CBA shops around for new LMI provider

The Commonwealth Bank of Australia (CBA) is expected to imminently issue a tender for its external lenders mortgage insurance (LMI) requirements for the whole CBA group.

Helia (formerly known as Genworth) has been providing LMI services for new high loan-to-value ratio (LVR) residential mortgage loans under an existing supply and service contract (which does not include all CBA group brands).

However, this contract expires on 31 December 2025.

Helia notified the market on Wednesday (19 June) that it had been advised by CBA of its intention to issue a request for proposal relating to its external LMI requirements for the whole CBA group.

It flagged that it has been providing CBA with LMI for over 50 years and that the LMI business underwritten under the CBA contract represented approximately 53 per cent of its gross written premium (GWP) in the financial year 2023.

In a statement, Pauline Blight-Johnston, CEO and managing director of Helia, said: “Helia has provided CBA with LMI for more than 50 years and we welcome the opportunity to continue and extend our relationship.

“Helia is Australia’s first LMI provider and has played a pivotal role in the property market since 1965. We harness the power of almost 60 years’ experience to help aspiring home buyers realise their property dreams and get into homes sooner.”

Following the announcement, the share price of the ASX-listed LMI provider dropped dramatically. It fell from $4.22 a share down to $3.34 per share at the close of markets on Wednesday. However, this recovered to $3.88 by close of business yesterday (20 June).

[Related: Helia announces new chair]