Genworth Mortgage Insurance Australia says net profit dropped 28.7% to $46.7 million in the third quarter, as loan delinquencies in mining states hit performance.

Gross written premium (GWP) fell 25.8% to $92.5 million in the three months to September 30, while the loss ratio increased to 45.3% from 33.5% in the corresponding period last year.

“Queensland and WA continue to have elevated delinquency development from economic pressure, in particular in mining-related regions,” CEO and MD Georgette Nicholas said.

Overall, the high loan-to-value ratio (LVR) market is down, and the mix of business in lower LVR bands is pressuring GWP, according to the company.

Market strength in NSW and Victoria remains positive but regions exposed to the resources slump are showing higher levels of mortgage stress, compared with positive trends in recent years.

“Underemployment is also affecting these areas,” the insurer said. “Genworth expects the elevated number of delinquencies in these regions to continue.”

The delinquency rate in WA was 0.69%, compared with 0.32% in NSW.

Investment income of $36.3 million in the three months included an end-of-quarter valuation loss of $900,000.

For the nine months to September 30, GWP fell 31.2% while reported net profit grew 2.3% to $182.6 million.

Net earned premium is likely to fall about 5% for the full year, while the loss ratio is forecast at about 35%.

Genworth also announced it has renewed its contract as the exclusive provider of lenders’ mortgage cover to Commonwealth Bank from January to December 31 2019.

The contract represented 43% of Genworth’s gross written premium in the half-year to June 30.

Genworth will exclusively provide lenders’ mortgage insurance to the bank on a minimum specified percentage of new residential loans with high loan-to-valuation ratios.