Genworth (ASX:GMA) share price dives 17% after CBA contract update
The Genworth share price has plummeted after a contract update with the Commonwealth Bank of Australia
Kerry Sun is a site writer at The Motley Fool Australia. He holds a Bachelor of Commerce, majoring in Finance and Economics. Kerry started his investing and trading journey back in 2014, riding the highs of A2 Milk and lows of Slater and Gordon. Kerry takes a techno-fundamental view on stocks, understanding the importance of sound fundamentals supported by a strong technical chart. Current sectors of interest include US sports betting, rare earths, lithium and BNPL.
Mortgage insurance: booming, burning
In the concentrated, near-duopoly that is the lenders’ mortgage insurance market, the current swoon in housing prices paired with an unstable industry structure look to be mixed blessings.
The LMI sector is an industry in flux, with Arch LMI now two years into its journey of disruption in a sector where the overwhelming share of premiums and profits has long been held by Genworth and QBE, and two upstarts have retired hurt.
In various guises Genworth has been the undisputed market leader in mortgage insurance, ever since the old HLIC pioneered this form of insurance (alongside AMP) in the mid 1960s.
Genworth profits dive 190% amid COVID-19 crisis By Malavika Santhebennur 16 February 2021
An anticipation of future claims outcomes stemming from the economic impacts of COVID-19 has seen the mortgage insurer’s underlying profit plummet by almost 190 per cent.
Genworth Mortgage Insurance Australia has released its financial results for the full-year ending 31 December 2020 (FY20), posting a statutory net loss after tax (NLAT) of $107.6 million in the 12 months to December 2020.
This was down almost 190 per cent from a statutory net profit after tax (NPAT) of $120.1 million in FY19.
The FY20 underwriting result of a $234.0 million loss was impacted by the coronavirus pandemic, which the mortgage insurer said led to a write-down of deferred acquisition costs of $181.8 million (pre-tax) as at 3