While most people are familiar with CMHC , Canada's largest mortgage default insurer, many are not aware that Genworth Financial, a private insurer is also active in Canada. In 2007, a third insurer entered the market in what could be called the boom times in the Canadian real estate market. While the firm did well, the failure of it's parent company, AIG Garanty in the USA, brought unwanted instability and ruined their name. MortgagebrokerNews , a online trade publication issued an article recently on the third insurer. Here it is in it's entirety. As per usual , if you have any questions contact me at Calgary Mortgage Broker.
Canada’s “third” mortgage default insurer is gearing up for a significant growth spur, the company readying to welcome a major lender to the fold at the same time it meets growth targets.
“We have achieved our year-to-date business projections, despite the relatively soft market,” Andy Charles, president and CEO of Canada Guaranty told MortgageBrokerNews.ca., pointing to January through May premium numbers that have seen the Canadian-owned company cement market share. The progress comes even as the growth of new originations slows for Central and Eastern Canada as well as key Western centres.
The return to a more stable spring market coincides with Canada Guaranty’s first-year anniversary, the company’s launch coming in April 2010 with the acquisition of AIG’s book in this country. The new company is the only 100-per cent Canadian-owned private mortgage insurer, with Ontario Teachers’ Pension Plan and National Guaranty Mortgage Holdings Inc. as principal shareholders. That ownership team inherited the market’s No. 2 private insurer with assets of $270 million and a total equity of more than $118 million. Market share at the time was pegged at one per cent to two per cent of Canadian volumes.
Charles is actively building on that position, with a strategy focused on winning large institutional lenders. It’s now paying off.
“Canada Guaranty anticipates the announcing a new major lender to the group in June,” he said, with details to follow over the next couple weeks. The addition of one of the country’s Big Six would strengthen the insurer’s hand as competitor Genworth Canada grapples with the slowing market.
While the leading residential mortgage insurer outside of CMHC realized $101 million on net premiums written during the first three months of 2011, that's $33 million lower than the previous quarter. It does, however, represent a year-over-year improvement of $7 million, according to the company’s Q1 financial statement.
Some analysts were expecting a surge in new policies resulting from a crush of homebuyers looking to get into the market ahead of tougher federal mortgage rules.
That wave of business failed to materialize.
“The government mortgage rule changes that took effect March 18, 2011 did not have a material impact on mortgage originations in the quarter,” according to the Genworth report. “We delivered solid net premiums written in a slower origination market,” added CEO Brian Hurley.
Canada Guaranty hasn’t yet released details about its own performance in the run-up to that mid-March deadline, although brokers and a CMHC official both point to an active period, reflecting an increased number of refinancing applications.
Building relationships with individual brokers as well as broker channel lenders has been a top priority for Canada Guaranty, Charles told MortgageBrokerNews.ca. A large part of that is a user-friendly model, offering broker tools such as AMP-accredited continuing education and a quarterly market report.
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