Genworth Mortgage Insurance Australia may buy back up to 125 million shares after gaining approval to do so at the annual general meeting last week.

Chairman Ian MacDonald says the company’s financial position remains strong and regulatory capital levels are above the board’s target range, leaving it well placed to consider an on-market buyback.

Genworth affirmed its guidance for net earned premium to decline by about 10-15% this year and forecast a full-year loss ratio of 40-50% amid increased mortgage stress in some markets and regulatory actions.

“Genworth is supportive of regulatory measures that promote prudent residential mortgage lending standards,” CEO Georgette Nicholas said.

“The challenge is that all markets are not the same and there is not one solution for all.”

The company says house price growth is likely to moderate this year following regulatory steps to slow investor lending and limit the flow of new interest-only loans.

In an update on its diversity policy, Genworth says women comprise one-third of its board, putting it ahead of a target for 30% by the end of next year.