Essent Guranty Takes Over Triad's Operating Platform
Triad Guaranty, a mortgage insurer, reached an agreement to sell its information technology and operating platform to Essent Guaranty, a new mortgage insurer that provides capital to the housing finance system. For $30m, Essent acquires all of Triad’s proprietary mortgage insurance software and a substantial amount of the supporting hardware, along with other assets. The first $15m is fixed, and the additional half adjusts on Essent’s ability to write a minimum amount of insurance in the future, according to the release. Triad will still hold obligation for the risks insured under its current contracts, and some information technology and operations employees expect to join Essent, according to the release. The agreement includes Essent continuing to provide information systems maintenance and services to Triad, which will still directly manage loss mitigation and claims during its run-off. Loss management, quality assurance and corporate personnel will be retained. "While preserving our control over loss mitigation and claims processing to protect our policyholders during run-off, Triad stakeholders benefit from the proceeds generated by the sale of the platform and reduced costs to service our run-off book of business going forward,” says Ken Jones, president and CEO of Triad. Mark Casale, the president and CEO of Essent adds: “The acquisition of Triad's operating platform is the next major step in the formation of Essent's mortgage insurance business, which is being created to support qualified borrowers who can afford a home, but may not have the funds for a large down payment.” Write to Jon Prior.