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CMG Mortgage Insurance on solid financial footing
SAN FRANCISCO (8/8/11)--Although the mortgage insurance industry in general has recently reported losses, CMG Mortgage Insurance Co. (CMG MI) issued a statement Friday reconfirming its financial strength and ability to originate new mortgage insurance. "Despite current industry stresses, CMG MI is on solid financial footing," said Kim Shaul, senior vice president and general manager of the company. "CMG MI leads the mortgage insurance industry in several key areas--ratings, risk-to-capital and delinquency ratios, and liquidity," she added. The company operates as a corporate joint venture between CUNA Mutual Insurance Society and PMI Mortgage Insurance Co. It provides private mortgage guaranty insurance to protect credit unions against potential losses from borrower default. "Because CMG MI works exclusively with credit unions, who know their members, our book of business performs at a higher level," she said. "Rating agencies have also recognized this strength as well as our successful record in loss mitigation." She cited several factors as evidence for the insurer's solid footing:
* The company is a stand-alone, incorporated entity with its own capital and staffing in a number of operational departments, including claims. * It has the industry's strongest risk-to-capital ratio of 19.7 to 1, as of June 30. * It benefits from expertise and synergies of two shareholders, including CUNA Mutual Group, which is currently rated "A" by A.M. Best. * As a separate legal entity, its investment grade ratings--"BB" from Standard & Poor's (S&P's) and "BBB" from Fitch Ratings--are based primarily on its own capital, operations performance and loss mitigation, independent of its shareholders. Its Fitch rating was affirmed in July. S&P's rating has been stable since February 2010. * It has the industry's lowest portfolio delinquency ratio--5.3% as of June 30 and an improvement from 5.6% on March 31. That compares with the industry average ratio in the 16% range. * It has a strong liquidity position, as of June 30, with claims-paying resources, backed by cash and readily marketable securities of $328 million. * It has $171 million in loss reserves for claims as of the end of second quarter. * Its 2-to-1 ratio of liquidity to reserves is one of the highest in the mortgage insurance industry. * Its delinquency inventory improved in second quarter, resulting in a favorable release of more than $8 million in previously established loss reserves.


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