Genworth Mortgage Insurance has suffered a $90 million loss in the first half after taking a $181.8m pre-tax writedown on the acquisition of new mortgage contracts in the first quarter due to the impacts of COVID-19.
Genworth made an $88.1m profit last year.
The company has also set aside $35.5m in loss reserving, due to the novel coronavirus.
“We responded quickly to the pandemic and have adapted our ways of operating in a manner that prioritises the well-being of our people and supports our lender customers and their borrowers in these challenging times,” Genworth chief executive and managing director Pauline Blight-Johnston said.
Genworth said its delinquency rate increased two basis points to 0.62 per cent during the half-year, with new delinquencies down 9.6 per cent to 4988 as loan repayment deferrals and legal moratoriums slowed customer loss management processes.
Genworth said it had $800m of excess loss reinsurance cover from a panel of over 20 reinsurers.
New insurance written in the half was up 8.1 per cent to $13.5m as customers took advantage of lower interest rates to purchase homes in Australia’s capital cities.
“The anticipated impacts of COVID-19 on Genworth are playing out broadly in line with our 1Q20 assumptions at this stage, although there remains a long road ahead of us,” Ms Blight-Johnston said.
Government support measures that were recently extended beyond September will help cushion the effect of the virus on Genworth’s claims experience, which will ultimately depend on the pace of the economic recovery, the company said.
Genworth shares were down 6.5 per cent to $1.725 at 11.30am.