Login
ISCOVER
The LMI provider has reported an increase in business amid an uptick in high loan-to-value ratio (LVR) lending.
ASX-listed lenders mortgage insurance (LMI) provider Helia has reported its results for the financial year ending 31 December 2024 (FY24), with an uptick in high loan-to-value (HLVR) lending and its “differentiated service proposition” leading to an increase in market share.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
However, the LMI provider also noted the “material impact” the federal government’s Home Guarantee Scheme (HGS) had on the full-year results, released on Tuesday (25 February).
Citing data from the Australian Prudential Regulation Authority (APRA), Helia reported an uptick in HLVR lending industry-wide, up 14 per cent when compared to the previous corresponding period (FY23).
Helia also said the proportion of total lending by HLVR loans (31 per cent) remained 4 points below the historical average of 35 per cent.
Against this backdrop, Helia said it had managed to increase market share with gross written premiums (GWP) – the total direct and expected premium received from contracts before deducting ceded reinsurance premiums – rising to $195.6 million, up 6 per cent on FY23 ($185.2 million).
Helia’s GWP for the second half of FY24 was $109.7 million compared to $88.6 million in the previous corresponding period (2H23).
These results contributed to a statutory net profit after tax (NPAT) of $231.5 million and an underlying NPAT of $220.9 million.
Pauline Blight-Johnston, Helia CEO and managing director, said the results “continue to provide us with the flexibility to support our customers, invest in strategic initiatives and undertake disciplined capital management”.
“We have intensified our strategic focus on growing the market for LMI and successfully grown and defended our LMI market share by delivering a differentiated service proposition,” Blight-Johnston said.
“We remain focused on our core purpose of accelerating financial wellbeing through home ownership, now and for the future.”
Home Guarantee Scheme impact
Helia also highlighted the “material impact” of the federal government’s Home Guarantee Scheme (HGS) and increasing levels of lender self-insurance in the LMI market.
Introduced in 2020, the HGS has helped more than 200,000 eligible home buyers into a home, according to industry body Housing Australia.
According to the LMI provider, the HGS now represented 38 per cent of total lending that is either insured or government-guaranteed.
Despite these potential headwinds, Helia said it had helped more than 31,000 Australians achieve home ownership in FY24, saying that its “differentiated LMI offering” was resonating with its customer base.
Helia also said it “continues to engage with government to highlight both the impact of existing policy and the opportunity to improve policy targeting”.
Proposition that resonates
A recent report from the LMI provider said home buyers, particularly first home buyers, are eager to find ways into the market sooner.
The 2024 Helia Home Buyer Sentiment Report – which is based on a survey of 3,002 home buyers conducted by research agency CoreData in August – revealed that 71 per cent of home buyers believe that ‘now’ is a good time to buy and the vast majority of first home buyers (91 per cent) would use a broker to access finance for their purchase.
The report said: “Mortgage brokers play an essential role in providing education, support and guidance to home buyers navigating the complex and often stressful process of purchasing a home.
“The majority of home buyers indicate they are likely to use a broker, reinforced by the perception that mortgage brokers bring valuable expertise, and importantly save time, effort, and have better negotiating power to access better deals for home buyers.”
Greg McAweeney, chief commercial officer at Helia, said: “Understanding buying limits is crucial in the home buying process. Research is a pivotal part of the process and mortgage brokers play an essential role in helping home buyers find the best options to achieve their home ownership without feeling overwhelmed.”
[Related: Cost of living now the main barrier to home ownership]
JOIN THE DISCUSSION