qbe buys pmi

This is a great move IMO.

I know a bit about the industry from a previous life - PMI really only has Genworth (who are an ex-GE subsidiary) as a direct competitor in Australia. Some lenders self-insure their mortgage book.

I'll read more tonight, but at first glance:

1. Aus is very different to the US. Here premiums are paid upfront, not ongoing.

2. The 'insured' portion is really the difference between the loan amount and the liquidated asset sale price if the borrower defaults.

3. It looks to be accretive in year 1.

4. The promisary note seems to minimise some risk in the event of an economic downturn. Need to look more into this but it appears to be well thought out.

It'll be interesting to see how the market reacts to this in the morning...