Standard & Poor’s (S&P) has conferred AA- financial strength and issuer credit ratings on Genworth Australia, predicting a stable outlook.

S&P credit analyst Lucy Huynh says the mortgage insurer’s claims experience “should continue to normalise”, with improving loss ratios quarter on quarter.

“In our opinion, there is evidence of delinquency rates stabilising for Genworth Australia’s coastal Queensland, 2007 and 2008, and self-employed books, which have been sources of ongoing stress on the insurer’s claims frequency and severity,” she said.

Lower interest rates, households adapting to higher living costs and Genworth Australia’s “significant resources” are considered factors in the insurer’s capacity to “withstand a severe economic downturn”.

Ms Huynh says while Genworth Group’s core life insurance companies (classed A/stable) are the reference point for Genworth Australia’s ratings, a lowered rating on them “would not likely trigger an automatic downgrade of Genworth Australia, but would trigger a review of the ratings”.