Genworth Mortgage Insurance Australia Ltd has announced that it has renewed its supply and service contract with Commonwealth Bank (CBA), effective from 1 January 2020.
The contract ensures that Genworth will be the exclusive provider of lender’s mortgage insurance (LMI) for CBA for a “minimum specified percentage of new high LVR residential mortgage loans”.
The contract with CBA reportedly represented 53 per cent of gross written premium for Genworth in 1H19.
Commenting on the contract renewal, Georgette Nicholas, CEO and managing director of Genworth, said: “We are delighted that our longstanding relationship with CBA has been extended for another three years.
“The renewal is evidence of the broader demand by lenders for our risk and capital management solutions,” she said.
“Importantly, the agreement opens further opportunities to expand our relationship through continued investment in technology, product offerings and services that provide a better borrower experience.
“For our shareholders, the new CBA contract is on terms which meet our pricing return on equity profile and risk appetite.”
CBA’s executive general manager, home buying, Dan Huggins, said: “We look forward to continuing our longstanding relationship with Genworth.
“As a leading provider of risk and capital management solutions in residential mortgage markets, Genworth plays an important role in helping Commonwealth Bank meet the home buying needs of our customers.”
Genworth announces leadership changes
The contract renewal comes as Genworth confirmed that Georgette Nicholas will retire as CEO and managing director, as announced in May, as well as step down as a member of the board of directors, effective 31 December 2019.
The board has also announced that Duncan West, a current non-executive director at Genworth, will serve as acting CEO effective 1 January 2020 until a permanent appointment is made.
Ms Nicholas will reportedly remain with Genworth until the end of March 2020 to oversee the transition period.
Genworth chairman Ian MacDonald said: “The board has asked Duncan West to step in as acting CEO for this transition period while the board continues its search for a permanent CEO and managing director.
“Duncan’s experience in previous senior executive roles at various insurance companies in Australia and overseas will be valuable in leading Genworth.”
Mr West said he felt privileged to be asked to serve as acting CEO while the search for a permanent replacement continues.
“As a director, I am familiar with Genworth’s strategy and priorities and look forward to continuing to progress these and ensure a successful transition to a new CEO,” Mr West said.
Ms Nicholas said: “I am confident that Duncan, as acting CEO, will continue to build on the momentum of the strategic program of work and advance Genworth’s purpose of helping Australians realise the dream of home ownership.”
Mr MacDonald thanked Ms Nicholas on behalf of the board, and acknowledged her contribution to the company.
“Georgette has left Genworth in a strong position to compete and grow over the next phase of our strategic journey,” he said.
“She has led significant cultural change within the business resulting in a diverse and highly engaged workforce.
“We thank her for her commitment to the company over the past five years and the investment she has made in positioning Genworth for future success.”
[Related: Bank CEO to step down]