Helia Group says its total incurred claims will again be negative in the first half due to continuation of an unusually low claims environment on low levels of mortgage delinquencies, prompting changes to its reserving basis. 

Helia is Australia’s top provider of lenders mortgage insurance (LMI) and was formerly known as Genworth Mortgage Insurance Australia.  

First-half total incurred claims are expected to be within a range of negative $30 million to negative $45 million due to low levels of claims and delinquencies continuing into April, May and June, it says. Helia says a negative total incurred claims outcome is caused by “a reduction in the liability for incurred claims from low levels of delinquencies and changes to the reserving basis”. 

Last year, Helia’s closing delinquencies were down 22% at just 4569 – the lowest level since it listed on the ASX in 2014, reflecting savings accumulated during the covid pandemic, a strong labour market and low interest rates in the first half. 

For the rest of 2023, Helia expects total incurred claims to start to increase toward long term average levels as delinquencies respond to expected modest increases in unemployment and higher interest rates. 

“The timing of delinquencies will be driven by the economic environment, borrower finances and lender hardship solutions,” Helia said in an update. 

 Shares in Helia, which will announce its finalised first-half results on August 22, have gained 10% over the past month.