Mortgage Insurance Losses Narrow to $1.9bn
Underwriting losses in the mortgage and finance guaranty segment reached $1.9bn for Q109, but compared to the same quarter for 2008, losses might reach a plateau, according to a report from A.M. Best, a global credit rating system. In Q108, mortgage and financial insurance companies registered $3.3bn in losses, an analyst at A.M. Best said. The losses are decreasing, but their magnitude still impacts the US property and casualty insurance industry’s net income, which plummeted by 87% in Q109 from the same quarter last year to $1.2bn. “The year over year decline in earnings was primarily due to the severe and prolonged turmoil in the financial markets and the related impact on the industry’s net investment income and realized capital losses,” analysts said in the report. Mortgage insurance companies protect lenders against loss on defaulted loans. Analysts couldn’t point to a specific cause for the quarterly losses, and a mortgage insurance firm could not comment ahead of Q2 earnings releases. Write to Jon Prior.