Australia’s largest provider of lenders’ mortgage insurance, Helia Group, says gross written premium rose 6% to $195.6 million last year.

July to December was the group’s best half for GWP in two years, driven by more new home loans being written above the 80% loan to value ratio, at which banks require borrowers to have LMI.

Insurance revenue fell 9% to $389.2 million last year, hurt by “less favourable premium influences”.

Helia says the federal government’s Home Guarantee Scheme is having a “material impact” on the LMI industry, and new business volumes remain subdued.

“Self-insurance by lenders and lending volume changes also affect GWP,” CEO and MD Pauline Blight-Johnston said. “We focus on winning market share and adjusting risk settings.”

The guarantee scheme helps people buy first homes with deposits as low as 5% and removes the requirement for LMI. It now represents 38% of lending that is either insured or government guaranteed.

“Helia continues to engage with government to highlight both the impact of existing policy and the opportunity to improve policy targeting,” the insurer said.

A steep rise in mortgage interest rates and cost-of-living pressures contributed to a modest increase in mortgage delinquencies – up 17% on a year earlier – but exits by property sale with no claim resulted in low payout levels.  

There were 7203 delinquencies in Helia’s portfolio and 166 claims, compared with 6151 delinquencies and 240 claims in 2023.

CFO Michael Kant says the “experience has been more positive than our assumptions” and Ms Blight-Johnston notes banks have been “more nuanced” in handling delinquencies.

The economy provided a “positive backdrop”, with healthy employment and national home values up about 5%. Negative equity remains low compared with historical levels.  

Helia's total incurred claims were negative $37.2 million, driven by a release of reserves and reflecting a $90 million benefit from changes to liabilities for prior incurred claims. That was due to property value appreciation, high levels of cancellations and property sales with no claim. Changes to the reserving basis added $32.9 million.  

Ms Blight-Johnston says Helia has defended its LMI market share and claims experience was “unusually low in both 2023 and 2024”.

The group forecasts insurance revenue of $310-$390 million this year and says the incurred claims ratio is expected to remain “well below Helia’s expectations of a through the cycle ratio of approximately 30%”.