Genworth Mortgage Insurance Australia has urged caution for this year, despite exceeding profit expectations since floating last May.

Net profit after tax for last year was $324.1 million, up more than 80% on 2013.

Gross written premium increased 6.3% to $634.2 million, and the combined operating ratio improved to 45.5%.

New business written was up 2.3%, with a trend towards lower loan-to-value ratios.

The loss ratio fell to 19% from 32.1%, reflecting a strong housing market resulting in lower levels of delinquent loans.

CEO and MD Ellie Comerford says the result represents “excellent progress”, but she warns there is room for caution regarding the uncertain unemployment outlook.

“While interest rates have now been lowered to add some further support to the economy, we continue to focus on our role in ensuring sound lending practices across the mortgage industry,” she said.

Genworth says house price appreciation is expected to continue this year, but slow to about 3.5% annually.

The company estimates it has 44% of the Australian lenders’ mortgage insurance market, and reports have speculated the US parent company may sell down more of its 66% holding.

A Genworth spokesman told insuranceNEWS.com.au: “It’s a rumour. We have no comment.”

Investment researcher Morningstar has increased its fair-value estimate for Genworth to $4 from $3.50 after a result that “ticks all the right boxes”.

However, it warns the current sweet spot “won’t go on forever”, with house price appreciation unlikely to be as beneficial in the future.