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QBE beats out Genworth in NAB tender for LMI deal

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QBE has won a tender to provide Lenders Mortgage Insurance (LMI) to the home loan customers of National Australia Bank (NAB), securing the business previously held by Genworth.

NAB says it won’t renew its LMI contract with Genworth – which last year was worth 12% of its annual gross written product or $52 million – after it expires on November 20.

Genworth CEO Pauline Blight-Johnston says her team is disappointed with the outcom after the company “presented a strong offer that reflected the risk of the portfolio while maintaining adequate returns on equity for our shareholders”.

Genworth renewed its largest customer CBA in January for a further three years and has relationships with more than 100 lenders across Australia. It says it also recently secured an exclusive LMI relationship with a non-major bank, renewed for three years from April 2020, and an extension with a mutual lender on an exclusive basis for three years from April.

Earlier this year NAB decided to move forward with only one LMI provider as part of a wider effort to simplify its core home lending business.

It put a request for proposals out for tender in February, from which QBE was selected as the bank’s exclusive mortgage insurance provider.

NAB says it will continue to work with Genworth to manage and support existing LMI customers.

“Genworth and QBE have been great partners with us for many years and this was a difficult decision given the strong value of their service to NAB and our customers,” a spokesman said.