Australia’s largest provider of lenders’ mortgage insurance, Helia Group, says gross written premium (GWP) fell 42% to $185.2 million last year.

Insurance revenue was down 9% to $427.3 million as GWP was hit by a low number of new home loan commitments, particularly those above the 80% loan to value ratio that triggers a lenders’ mortgage insurance requirement.

“The combination of rising dwelling values and higher interest rates has continued to make it challenging for prospective homebuyers to save for a deposit,” Helia said.

The Federal Government’s Home Guarantee Scheme, which helps people buy first homes with deposits as low as 5% and removes the requirement for lenders’ mortgage insurance, also had an impact.

CEO and MD Pauline Blight-Johnston says a low claims environment and higher net investment lifted earnings.

“Despite rising interest rates, there have only been modest increases in industry mortgage arrears to date,” she said.

Claims incurred rose 7% to $64.6 million. New delinquencies grew 2% but remained well below historical levels.

Helia’s net profit rose 37% to $275.1 million last year on the “very favourable” claims experience.

“Incurred claims from the current period remain light. New and closing delinquencies remain at low levels. Policies in negative equity remain at an historic low of 1%.”

Helia has forecast insurance revenue of $360-$440 million this year.