Helia shares rise despite 'unusually low' number of claims
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The news: Shares in Helia Group rose on the ASX despite the mortgage insurance provider flagging an "unusually low" number of insurance claims in the six months to June.
The numbers: Helia shares were up 2.3% to $4.04 by 2:15pm AEST.
The company reported half-year statutory net profit after tax of $97 million, down 34% year on year, and underlying NPAT of $137.2 million, 22% lower than the previous corresponding period.
Helia's gross written premium (GWP) lowered 11% to $96.6 million, with total insurance revenue falling by the same percentage to $219.8 million.
Full-year insurance revenue is expected to within a range of $375 million to $415 million. Total incurred claims are expected to increase in the second half, the company said, but remain "well below" Helia's expectations.
The context: Helia's CEO and managing director Pauline Blight-Johnston said that the company's underlying NPAT result was lower than the "very strong" result a year earlier, primarily due to a lower benefit from negative total incurred claims, with claims experience unusually low in both FY23 and the first half of FY24.
New business volumes volumes remain soft, she said, driven by low levels of high loan to value ratio mortgage lending, higher levels of lender self-insurance, and the impact of the federal government's First Home Guarantee scheme — which helps people buy first homes with lower deposits and removes the requirement for lenders’ mortgage insurance.
Helia, which provides mortgage insurance for major lenders such as Commonwealth Bank, Bank of Queensland, Bendigo Bank, ING, and Great Southern Bank, said that it is working to reposition lenders mortgage insurance (LMI) with home buyers, brokers and lenders.
In June, Helia shares tumbled after it was advised by the Commonwealth Bank of potential changes to its LMI contract.
What they said: "As part of our refreshed strategy, we are intensifying our focus on growing and defending our LMI market share, whilst working with a range of stakeholders to growth the market for LMI," Blight-Johnston said.
"Helia remains focussed on our core purpose of accelerating financial wellbeing through home ownership, now and for the future and executing our vision of being the unparalleled leader in LMI," she said.
The source: ASX announcement
