Genworth maintains forecast as housing market eases
Lenders’ mortgage insurer (LMI) Genworth has maintained its earnings outlook amid signs of a softening housing market, as it pursues a strategy to widen its risk management offering.
CEO Georgette Nicholas told the annual general meeting Australian house price growth is expected to ease further this year and potential regulatory measures may affect overall credit growth.
The company is monitoring signs of a softening in mortgage “cure rates” that emerged in the first quarter, but says the Australian economy overall is expected to continue performing well.
“The guidance we provided for [this year] remains unchanged,” Ms Nicholas said.
Genworth is broadening its risk management offering as it adapts to technological advances and regulatory change affecting borrowers and lenders. It is also seeking new traditional LMI agreements, and says the business is in a transitionary period.
“Given the market, lenders are looking for opportunities to grow their business,” Ms Nicholas said.
“We have been working proactively and will continue over the course of [the year], to work with our customers to help identify areas of growth.”
Genworth estimates it held about 25% of the Australian LMI market by new insurance written last year.
Its top three customers accounted for about 60% of company new insurance written and 73% of its gross written premium.
The annual general meeting also approved plans for a $100 million share buyback.