Lenders’ mortgage insurer Genworth expects to beat prospectus forecasts this year as low interest rates and a strong housing market lift profitability.

The company forecasts an underlying profit of $250-$270 million for the calendar year after last week reporting a 14% increase in third-quarter profit to $64 million.

It had forecast a full-year profit of $231.1 million before floating on the Australian Securities Exchange in May.

The company earned gross written premium (GWP) of $157.5 million for the third quarter, up 5% on the corresponding period last year.

It predicts full-year GWP of $640-$650 million, compared with its prospectus forecast of $663.2 million.

Claims paid halved to $20.5 million in the quarter from $40.7 million, and Genworth says there is little evidence of lending standards deteriorating.

The combined operating ratio for the quarter was 47.8%, compared with 30.6% in the corresponding period last year.

Meanwhile, Standard & Poor’s has downgraded Genworth’s insurer financial strength rating to A+ with a negative outlook from AA- with a stable outlook, because of a downgrade on Genworth Life Insurance in the US.

Genworth Australia is a subsidiary of Genworth Life, so its ratings are affected by developments in US life operations.