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In an ASX update last week, Genworth CEO and managing director Ellie Comerford noted that the amount of new business the LMI group wrote in the first quarter of 2015 was down by approximately 17 per cent compared to the previous period.
Ms Comerford said the decline is a reflection of a combination of risk appetite settings, the industry-wide reduction in high LVR lending in certain segments and tightened lender risk appetite with more focused regulatory oversight in the Australian mortgage market.
“Our normalised loss ratio of 25.3 per cent in the first quarter is consistent with our guidance of between 25 per cent – 30 per cent for the full year 2015,” she said.
“We have a strong, stable balance sheet with $1.36 billion of unearned premium reserve (UPR) and we had an estimated regulatory capital solvency ratio of 163 per cent on a level 2 basis at the end of the quarter.”
However, for the 2014 financial year Genworth reported an underlying net profit after tax of $279.4 million, an increase of 26.5 per cent compared to 2013.
New business volumes of $36.2 billion of new insurance written (NIW) increased two per cent, while gross written premium (GWP) of $634.2 million for the full year was six per cent higher than 2013.
“This growth was a combination of both price increases and higher volume, which was offset by an ongoing trend toward an overall lower average LVR mix of mortgages being originated, particularly in the over 90 per cent LVR segment,” Ms Comerford said.
Total pro forma revenue, as measured by net earned premium (NEP) was $445.8 million, representing an increase of 12 per cent compared to the full year 2013, she noted.