LMI claims remain stable despite slowdown fears

LMI claims remain stable despite slowdown fears | Insurance Business

LMI claims remain stable despite slowdown fears

LMI claims as a result of mortgage default have stabilised following a post-GFC increase and fears of a forthcoming economic slowdown in Australia.

QBE LMI CEO Jenny Boddington told media at the launch of the company's annual Mortgage Barometer report that most claims were the result of 'life events'.

"A loan will go to claim usually because of life events, such as divorce or death," she said. "A couple of years ago, we did see default rates increase because of a slowdown in tourism and hospitality especially. We're not seeing that getting worse - the trend remains constant."

Boddington added that views on whether the Australian economy was in the midst of a significant slowdown varied significantly.

"Like you, I read the papers all about the slowdown, but you have to balance those views against the low interest rate environment," she added.

The Mortgage Barometer report also revealed that demand for property remains high, with two-thirds of respondents intending to purchase property in the next five years. However, political instability meant that may potential buyers are delaying, with more than half of those intending to buy property were also sitting on their hands until afer September's federal election.

First homebuyers - a key demographic for LMI providers - were bearish about their prospects, however, with 69% worried that they would never be able to afford their own home. Two-thirds of prospective FHBs in NSW and Queensland also said that change to grant systems had affected their purchasing intentions.