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Westpac has announced that it will sell its Lender Mortgage Insurance (LMI) business to Arch Capital Group.
The deal, which is expected to be completed by the end of August, also includes an agreement for Arch to become Westpac’s exclusive provider of LMI on new mortgage originations for a period of 10 years.
Read more: Westpac merges consumer and business divisions
In a statement, Westpac said the deal builds on its existing relationship with Arch, which has provided reinsurance services to the group since 2011.
“Westpac is pleased to be entering into a long-term partnership with Arch as LMI is an important product that helps the group make home ownership more accessible for more Australians,” said Jason Yetton, chief executive, specialist businesses and group strategy at Westpac. “The sale continues the simplification of our business and builds on our progress in becoming a simpler, stronger bank focussed on consumer, business, and institutional banking.”
For its part, Arch said the deal would “augment the company’s position as the only globally diversified insurer of mortgage credit risk.”
“Australia has been and continues to be an important market for our mortgage insurance business,” said David Gansberg, chief executive officer, global mortgage at Arch Capital Group. “This acquisition reinforces our commitment to both the market and our clients and enhances Arch’s position as a leading provider of LMI in Australia. We look forward to continuing our long-standing partnership with Westpac by being their exclusive provider of LMI and will remain focused on providing innovative solutions and excellent service to clients across Australia.”
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