Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
QBE flags ‘industry-wide downturn’ in LMI

QBE flags ‘industry-wide downturn’ in LMI

Australian insurance giant QBE has admitted that regulatory pressure on the banks to tighten mortgage lending has had a significant impact on new LMI business flows.

Announcing its half-year profit results yesterday, QBE noted that strong property price appreciation, particularly in NSW, has led the Reserve Bank and APRA to pressure the banks to tighten credit terms and conditions in the mortgage market, which has flowed through to significantly reduced new business flows in its lenders’ mortgage insurance business.

“We have revised our FY15 gross written premium expectations down by around five per cent or $200 million,” QBE’s chief executive of Australia & New Zealand operations Colin Fagen said.

Advertisement
Advertisement

“This is due to the delayed inception of the aforementioned new business opportunities, an industry-wide downturn in lenders’ mortgage insurance new business volumes, a slightly more competitive pricing landscape and a currency impact of close to $100 million due to the weaker Australian dollar.”

QBE posted a 24 per cent profit increase but recorded a 15 per cent fall in gross written premiums, reflecting the weaker Australia dollar.

“On a constant currency basis, gross written premium fell by only one per cent primarily due to a 20 per cent industry-driven decline in lenders’ mortgage insurance premium and the general softening of the market, particularly in strata-title insurance products.

“Excluding the lenders’ mortgage portfolio, premium income in our traditional markets increased by one per cent,” he said.

QBE flags ‘industry-wide downturn’ in LMI
mortgagebusiness

 

Latest News

The major bank has lowered its interest rate floor for mortgage serviceability assessments, becoming the third major bank to amend its polic...

A big four bank has announced the appointment of a new chief executive officer. ...

Digital neo-lender 86 400 has been granted a full authorised deposit-taking institution licence by APRA and expects to launch its mortgage ...

FROM THE WEB
podcast

LATEST PODCAST: A shift in serviceability requirements

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.