of insurers and reinsurers.
The offering, known as Euclid Mortgage, is being established to fill a market void by providing immediate and scalable access to the highly profitable and diversifying mortgage reinsurance market.
This new venture is spearheaded by two of the mortgage reinsurance industry’s most experienced leaders, Joe Monaghan and Joe Hissong.
Euclid sees this as an opportunity to leverage their extensive expertise.
Joe Monaghan will serve as the Managing Principal and CEO of Euclid Mortgage, following his significant contributions to the post-GFC mortgage reinsurance market at Aon. Joe Hissong will join as the Chief Operating Officer, bringing his experience from Essent Group, Ltd., where he played a pivotal role in establishing its MGA and Bermuda reinsurer.
Euclid Mortgage will focus on underwriting mortgage credit risk, utilising a state-of-the-art digital platform. This platform combines third-party and proprietary analytics to deliver highly accretive and stable returns for carrier partners.
John Colis, President and CEO of Euclid Insurance Services, emphasized the unparalleled expertise and strategic value the team brings, referring to them as the “Dream Team” of mortgage (re)insurance experts.
He stated, “We believe we have assembled the ‘Dream Team’ of mortgage (re)insurance experts at Euclid Mortgage. No one can match their expertise, contacts, or portfolio optimisation analytics, and we are delighted to partner with them.”
This launch of the initiative is timely, considering the significant profits generated by the mortgage reinsurance sector since the Great Financial Crisis and its resilience during economic downturns such as the COVID pandemic.
Joe Monaghan highlighted the lucrative nature of the mortgage reinsurance market, noting, “It is an ideal time to launch Euclid Mortgage. This segment has generated more than $11bn of profit for reinsurers since the Great Financial Crisis and has shown that it can weather substantial spikes in defaults like we observed during the COVID pandemic. Mortgage originations are poised to grow significantly as and when mortgage rates decline, and that will generate additional reinsurance demand as well as opportunities for structural innovation.”
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