Genworth cashes in on market rebound

Genworth Mortgage Insurance Australia Ltd has released its full-year 2019 results, which reported a 60 per cent year-on-year increase in statutory net profit after tax (NPAT) to $120.1 million, up from $75.7 million in FY18.

This includes an after-tax unrealised gain of $24.6 million on investment portfolio and a 20.3 per cent increase in new insurance written (from $22.2 billion to $26.7 billion).

In its release to the ASX, the LMI-provider noted that the rebound in property prices experienced in the last quarter of 2019 resulted in a higher volume of demand.

While overall gross written premium (GWP) fell by 5.9 per cent year-on-year in FY19, Genworth claimed the month of December was its “highest monthly GWP” result for the year, “reflecting on improved home buyer confidences and affordability”.

Commenting on the results, Genworth acting chief executive officer and director Duncan West again reflected on the positive impact that the improved housing market had on the company’s full-year results.

“Our FY19 financial performance reflects that our core business continues to perform well and in line with our full-year guidance,” Mr West said.

“Our result reflects more favourable market conditions providing an impetus to housing market activity especially in 2H19, with gross written premium increasing 28.9 per cent compared with 2H18.

“We also continued to see a recovery in consumer confidence in the housing market across all major capital cities, except Perth.”

Mr West also cited the “above market growth” of some of its lender customers as one of the contributing factors to Genworth’s improved business performance, bringing particular attention to the renewal of its “supply and service” contract with Commonwealth Bank in January.

Recent data from the Australian Prudential Regulation Authority found that CBA’s total portfolio grew by $6.4 billion in the three months to December 2019.

“We take pride in our strong and longstanding relationships with the major and regional banks, building societies, credit unions and non-bank mortgage originators,” Mr West said.

New CEO appointed

It has also been announced that the board of directors has appointed Pauline Blight-Johnston as Genworth’s new chief executive officer and managing director, commencing 2 March 2020.

Ms Blight-Johnston has over 25 years of experience in life insurance and wealth management at a range of professional and financial firms, including KPMG Australia, Challenger Ltd and AMP Ltd.

According to Genworth, Ms Blight-Johnston will bring a “strong financial and actuarial acumen” as well as “proven capabilities driving strategy and leading people” with her into the new chief executive role.

Acting CEO Duncan West, who has been in the role on an interim basis following the retirement of Georgette Nicholas on 31 December 2019, will continue to serve as an independent non-executive director of Genworth following the appointment of Ms Blight-Johnston.

Genworth chairman Ian MacDonald thanked Mr West for his service on behalf of the board and stated he was “delighted” to have someone with Ms Blight-Johnston’s experience on board as the new CEO and managing director.

Commenting on her appointment, Ms Blight-Jonston stated that Genworth plays an “important role” in delivering home ownership to Australians sooner.

“I look forward to delivering long-term value to shareholders by executing on Genworth’s strategic plan and embedding Genworth as the leading provider of customer-focused risk and capital management solutions in the Australian residential mortgage market,” Ms Blight-Johnston concluded.

[Related: Genworth renews CBA contract]