Genworth Financial Mortgage Insurance Pty Ltd (Genworth Australia) has renewed its contract with Commonwealth Bank of Australia (CBA), continuing a partnership that dates back over 50 years.
CBA is Genworth Australia's largest lender customer, accounting for more than half of its gross written premiums (GWPs).
The contract, which remains subject to the agreement of contractual terms, reinforces Genworth Australia's competitive position and enables the firm to maintain its leading market share, according to independent credit rating provider S&P Global Ratings.
Read more: Genworth confirms IPO, becomes Enact Holdings
“In our view, the new contract with CBA (AA-/Stable /A-1+) provides greater certainty around Genworth Australia's (A/Negative/--) new business flows for the next four years and will support its profitability over that period,” S&P Global Ratings said in a statement.
“CBA presents a concentration risk to Genworth Australia, in our view. The new contract removes some of this downside risk for Genworth Australia's competitive position and solidifies the insurer's credit strengths.”
The deal will see Genworth Australia continue providing lender mortgage insurance exclusively to CBA for three years, commencing January 01, 2023. It covers the group's CBA and Residential Mortgage Group businesses, excluding Bankwest.
