Arch Capital Group is the rising titan of the Australian capital market, and jostling for claims as risk decision-maker-in-chief in a hyperventilating mortgage market. Westpac and Macquarie Bank are the two banks offloading loss risks on home loans to Arch. The latter is a new user, while Westpac pioneered the industry embrace of Arch more than a year earlier.National Australia Bank may well be looking at Arch as a replacement provider. The bank affirmed on Friday it had issued an RFP as it scouts the merit of a reinsurer panel to supply mortgage insurance, replacing the incumbent Genworth. The move is more or less a copy of Westpac's and Macquarie's initiatives and invites smaller banks to assess options.But the NAB relationship may be one Genworth stands a chance of saving, as Arch could be distracted from making an optimum pitch on NAB's RFP. The company's capability is now being tested serving the new business flow from Macquarie Bank, and there are suggestions it's putting a priority on driving productivity and profits from its present contracts.Using each of its two customers' shares of the underlying mortgage market as a guide, Arch has waltzed to the vicinity of 25 per cent market share of LMI in Australia in short order, disrupting a provider set previously confined to only two names: Genworth and QBE LMI. MGIC Radian, a no-hope LMI challenger backed during the 2000s by two US insurance names with experience in the sector, pulled stumps and diverted to run-off mode years ago. That outfit attracted an inconsequential level of business, in contrast to the showy ease of the entry of Arch.Arch's Australian entry has also elbowed out established reinsurance names that responded to Macquarie's request for an alternative to Genworth.Greg Ward, Macquarie Bank's head of banking and financial services, on Friday said the bank was moving its business to a "panel of offshore reinsurers" and demurred when Banking Day put it to him that Arch was the principle - and maybe only - insurer involved in any "panel". As with Westpac, Macquarie will hold a co-insurance stake in the pool of protected mortgages.A US funded and managed insurance entity, Arch brings US$5.6 billion in capital (at the group level) and a youthful 22 year history to underpinning the niche that is lenders' mortgage insurance. LMI is the loss backstop relied on by banks and non-banks to contain losses on their mortgage portfolios, a segment with a long history of low losses on average, yet dotted by episodes of stress and underwriting losses for the insurer.Arch is in the course of finalising registration in Australia as an insurer - a process going slower than it hoped, while APRA prolongs its assessment. Arch's reporting on its experience of underwriting Westpac's loans is rolled up with the rest of the group's mortgage segment, centred on the US market. Its Australian excursion will be one of many drivers behind the trebling in gross premiums (to US$348 million) written for Arch over the March 2017 quarter,