Genworth boosted by mortgage insurance results

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6 August 2012

Leading mortgage insurer Genworth Financial Inc has posted a second-quarter profit despite some of its companies being placed on review last month by Moody’s for a possible downgrade.

Earlier this year Genworth shelved plans for a $US80 million ($76.4 million) initial public offering of 40% of the local company, with a decision on whether to proceed expected early next year.

Genworth Australia had a disappointing first quarter, which it attributed to the number and severity of claims in Queensland coastal areas that have been affected by natural catastrophes and regional economic slowdowns.

The Australian unit reported net operating income of $US44 million ($42 million), compared to $US54 million ($51.9 million) in the corresponding period last year and a net operating loss of $US21 million ($20 million) in the prior quarter. 

“Paid claims were higher in the current quarter, but in line with the first-quarter reserve strengthening expectations,” the company said in a statement.

However, the US parent company has reported improvements in its global mortgage insurance business for the second quarter, which has risen to an operating profit of $US51 million ($48.7 million), compared with a net operating loss of $US36 million ($34.4 million) in the prior quarter.