Genworth finalises new CBA contract

14 November 2022

Genworth Mortgage lnsurance Australia has finalised contractual terms with the Commonwealth Bank of Australia (CBA) for the exclusive provision of Lenders Mortgage Insurance (LMI) for CBA’s residential home loan customers.

Under the three-year contract, which starts in January, CBA will insure a minimum of half new high loan to value ratio (LVR) residential mortgage loans with Genworth. The insurer says that is similar to the proportion it currently receives.

CBA agreed to renew its exclusive agreement for LMI earlier this year after requiring Genworth to submit a new proposal. CBA is Genworth’s biggest customer, worth around $320 million a year. Held since 2006, the exclusive arrangement has in the past automatically rolled over.

A year ago, NAB ended its LMI relationship – worth around 12% of Genworth’s GWP – and switched to an exclusive deal with QBE. Westpac stopped doing business with Genworth in 2015.

Genworth has agreements with over 50 lender customers across Australia, including major and regional banks, building societies, credit unions and nonbank mortgage originators. It has forecast that net claims incurred will not exceed $25 million this year.