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Genworth profit rides local housing rise

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Genworth Mortgage Insurance Australia posted underlying net profit of $97 million in 2019, as favourable market conditions spurred housing market activity, especially in the second half when gross written premium (GWP) rose 29%.

December was the highest monthly GWP result for the year, reflecting improved home buyer confidence and affordability.

Acting CEO Duncan West says Genworth has witnessed a recovery in consumer confidence in the housing market across all major capital cities except Perth.

For 2020, Genworth forecast a full-year loss ratio of between 45% and 55%, compared with 50.6% in 2019. It expects net earned premium to come in within 5% of 2019’s $298.2 million, which represented a 6% rise on a year earlier.

Genworth expects positive momentum in 2020 amid an historically low cash rate, tax cuts, continued infrastructure investment, recovering metropolitan housing markets and a brighter outlook for the resources sector.

The company’s management expects house prices to continue to recover, led by strong growth in metropolitan Sydney and Melbourne, though the bushfires could have some negative impact on the economy after 2020.

KPMG Partner Pauline Blight-Johnston takes over as CEO and MD of Genworth on March 2. The top role was vacated when Georgette Nicholas returned to the US at the end of last year.

Mr West, who is also Chairman of Hollard Insurance, will continue to serve as an independent director.