Genworth Mortgage Insurance added $47.1 million to its reserves in the third quarter (Q3) of 2020, shoring up its defences for tough times ahead. In total, the lenders mortgage insurance (LMI) provider has increased its reserves up to $82.5 million since the start of the COVID-19 pandemic.
At the end of Q3, Genworth had over 31,000 active repayment deferrals from lenders, according to a report in Savings.com.au. The insurer also revealed it expects some loans to hit challenges at the end of their deferral periods.
Despite the financial uncertainty sparked by the coronavirus pandemic, Genworth CEO and managing director Pauline Blight-Johnston has praised the repayment deferral programs, government job support packages and legal moratoriums that “are assisting Australians at this time of need”.
“These programs are beneficial for the economy and Genworth’s business,” she said. “They’re delaying the development and progression of delinquencies and claims, providing Australians with some respite and time to recover. They do, however, reduce our visibility of anticipated future claims outcomes.”
According to the Savings.com.au report, the chief executive stressed that Genworth has a strong capital buffer to navigate ongoing economic uncertainties and potential mortgage challenges as the COVID crisis drags on.
“We understand how important it is for us to play our part in the nation's rebuilding program, by continuing to support our customers, their borrowers and the broader community,” she commented. “Whilst there are initial signs of economic recovery, the lockdown in Victoria and continuing border closures in some states demonstrate that the impact of the pandemic still has a while to play out, so there remains considerable uncertainty about the ultimate impact on Australian borrowers and on Genworth's claims outcomes.
“We will keep working together with our lender customers through this difficult and uncertain period, and beyond, to support Australian borrowers, helping as many people as possible to realise the dream of home ownership and stay in their home wherever possible.”