Genworth Mortgage Insurance expects a contract renewal decision from the Commonwealth Bank, its biggest customer, by the end of the year.

Last month, Genworth revealed it must submit a new proposal to the Commonwealth Bank ahead of the expiry of an exclusive Lenders Mortgage Insurance (LMI) supply agreement, which is worth around $320 million a year, at the end of 2022.

The Commonwealth Bank contract, which made up 57% of Genworth’s $561.7 million gross written premium (GWP) last year, has been held by Genworth since 2006 and in the past has automatically rolled over every few years.

CEO and MD Pauline Blight-Johnston said during an investor briefing last week the matter should be resolved by the end of the year.

“We expect it to play out over the second half of the year and we will update you as we know more,” she said.

NAB ended its LMI relationship – worth around 12% of Genworth’s GWP – in November, moving to an exclusive deal with QBE. Westpac stopped doing business with Genworth in 2015.

Genworth posted an underwriting profit of $88 million in the first half, up from $53 million a year earlier. Mortgage repayment deferrals, customer repossession moratoriums and a 12% rise in national home values all boosted Genworth’s performance.

Australia’s leading provider of lenders mortgage insurance (LMI) saw its gross written premium (GWP) surge 21% to $289.7 million in the first six months of the year. Its adjusted combined ratio, which excludes a large write down, was 62.5% in the first half, compared with 102.6% a year ago.

Strong economic recovery led to lower than usual paid claims and Genworth’s net claims incurred plunged 51% from a year earlier to $49.3 million, with lower levels of new mortgage delinquencies producing a second quarter loss ratio of 15.8%.

“The latest round of borrower support programs will extend the duration of the subdued delinquency behaviour we have been experiencing, pushing out the timeframe over which we will obtain increased clarity regarding ultimate claims outcomes,” Ms Blight-Johnston said.