Helia, one of Australia’s largest providers of lenders mortgage insurance (LMI), has launched a sweeping review of its operations after losing another major bank contract, sending its shares into a steep dive.
On Wednesday, Helia – formerly known as Genworth – confirmed that ING Bank had begun negotiations with a different LMI provider, marking the second significant contract loss for the ASX-listed company in just a few months. According to a report from Financial Review, the insurer had earlier flagged the loss of its most valuable contract, with Commonwealth Bank of Australia entering exclusive talks with a rival.
Helia shares tumbled 23% to $4.21 by midday, following a sharp drop to $3.92 earlier in the session.
“The board has commenced a comprehensive business review,” Helia said in a statement to the ASX. “The review will consider the business response to the expected loss of new business from two significant customers and the broader impact of the recently announced changes to the government’s Home Guarantee Scheme for first home buyers on our operating environment.”
While Helia has yet to appoint external advisers, such reviews can lead to structural changes, including divestments, business unit closures, or even a full sale of the company.
The contract with ING, which accounted for about 17% of Helia’s 2024 gross written premium, is set to expire on June 30, 2026, but can be terminated earlier with three months’ notice.
The blow comes as the broader LMI industry faces headwinds from government reforms. The Home Guarantee Scheme, which assists first home buyers to secure loans with deposits as low as 5%, has been expanded, potentially reducing demand for LMI products. Traditionally, banks require LMI if borrowers have less than 20% of a home’s value as a deposit.
Adding to the turbulence, chief executive Pauline Blight-Johnston has stepped down after more than five years at the helm. She has been replaced on an interim basis by chief financial officer Michael Cant.
Blight-Johnston was previously investigated by the board following her sale of shares prior to the announcement of the CBA contract loss but was ultimately cleared of any wrongdoing.
Helia’s strategic response in the months ahead will be closely watched, as investors await clarity on its future in an increasingly competitive market.
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