Teachers buys AIG's Canada mortgage insurance unit

I read this article in the Financial Post yesterday and found it very interesting. AIG had a tough go in Canada last year with all the negative publicity from their American company. Some had thought they would exit the Canadian market, however they made it through the year and have now been bought by the OTPP.

By Karen Mazurkewich, Financial Post Published: Tuesday, January 05, 2010

Ontario Teacher's Pension Plan has started the new year with a new acquisition. The pension plan announced that it's the lead sponsor to buy American International Group Inc's (AIG) Canadian mortgage insurance business.

No price tag was given with the deal.

"We believe the mortgage insurance industry in Canada to be an attractive market, and that United Guaranty Canada is well positioned to grow its market position," said Erol Uzumeri, senior vice-president, Teachers' Private Capital, said in a statement. Mr. Uzumeri had signaled earlier this year that the pension plan was hoping to finalize an insurance deal.

"The company has a strong management team, and Teachers' is prepared to support the growth of the business," he added.

There are only two private mortgage insurance providers in Canada. United Guaranty Canada, headquartered in Toronto, is the second largest prwith assets of $274-million and total equity of $127-million as of Sept. 30, 2009.

AIG has joined CMHC and Genworth in announcing the end of insured 40-year amortizations and 100% financing.

Canada's second-largest private mortgage insurer, AIG United Guaranty Canada, confirmed today that it supports the new policy provisions announced by the Department of Finance for loans that are default insured under the Government of Canada Guarantee.
"We view this as a prudent approach taken by the government to support the long-term health and sustainability of the Canadian housing market," said Andy Charles, president of AIG United Guaranty Canada. "We support this direction and will amend our product line-up to reflect the new policy set out by the Department of Finance, commencing October 15, 2008, for all government guarantee mortgage insured loans."
AIG United Guaranty Canada has established a strong presence in the Canadian mortgage market since beginning operations in November 2006. With a customer base of more than 30 lending partners, the company will continue to work with its partners and mortgage professionals to develop solutions for the Canadian housing market.
[source - http://www.newswire.ca/en/releases/archive/July2008/18/c5829.html]