Increased capital ratio supports Arch Indemnity's growth

Fitch expects this ratio to remain above the insurer’s internal target range.

Arch Lenders Mortgage Indemnity Ltd.'s (Arch Indemnity) capitalisation remains robust, with its regulatory capital coverage ratio increasing to 2.70x as of June 2024, up from 2.45x at the end of 2023, according to Fitch Ratings. 

Fitch expects this ratio to remain above the insurer’s internal target range.

The insurer holds a 32% market share in Australia’s lenders' mortgage insurance (LMI) sector, making it the second-largest provider. 

Whilst it historically relied on premiums from Westpac Banking Corporation, Arch Indemnity has expanded its client base to include two additional lenders since its acquisition by ACGL in 2021. 

Fitch anticipates further diversification of its customer portfolio over the medium term.