Genworth Mortgage Insurance Australia says gross written premium (GWP) fell 24.8% last year, and it warns of further deterioration this year in a difficult business environment.

GWP dropped to $381.9 million as greater lender caution and regulatory oversight reduced revenue from the high loan to value ratio (LVR) market.

The slide also reflects changes in customers the previous year.

Increased mortgage delinquencies in regions hit by the mining boom’s end contributed to a 10.9% slide in net profit to $203.1 million.

Genworth renewed a contract with Commonwealth Bank last year but warns its second-largest customer is this year considering alternatives to traditional lenders’ mortgage insurance, particularly for its less than 80% LVR portfolio.

The insurer says it is engaging with current and potential customers about lenders’ mortgage cover and other risk management solutions, and will pursue new agreements this year.

“Overall the company expects GWP… to be below 2016 levels, down between 10% and 15%, subject to the timing and extent of any changes in the customer portfolio,” Genworth said.

CEO Georgette Nicholas says Genworth’s profitability is strong and its business model resilient.

“We are focused on improving our underwriting efficiency, enhancing our product offerings and, where appropriate, leveraging our data and partnerships along the mortgage value chain,” she said.

The combined operating ratio deteriorated to 64.3% in the second half of last year, compared with 57.3% in the first half. Genworth estimates it had about 34% of the lenders’ mortgage insurance market last year, by new insurance written.