Gross written premium (GWP) at Genworth Mortgage Insurance jumped almost a third to $561.7 million last year and the lenders mortgage insurance (LMI) heavyweight says it is ready for an expected surge in claims this year as stimulus support measures taper off.

New insurance written rose 18% in 2020 to $31.6 billion and excluding a large write-down, Genworth’s combined operating ratio was 72.4% in the fourth quarter.

“Genworth remains in a strong capital position, able to withstand a wide range of future claims outcomes,” CEO and MD Pauline Blight-Johnston said.

Genworth’s earnings took a hit from delinquency reserving of $109.1 million and a large $181.8 million writedown. That sent it to a full-year underwriting loss of $234 million.

The company expects “sustained pressure on claims throughout 2021,” as assistance such as JobKeeper and mortgage deferrals granted by lenders taper off this year, leaving many homebuyers with loans exposed and poised to make claims.

The 2020 support packages “interrupted the typical incidence patterns of delinquencies and claims,” Genworth says.

Genworth paid 1254 claims last year worth $120.8 million. Net claims incurred came to $289.8 million against net earned premium of $312 million.

At the end of last year, most borrowers on repayment deferral arrangements had either opted out or had their loans restructured, though the reported delinquency rate still increased as a result of higher policy cancellations.

Genworth says its strong LMI volume flow growth - the main driver of its GWP growth - reflects low interest rates. New insurance written increased as owner occupiers and first-home buyers underpinned the national housing market.

New business underwriting quality remained strong, it says, as Genworth and banks applied greater scrutiny.