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UPDATE 1-Australia's Genworth 3rd-qtr net profit slumps
November 2, 2017 / 10:56 PM / a month ago

UPDATE 1-Australia's Genworth 3rd-qtr net profit slumps

(Adds quote, full-year outlook)

SYDNEY, Nov 3 (Reuters) - Australian home loan insurer Genworth Mortgage Insurance Australia Ltd said on Friday third-quarter net profit fell more than 31 percent as new insurances written during the period dipped.

Net profit was A$32.1 million ($24.8 million) for the three months to Sept. 30 from A$46.7 million a year ago.

Australia’s biggest mortgage insurer said its new business volume, measured by new insurance policies, dropped to A$5.5 billion from A$6.1 billion, while net earned premiums for the quarter was A$100.1 million, compared with A$115.9 million last year.

Net earned premiums slid 13.6 percent, driving up its expense ratio during the quarter, and the company warned that net earned premiums would be down between 10 percent and 15 percent in the full year.

“Labour market dynamics are perpetuating the instance of mortgage stress in certain regional economies and Genworth expects elevated mortgage delinquencies in these regions for the remainder of 2017,” the company said in a statement.

“House price growth continues to moderate following regulatory measures to slow the growth in investment lending and limit the flow of new interest-only lending,” it said.

Australian regulators have pushed banks to tighten mortgage lending standards on worries a debt-fuelled bubble and bust in the property market could destabilise the financial system and hurt the broader economy.

Genworth said its loss ratio, the ratio between premiums its customers pay and claims it pays out, fell about 8 percentage points to 37 percent during the quarter.

It revised its loss ratio target for the full year to between 35 percent and 40 percent, from an earlier forecast of between 40 and 50 percent in August.

$1 = 1.2962 Australian dollars Reporting by Christina Martin in Bengaluru; Editing by Byron Kaye, Alison Williams, Toni Reinhold

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