Vero is scaling back its home warranty insurance operations, citing record low levels of investment in residential construction.

The former independent Vero Warranty unit has been rehoused in the insurer’s construction and engineering division. It’s understood several executives in the warranty unit will leave the company.  

“Despite the constant misreporting that there are obscene profits to be made through the home warranty insurance product, Warranty is not meeting the required income levels to sustain its position as a separate business unit within Vero,” a Vero spokesman said.

With no significant improvement within residential construction expected for at least two years, the unit will be reshaped “to a size that is appropriate to the income received”.

“Vero will continue to underwrite home warranty insurance,” she said.

The insurer is the major provider of home warranty insurance in NSW, Victoria, WA, SA, Tasmania and the ACT.

The mandatory policy is currently under review by a Senate inquiry, having faced criticism from consumer and building industry advocates.