Helia Group says its insurance revenue fell 5% to $371.5 million in a “year of material change” for the lenders’ mortgage insurance industry.

This year, it forecasts insurance revenue will be $320-$370 million.

Helia’s gross written premium rose 23% to $240 million last year, lifted by a now-expired contract with the nation’s largest mortgage lender, CBA, that contributed $105 million.

The fallout from no longer having new CBA borrowers as customers “will occur progressively on insurance revenue”.  

Helia also recently lost ING as a customer, and GWP has been dented by the expanded government home guarantee scheme, which eliminates the need for low-deposit first-time buyers to have LMI.

First home buyers made up 27% of Helia’s GWP last year, but the scheme expansion will “remove the majority” from the LMI market.

Helia will focus on growth in other areas such as upgraders and investors, and will increase automation to lower costs.

Interim CEO Michael Cant says the insurer “delivered a strong financial and operational performance” in the face of increased self-insurance by mortgage lenders in a benign credit environment.

Helia's total incurred claims ratio is expected to remain well below average this year after the number of closing delinquencies fell 15% to 4309 last year, helped by a 9% rise in national property values that provided “a helpful equity buffer for borrowers”.

“The economic environment was favourable for claims but market conditions remained challenging for LMI industry new business. LMI market GWP ... remains below historical levels,” Helia said.