Helia Group says it will carry on in Australia even as gross written premium sits “well down on historic levels” and revenue has fallen.

The lenders’ mortgage insurer says GWP continues to be dented by the government’s 5% deposit scheme for first home buyers, which was expanded this month.

This will lead to a “material reduction” in premium for the entire LMI market, which will gradually affect insurance revenue, Helia said today.

The company is cutting costs, with recurring expenses down by $15 million so far and automation a focus in coming years.  

Third-quarter net profit after tax was $66.5 million, down from $75.7 million a year earlier.  

From January to September, insurance revenue fell to $274.9 million from $285.2 million in the year-earlier period.  

Helia – which expects full-year revenue of $350-$390 million – said in July it was undertaking a comprehensive business review that “thoroughly assessed alternatives” after losing top customers Commonwealth Bank and ING.

“The board is pleased to reaffirm Helia’s ongoing commitment to the Australian LMI market,” chair Leona Murphy said.

“Helia is focused on continuing to evolve to meet the changing market.”

The group had 51% of all LMI in-force in Australia at June 30, as measured by liabilities for remaining coverage. This gives it “important local scale” and helps offset high fixed expenses, Ms Murphy says.

Claims remain “extremely low” and there is “no sign of a reversal of the current benign claims environment”.

Helia’s GWP was $66.1 million in the third quarter, up from $50.4 million a year earlier as the volume of property lending in Australia rose.

Year-to-date GWP was $176 million, up from $135.6 million.

Helia Group warned in August its outlook remained tough. Its contract with Commonwealth Bank – which represented 40% of Helia’s first-half GWP – runs out at the end of December.

ING Bank also opted not to renew its contract, which expires on June 30 next year and accounted for 21% of GWP.

Pauline Blight-Johnston recently stood down after more than five years as CEO and MD, and former CFO Michael Cant stepped in as interim CEO.