Euclid establishes MGU for mortgage re/insurance market

Euclid establishes MGU for mortgage re/insurance market | Insurance Business Australia

Reinsurance

Euclid establishes MGU for mortgage re/insurance market

Two reinsurance experts named to the top posts

Reinsurance

By
Kenneth Araullo

Euclid Program Managers has announced the launch of Euclid Mortgage, a managing general underwriter (MGU) focused on underwriting mortgage credit risk for insurers and reinsurers.

The new offering aims to address a market need by providing scalable access to the profitable and diverse mortgage reinsurance market.

Leading the initiative are Joe Monaghan (pictured above, left) and Joe Hissong (pictured above, right), two experienced figures in the mortgage reinsurance industry. Monaghan will serve as the managing principal and CEO of Euclid Mortgage, following his contributions to the post-GFC mortgage reinsurance market at Aon.

Hissong, on the other hand, will join as chief operating officer, bringing experience from Essent Group, Ltd, where he helped establish its MGA and Bermuda reinsurer.

Euclid Mortgage will utilize a digital platform that combines third-party and proprietary analytics to underwrite mortgage credit risk, aiming to deliver stable returns for carrier partners.

John Colis, president and CEO of Euclid Insurance Services, referred to the team as the “Dream Team” of mortgage re/insurance experts.

“We believe we have assembled the ‘Dream Team’ of mortgage (re)insurance experts at Euclid Mortgage. No one can match their expertise, contacts, or portfolio optimization analytics, and we are delighted to partner with them,” Colis said.

The launch of Euclid Mortgage comes at a strategic time, given the significant profits generated by the mortgage reinsurance sector since the Great Financial Crisis and its resilience during economic downturns like the COVID pandemic.

Monaghan noted that the segment has generated over $11 billion in profit for reinsurers since the Great Financial Crisis and demonstrated its ability to handle spikes in defaults during the COVID pandemic.

“Mortgage originations are poised to grow significantly as and when mortgage rates decline, and that will generate additional reinsurance demand as well as opportunities for structural innovation,” Monaghan said.

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