Genworth Mortgage Insurance Australia’s shares have slumped more than 20% to $3.305 after it announced the loss of a major contract.

Westpac has given 90 days notice to terminate its agreement with Genworth to provide lenders’ mortgage insurance.

The Westpac business represented 9.5% of Genworth’s new insurance written and 14% of gross written premium last year.

Moody’s affirmed Genworth’s A3 insurance financial strength rating, as the termination of the deal is unlikely to have an immediate financial impact, but revised its outlook to negative from stable.

The outlook change “reflects the growing long-term challenges facing the Australian mortgage insurance industry, which, if continued, could undermine the company’s credit profile in 2016 and beyond”.

Standard & Poor’s affirmed the company’s financial strength and issuer credit ratings at A+ and altered the outlook to developing from negative, reflecting statements from Genworth US about evaluating strategic options in Australia.