Genworth Australia rebounds after $107.6m loss

Genworth Mortgage Insurance Australia has returned to an annual profit, reporting a net profit after tax of $192.8 million for the 12 months through December 2021, compared to the $107.6m net loss it reported just a year ago, after a highly disruptive pandemic period.

The success of 2021 was largely driven by a strong underwriting result of $295.8 million, aided by Genworth’s prioritisation of lender customer borrower experience, digitalisation and agile ways of working to reduce risk and improve efficiency.

Directors declared a final ordinary dividend of 12 cents per share (cps) and special dividend of 12 cps. Genworth did not declare dividends last year, MarketWatch reported.

“Genworth has delivered a strong full year profit result. Underlying premium volumes grew and underwriting quality was good. This was accompanied with an unusually favourable claims environment driven by high dwelling-value price growth, falling delinquencies, and low numbers of mortgages in possession,” said chief executive Pauline Blight-Johnston.

   

Genworth is expecting slowing levels of new housing credit in 2022, with net earned premium (NEP) expected to be within a range of $315 million to $375 million.

For 2021, its NEP was $370.5 million, up 19% from the previous year. Meanwhile, its gross written premium (GWP) for 2021 was $549.6 million, down 2.2% from $561.7 million in 2020.

In a bulletin released earlier today, S&P Global Ratings noted that Genworth’s FY21 results proved the insurer had ‘re-established its strong financial foundations’ after the COVID-19-induced troubles it faced the prior year. S&P predicted that Genworth would maintain its solid operating performance in FY22 and its ‘market dominance in the Australia lenders mortgage insurance sector.’

Genworth Australia currently enjoys an A rating and stable outlook from S&P.