Genworth Mortgage Insurance Australia 1H Net Profit A$18.9 Million, Down 68% on Year

By David Winning and Alice Uribe

SYDNEY–Genworth Mortgage Insurance Australia Ltd. said it would seek to buy back shares worth up to 100 million Australian dollars (US$69.2 million), as it adjusts to a deterioration in its operating environment.

Details of the buyback were unveiled alongside a 68% drop in net profit to A$18.9 million in the six months through June, from A$59.4 million a year ago. On an underlying basis, Genworth made a profit of A$134.3 million compared to A$76.4 million a year earlier.

“Underlying net profit was well up on the prior period, driven by a strong underwriting result due to higher earned premium and negative net claims incurred,” said Chief Executive Pauline Blight-Johnston. “While rising bond yields have caused short-term mark to market investment losses, increased bond yields are positive for future profitability.”

Directors of the company declared a A$0.12-per-share interim dividend, up from a payout of A$0.05 at the corresponding stage of 2021.

Gross written premium was down 35% at A$188.6 million, while it recorded an underwriting result of A$172.5 million, up from A$87.7 million a year earlier.

Genworth said rising interest rates were contributing to falls in house prices, which could worsen in the months ahead. The company expects gross written premium over 2022 as a whole to remain below levels of the previous year.

“Despite slowing gross written premium, FY 2022 net earned premium is expected to remain strong, reflecting the high level of cancellations in 1H which are expected to reduce to longer-term averages in 2H,” Genworth said.

It forecast annual net earned premium to be within a range of A$375 million-A$435 million, representing an upgrade on earlier guidance for A$315 million-A$375 million.

Write to David Winning at [email protected]

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