Helia Earnings: Cyclically Weak Demand and Claims

Helia is not trying to shrink to greatness, but as industry demand for lenders mortgage insurance dries up, so does Helia’s gross written premium. Helia reported an 11% drop in GWP in the half to AUD 85.9 million. It’s a whopping 70% fall from first-half 2021 GWP, which was almost AUD 290 million. Low cash rates boosted demand a couple of years ago, and the opposite is occurring now, as borrowing capacity—regardless of leverage—is decreased by higher repayment costs. Banks waving borrower requirements for insurance is also likely a cyclical drag, given that bad debts have been nonexistent. Still, the government's First Home Guarantee Scheme appears to be a more permanent drag on demand.