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Helia GWP ‘soft’ on subdued home loan demand 

Helia Group, Australia’s largest provider of lenders’ mortgage insurance (LMI), says gross written premium (GWP) was $44.8 million in the third quarter, down from $68.5 million a year earlier. 

GWP was $141.4 million for the first nine months of 2023, down from $257.1 million a year ago.  

“GWP is substantially lower than the previous corresponding period and remained soft in the third quarter, reflecting subdued industry new loan commitments, especially for high LVR (loan-to-value) lending, and the impact of the Federal Government Home Guarantee Scheme,” Helia said. 

The scheme helps Australians purchase first homes with deposits as low as 5% and removes a requirement to take LMI, which is normally required when deposits are less than 20% of a property’s purchase price.  

The LMI leader says total claims incurred were -$13.7 million in July-September and -$54.4 million for January-September. The negative outcome was caused by a reduction in reserves due to fewer delinquencies, and lower claims paid, it said. 

“Total incurred claims remained negative, caused by low levels of paid claims combined with a reduction in the liability for incurred claims, arising from low levels of delinquencies, minimal ageing of delinquencies and high levels of policy cancellations.”  

Over the next 15 months, Helia expects total incurred claims to increase toward long term average levels. Mortgage delinquencies will respond to expected modest increases in unemployment and higher interest rates which may also impact dwelling values, it says. 

Helia says its third quarter insurance service result was $89.2 million, and quarterly net profit was $63.7 million, up from $54.8 million in the third quarter last year.  

Quarterly revenue was $111.8 million, taking the nine-month total to $331.6 million. Helia reaffirmed its guidance for $420-460 million annual revenue.  

Great Southern Bank signed as an exclusive customer earlier this year. Helia says there were no contract renewals or new clients during July-September.