Genworth Mortgage Insurance Australia says business conditions will remain under pressure amid tighter lending criteria, after first-quarter net profit fell 24.8% to $67.3 million.

The lenders’ mortgage insurer says gross written premium (GWP) fell 33.4% to $85 million and new business written dropped 13.9% to $6.2 billion.

The combined operating ratio blew out to 50.5% from 43.9%, while the loss ratio deteriorated to 27% from 25.3% – a reflection of increased loan delinquency.

“We continue to see pressure on [GWP] levels due to changes in the mortgage market, specifically a noticeable decline in the proportion of high-loan-to-value-ratio (LVR) loans originated and changes in lender risk appetite,” CEO Georgette Nicholas said.

“Given current market conditions, we remain focused on maintaining our risk management discipline.”

Genworth maintains its previous full-year forecast for a 20% drop in GWP and loss ratio of 25-35%.

“The high LVR market continues to be constrained… Genworth expects house price appreciation to moderate [this year],” the company says.

Genworth says its has about 41% of the Australian lenders’ mortgage insurance market, based on new business written for the half-year to last June.