QBE LMI reports lower premium income and predicts more of the same

Insurer QBE has suffered a 20 per cent fall in gross written premium in its lenders' mortgage insurance business over the six months to June.

The company said in its financial report that the tightening of credit terms and conditions in the mortgage market had flowed through to "significantly reduced" new business flows in its LMI business.

On the positive side, the combination of low interest rates, relatively stable unemployment and rising house prices contributed to very low claims activity.

The company expects these conditions to continue. It has revised its premium expectations for the full year down by around five per cent.

QBE said it was continuing to review a number of strategic options in relation to QBE LMI, including sale or partial sale, as well as reinsurance opportunities.

Earlier this month, mortgage insurer Genworth reported a nine per cent fall in its gross written premium for the six months to June.

Genworth chief executive Ellie Comerford said the fall was largely due to a reduction in mortgage originations with loan-to-valuation ratios above 90 per cent.

Among Genworth's customers the proportion of policies written on loans with LVRs above 90 per cent fell by seven per cent, compared with the previous corresponding period.