Genworth Mortgage Insurance Australia says it will continue to “redefine” its business model after net profit dived 26.5% to $149.2 million last year.

Profits were hit by a 10.2% fall in new written insurance to $23.9 billion, and a 3.4% drop in gross written premium to $369 million.

“Early [last year] we commenced a strategic program of work to redefine our core business model and position Genworth as the leading provider of customer-focused capital and risk management solutions,” CEO Georgette Nicholas said.

“[This year] will be a transitionary year for our business as we continue to implement initiatives pursuant to our strategic program of work.

“We are focused on enhancing our existing lenders’ mortgage insurance business and growing our business by leveraging our core competencies to offer a broader suite of complementary capital and risk management solutions for customers.”

The loss ratio deteriorated to 38.3% last year from 35.1% and the combined operating ratio worsened to 67.5% from 60.8%.

Genworth says the results reflect lower sales and revenues, plus higher costs as the expense ratio moved to 29.3% from 25.7%.

In its outlook for this year, Genworth expects the economy to perform below the long-term trend and the official cash rate to stay at current levels.

“Housing market conditions are expected to ease further as macro-prudential measures continue to take effect and record levels of new housing supply comes onto the market.

“Genworth expects national housing prices to be flat.”