This revised all-cash consideration is valued at approximately $700 million and represents a premium of approximately 96% to Watford’s unaffected closing common share price on September 8, 2020, the last trading day prior to media reports about the possibility of a transaction between Watford and Arch. (NASDAQ: WTRE) (“Watford”) today announced a revised definitive agreement under which Arch will acquire all of the common shares of Watford for an increased price of $35.00 per share. (NASDAQ: ACGL) (“Arch” or “the Company”) and Watford Holdings Ltd. PEMBROKE, Bermuda-(BUSINESS WIRE)-Arch Capital Group Ltd. Watford Shareholder Enstar Group to Support Revised Transaction So it is on the service side where the PMIs can compete.Warburg Pincus and Kelso & Company to Join Arch Capital Group as Investment Partners in Watford Holdings Transaction The companies try to be good from a service standpoint, to make the process seamless or for the lender make their lives easier," said Bose George, an analyst with Keefe, Bruyette & Woods. "The product that everyone sells is the same I don't think there is any way to really differentiate what you are doing. This is because lenders see PMI as a commodity. "In 60 years of doing business, we know that customer experience is the most important thing and is our most important differentiator," Crowley said. And that includes getting the quote out earlier in the process, she continued. We just feel that education is the most important component of that and once given all of the options, the consumer is able is to make the choice that is right for them," said Margaret Crowley, vice president of marketing and customer experience. "We feel that it is important that a consumer understands what their options are. So even though the borrower is not MGIC's customer, it sees the need to educate them about the product. Giving them the MI upfront to evaluate that is going to help them see the big picture," said Leslie Malicki, MGIC's business partner relationship manager. "We definitely want the borrower to know that MI is an option…that they need to consider in their buying decision. Leslie Malicki, business partner relationship manager, MGIC "We definitely want the borrower to know that MI is an option…that they need to consider in their buying decision." PreApp 1003 lets loan officers do prequalifications on mobile devices its customers can get price quotes from Mortgage Guaranty Insurance Corp. Arch's challenge is "getting them to understand what Arch is about and part of that educational process is introducing them to some of the alternative products that we have," Gansberg said.Īrch isn't the only PMI carrier considering mobile delivery. Each lender has one account manager as a point of contact. There is one sales team for both Arch subsidiaries and UG. "So we can work with lenders on creating custom programs, on really serving their needs and finding out exactly what they want," Gansberg said. Since it's not a GSE-eligible mortgage insurer, Arch Mortgage Guaranty does not follow the GSEs' capital standards or underwriting rules. So it is about trying to deliver a better product to them," said Gansberg.Īrch has gone so far as to create a separate underwriting subsidiary for portfolio loans, Arch Mortgage Guaranty. Loan officers "get quotes in a fast manner, with an easy sign on and they get the stability of knowing once they get a price it's not going to change, without a change to significant risk characteristics. That involves delivering the mortgage insurance rate quote to loan officers into the field so they can access it on a mobile device and pass the information on to the consumer. That innovation comes in the form of, not necessarily the black box, but the way that rates and the way that mortgage insurance is delivered to customers." "Where we try to differentiate ourselves is on innovation. Our business plan is not built around that," Gansberg said. "At the end of the day, the black-box pricing strategy, that's not a long-term value creator in our business, that is my belief. That's helped make for a smoother transition of combining the two businesses, but is not the only way Arch seeks to differentiate itself. When they were separate companies, Arch and United Guaranty both embraced a similar "black box" pricing philosophy that relies on granular, loan-level decisions, as opposed to the rate card and pricing matrix strategy employed by other PMI carriers.
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