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.

“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 logo

Latest News

Over 40 million shares will be issued to an aggregator’s shareholders, following Treasurer Josh Frydenberg’s approval of its merger with...

Australians with black marks on their credit report would not have to continue being disadvantaged due to past financial hardships under the...

There has been a “controlled” slowdown in housing market conditions, which has been “mild” in comparison to previous downturns, Cor...

FROM THE WEB

podcast

LATEST PODCAST: Upheaval at the major banks

Is enough being done to ensure responsible lending?