Helia: Higher Claims Still Expected but Higher House Prices Will Soften the Blow

With the Reserve Bank of Australia cash rate rapidly increasing to 4.1% and tipped to move higher, demand for borrowing at a high loan/value ratio, and ultimately lenders mortgage insurance, have fallen materially since 2020 peaks. Helia’s third-quarter 2023 gross written premiums of AUD 45 million are around 35% lower than third quarter 2022, and almost 70% lower than third quarter 2020. The rate of decline has slowed, and we think likely approached a bottom.