JSMedia – After completing a strategic review, Westpac has decided to sell its lenders mortgage insurance business to Arch. The deal is expected to close in the third quarter of 2021 and will result in a reinsurance cost of around $700 million for the lender. The transaction will give both companies the opportunity to grow their respective businesses. It will also see the former providing reinsurance services for Arch, which will enable them to better serve their clients.
The deal is likely to result in some significant cost savings for Westpac. Arch has been performing reinsurance for the bank for more than a decade. The acquisition of Westpac Lenders Mortgage Insurance Limited will give Arch the exclusive provider of LMI for the next decade. The transaction will also enhance the broader role of Arch as the only global diversified insurer of mortgage credit risk. Further, the new owner of the LMI business will retain the risk that was previously covered by the bank.
The deal has been a long-term and complex one. As the third-largest lender in Australia, Westpac intends to combine its LMI operations with Arch LMI Pty Ltd. It is anticipated that WLMI will continue to retain the risk it has in-force as a result of the merger. However, Arch’s investment in WLMI will also benefit Arch’s bottom line, as it will be the sole provider of LMI on new mortgage originations for the next decade.
Westpac to Sell Lenders Mortgage Insurance Business to Arch
The deal between Arch and Westpac is expected to close before the end of the year. The new entity will merge the existing operations of WLMI and will remain Westpac’s exclusive LMI provider for ten years. The sale is expected to benefit all stakeholders, as WLMI has already been providing LMI to the Westpac Group for the past two years. The new company will also take over the company’s motor vehicle dealer finance and novated leasing businesses.
While the deal has been finalized, Arch will continue to operate under the name of WLMI. The deal will result in a lower premium for Australian borrowers and the company will continue to support the broader home ownership sector. The acquisition of Arch will allow Westpac to focus on its core domestic and New Zealand businesses. It will also enable the bank to focus on a larger scale on its overseas expansion.
WLMI will become the exclusive LMI provider for Westpac. It will be the only LMI provider for the Westpac Group for the next ten years. In the process of buying the lender mortgage insurance business from Arch, the companies will work to create a more profitable and diversified LMI portfolio. These are a good combination of two companies. With this merger, Arch will be able to offer the best LMI to its clients.
The deal will also secure the future of the lenders mortgage insurance business in Australia. After the merger, the two companies will combine the LMI operations of WLMI and Arch LMI Pty Ltd, and will be the exclusive provider of LMI to the Westpac Group for the next ten years. Aside from a combined Australian LMI business, the new firm will also provide LMI for other Australian banks.
The deal will also provide a strong alternative to the traditional lender’s LMI. In addition to the LMI business of Arch, the deal will also benefit the lenders in Australia. The new company will be the exclusive provider of LMI for the Westpac Group for ten years. The transaction is a win-win situation for both parties. The combined companies will provide a stronger service to their clients.
The merger will create a more integrated lender’s LMI business. The combined company will provide LMI to the Westpac Group, which has been offering LMI for more than ten years. The two companies will also combine the management and legal functions of WLMI. This merger will enable both companies to focus on their core businesses. It will provide LMI for the Australian market. The merger will create a better customer experience for its clients.