Helia: Mixed Update as Demand and Claims Costs Stay Low

Helia’s performance continues to be defined by weak demand for lenders' mortgage insurance and very low levels of claims. First-quarter 2024 premiums of AUD 38.4 million fell 25% from the previous corresponding period, and we estimate down 12% on fourth quarter 2023. The federal government home guarantee scheme and less demand for high loan/value ratio loans in a higher rate environment are the key drivers. Helia also called out Commonwealth Bank, Helia’s largest customer, insuring fewer of its high loan/value ratio loans. The ability for Helia to offset reduced volumes or higher claims on Commonwealth Bank loans over the medium term will be challenging, given how much business the bank brings to Helia.