Bond insurance market maintains stability: Fitch

In a new report on bond insurers, Fitch Ratings says the market is stable, owing to its predictable earnings stream and ultra-conservative risk profile, as well as its high levels of excess capital. Nonetheless, pressures exist to grow business and competition is heating up in the sector. There has also been a shift towards insuring less commoditized structured finance products and international obligations, particularly amongst newer market entrants. Performance has also varied by sector, with sectors such as manufactured housing securitizations performing badly, as well as collateralized debt obligations, aircraft exposures and subprime home equity and credit card obligations. A downturn in the economy could create further havoc in these lines.
Among the rated financial guarantors are ACA Financial Guaranty, Ambac Assurance, CIFG, FGIC, Financial Security, MBIA, Radian and XL Capital Assurance. In the reinsurance segment, Assured Guaranty Re (AGRI) and XL Financial Assurance are the rated players cited by Fitch.