Aon Risk Solutions and Aon Benfield have assisted Freddie Mac to reach a $5 billion issuance milestone in credit risk transfer.
The milestone comes after Freddie Mac started three new insurance and reinsurance policies under its Agency Credit Insurance Structure (ACIS) programme.
The three policies provide a combined maximum limit of approximately $788 million of losses on single-family loans, and transfer much of the remaining credit risk associated with three of the Structured Agency Credit Risk (STACR) debt issuances this year.
The transactions transfer a significant portion of mortgage credit risk on approximately $75 billion of unpaid principal balance on single-family mortgages.
Through ACIS, Freddie Mac obtains policies that transfer to insurance and reinsurance companies worldwide a portion of credit risk associated with its STACR debt note reference pools.
Eric Andersen, CEO of Aon Benfield, said: “We believe that this sector represents a key opportunity for reinsurers and insurers, especially given that growth in many traditional business lines is becoming more difficult to achieve.”
