CHICAGO, June 30, 2016 /PRNewswire/ -- Aon Risk
Solutions and Aon Benfield, the
global risk management businesses of Aon plc (NYSE: AON), have
assisted U.S. mortgage guarantor Freddie Mac to reach an important
issuance milestone in credit risk transfer.
The USD5bn milestone comes with
the inception of three new re/insurance policies under Freddie
Mac's successful Agency Credit Insurance Structure (ACIS®) program,
representing the largest aggregate transaction to date.
Together, these three policies provide up to a combined maximum
limit of approximately USD788m of
losses on single-family loans and transfer much of the remaining
credit risk associated with three of the Structured Agency Credit
Risk (STACR®) debt issuances this year, STACR 2016-DNA2, STACR
2016-HQA2, and STACR 2016-DNA3. These transactions are transferring
a significant portion of mortgage credit risk on approximately
USD75bn of unpaid principal balance
(UPB) on single-family mortgages.
Through ACIS, Freddie Mac obtains policies that transfer to
insurance and reinsurance companies around the globe a portion of
the credit risk associated with its STACR debt note reference
pools. Freddie Mac has placed over USD5bn in re/insurance coverage through 20 ACIS
transactions since the program's inception in 2013.
In a long-standing and successful partnership with Freddie Mac,
Aon Risk Solutions and Aon Benfield
have played a key role in generating ongoing re/insurance market
capacity for the transactions, as well as in the educational
process necessary for re/insurers to begin writing this line of
business.
Kevin Palmer, senior vice
president of single-family credit risk transfer for Freddie Mac,
said: "We could not have achieved this USD5bn ACIS milestone without the support of
Aon. Their work to educate reinsurers about this evolving
market is helping to bring new sources of capital into the credit
risk transfer arena – that's good news for U.S. taxpayers and
investors worldwide."
Eric Andersen, CEO of
Aon Benfield, added: "We are excited
that our strong and long-standing relationship with Freddie Mac has
allowed us to reach this important milestone. After initially
generating awareness and understanding of U.S. mortgage credit
business across the re/insurance industry, we continue to work with
re/insurers across the globe to assist them to develop the skills
and capabilities necessary to underwrite this type of risk. We
believe that this sector represents a key opportunity for
re/insurers, especially given that growth in many traditional
business lines is becoming more difficult to achieve. Those
re/insurers that have made investments in the requisite talent and
technology to participate have reaped the benefits of a diversified
business line, and we look forward to bringing even more markets
into this area in the coming months and years."
Further information
For further information please contact the Aon Benfield PR team:
Andrew Wragg (+44 207 522 8183 / 07595 217168) David Bogg or
Alexandra Lewis.
Follow Aon on Twitter: https://twitter.com/Aon_plc
For information on Aon plc. and to sign-up for news
alerts: http://aon.mediaroom.com
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SOURCE Aon plc