Helia Group has announced that ING will not be renewing its contract for lenders’ mortgage insurance (LMI) and will proceed with negotiations with another provider. Helia’s current contract with ING, set to expire on June 30 of next year, contains a clause allowing ING to terminate the agreement with three months’ notice. Helia provides lenders’ mortgage insurance, protecting lenders against losses if borrowers default. It also provides services to help lenders manage their portfolios.
The impact on Helia’s financials from ceasing to write new business from ING will unfold gradually. However, the company anticipates that the absence of new business from ING will likely increase its organic capital generation. This increased capital may provide scope for additional capital management activities in the future.
In light of this development, Helia’s board has initiated a comprehensive business review. This review will address the business’s response to the expected loss of new business from two significant customers. It will also consider the broader impact of the recently announced changes to the government’s home guarantee scheme for first home buyers on their operating environment.
Helia will provide further updates on the outcomes of its business review as appropriate. The company’s shares experienced a dip following the announcement, reflecting market reaction to the news.
