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Mortgage insurer MGIC is set to pull out of Australia after failing to find a bidder for its local operation.
According to today's The Australian Financial Review, MGIC CEO Patrick Chipman said the business would be put into “run-off” mode as of next month, although expressions of interest would still be considered.
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The insurer, which joined the local market in 2007, has been up for sale since October last year after its US parent posted a loss of nearly US$520 million (A$718 million).
The housing market collapse in the US, which also saw mortgage insurer PMI sold off by its US parent to QBE last year, has now placed the future of Australia’s largest mortgage insurer Genworth Financial in question.
According to the daily, a research note by UBS yesterday said that Genworth may also consider a sale of its Australian operations in order to free up capital.
