Last year’s mortgage rules have hit the insured mortgage market hard, according to a new report
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Last year’s mortgage rules have hit the insured mortgage market hard, according to a new report.
Genworth’s mortgage insurance portfolio has taken a hit since the introduction of last year’s mortgage rule changes, which targeted the insured mortgage market.
The nation’s second-largest provider of mortgage insurance reported the total value of new insurance written in Q2 of this year was down $6.1 billion from $31.7 billion a year ago – an 81% year-over-year drop.
Portfolio insurance saw the most drastic decline, falling 96% to $1.1 billion from $25.9 billion in Q2 2016.
The decline also included a 14% decrease in insurance bought by homeowners, which fell from $5.8 billion to $5 billion year-over-year.
Despite the obvious negative impact the mortgage rules – which included a crackdown on bulk portfolio insurance -- have had, the company’s portfolio remains strong.
The loss ratio for the quarter was 3% -- down from 21% a year prior.
Delinquencies outstanding also fell by 273 to 1,809.
"We are pleased with the quarter's results reflecting continued strength in portfolio quality and growth in our average premium rate, both of which bode well for future performance Stuart Levings, President and CEO, said. "Our extraordinarily low loss ratio of 3% reflects the positive impact of macroeconomic tailwinds and strong housing markets and is likely to normalize as these markets adjust to government actions and market forces. Furthermore, we are pleased that one of our key rating agencies, DBRS, affirmed our ratings of AA at the operating company level, with stable trends, recognizing our solid market position, high quality insurance portfolio, advanced risk analytics and strong capital position."
Transactional premiums written by the insurer fell 5% year-over-year but were up 81% quarter-over-quarter.
Premiums earned, meanwhile, were up 7% y/y and up 1% Q/Q.
Related stories:
Mortgage industry boomed in 2016
Canadian mortgage market remains relatively stable - credit data
Genworth’s mortgage insurance portfolio has taken a hit since the introduction of last year’s mortgage rule changes, which targeted the insured mortgage market.
The nation’s second-largest provider of mortgage insurance reported the total value of new insurance written in Q2 of this year was down $6.1 billion from $31.7 billion a year ago – an 81% year-over-year drop.
Portfolio insurance saw the most drastic decline, falling 96% to $1.1 billion from $25.9 billion in Q2 2016.
The decline also included a 14% decrease in insurance bought by homeowners, which fell from $5.8 billion to $5 billion year-over-year.
Despite the obvious negative impact the mortgage rules – which included a crackdown on bulk portfolio insurance -- have had, the company’s portfolio remains strong.
The loss ratio for the quarter was 3% -- down from 21% a year prior.
Delinquencies outstanding also fell by 273 to 1,809.
"We are pleased with the quarter's results reflecting continued strength in portfolio quality and growth in our average premium rate, both of which bode well for future performance Stuart Levings, President and CEO, said. "Our extraordinarily low loss ratio of 3% reflects the positive impact of macroeconomic tailwinds and strong housing markets and is likely to normalize as these markets adjust to government actions and market forces. Furthermore, we are pleased that one of our key rating agencies, DBRS, affirmed our ratings of AA at the operating company level, with stable trends, recognizing our solid market position, high quality insurance portfolio, advanced risk analytics and strong capital position."
Transactional premiums written by the insurer fell 5% year-over-year but were up 81% quarter-over-quarter.
Premiums earned, meanwhile, were up 7% y/y and up 1% Q/Q.
Related stories:
Mortgage industry boomed in 2016
Canadian mortgage market remains relatively stable - credit data
