Calliden will cease writing builders’ warranty insurance (BWI) for licensed builders in Victoria from the end of the year.

Group Executive for Calliden Agency Services, Mike Hooton, told insuranceNEWS.com.au “it is just not sustainable” to continue in the BWI market as a private insurer.

The move will leave QBE, which is underwritten by the Victorian Managed Insurance Authority (VMIA), as the sole BWI insurer in the state.

Calliden will continue to underwrite and distribute owner-builder policies through Australian Owner Builders Insurance Services.

“The performance is better for owner-builders [because] the exposure is much smaller,” Mr Hooton said.

“There has been a deterioration in results for the larger licensed builders. We got to a point where we had to decide what we were going to do in 2014.”

Calliden says claims developments, along with uncertainty associated with the Victorian Government’s domestic building consumer protection reform strategy, contributed to the decision.

It has pursued the possibility of operating as agent on behalf of VMIA but says “there is no immediate likelihood of this occurring”.

BWI arrangements in other states – Calliden acts as an agent of Sicorp in NSW and has a reinsurance arrangement with the SA government – remain in force.

“As an agent we can provide added value,” Mr Hooton told insuranceNEWS.com.au. “We are very good at it and that is the role we want to play.”

In 2010 Calliden announced it was withdrawing from the BWI market in Victoria, only to reverse that decision early the following year.