After an anxious time last year, while it waited months for its biggest customer, Commonwealth Bank, to renew its lenders mortgage insurance contract, Genworth Mortgage Insurance Australia is having a better run this year.

Genworth reported at an investor day last week that it retained all customers with contracts up for renewal last year and “this strong momentum has continued into 2022”. 

Apart from CBA, which accounts for more than half of Genworth’s gross written premium, renewals include ING Bank, Gateway and Resimac.

And it has won a new exclusive contract with Bank of Queensland and its subsidiary ME Bank.

The company said it is keen to introduce some innovation into the market.

In December, it launched a family assistance program, which reduces the LMI premium paid by a lender when the cost of LMI is funded by the home buyer’s family member and paid upfront at the time of the loan settlement.

By reducing the cost of LMI, the program removes the barrier to taking out high LVR loans and reduces the time needed to save a deposit.

This year it has invested in OSQO, a start-up that hopes to fill home buyers’ deposit gaps. OSQO is developing a platform that raises funds from a range of sources, including private investors, to provide home buyers with a “shared equity deposit bond” to fund a deposit.

OSQO will pay investors quarterly interest at prevailing mortgage rates, which is passed through from the home buyers, and advise home buyers on the best time to refinance and pay out their OSQO finance.

It claims its fees will be cheaper than the cost of lenders mortgage insurance would be if the borrowers took out a loan with a loan-to-valuation ratio over 80 per cent.

Genworth said it is well placed to deal with the impact of rising interest rates. The current delinquency level is low, the portfolio is underweight key risk areas and there are substantial house price buffers.

It does expect rising interest rates and moderating house prices to lead to higher delinquencies and claims.