Genworth Mortgage Insurance Australia has renewed its contract with its biggest customer Commonwealth Bank, ending six months of speculation about the future of the relationship.

The CBA mortgage insurance contract accounted for around 57 per cent of Genworth’s gross written premium in 2020.

In June last year, Genworth disclosed that CBA had advised it that it would issue a request for proposal relating to its lenders mortgage insurance requirement following the expiry of its current exclusivity arrangement with Genworth.

Genworth announced yesterday that the parties have entered into exclusive negotiations on the terms of a new contract that will take effect once the current agreement expires at the end of this year.

The key terms for the new deal include a three-year exclusive contract commencing 1 January 2023 for the provision of LMI for a minimum proportion (50 to 70 per cent per contract year) of new high loan to valuation ratio residential mortgages.

Genworth’s most recent financial report, for the six months to June 2021, included reporting a net profit of A$59.4 million, based on net earned premium of $170.9 million.