First quarter profits are up while claims and defaults are down for one of Canada’s leading mortgage default insurers.
"Our strong business execution and continued trend of lower losses produced solid first quarter results," Brian Hurley, chairman and chief executive officer for Genworth
said in the company’s Q1 results release. "The stable economy and housing market, and the 15 per cent average price increase effective May 1, 2014, should bode well for our business going forward."
The results were released one day prior to Genworth implementing its 15 per cent rate increase. The company reported a first quarter net income of $95 million and net operating income of $91 million.
So far in 2014, Genworth has written $84 million which was in line with Q1 2013’s total but down $45 million from Q4 2013 which, according to the company, is normal due to seasonality.
As for its losses, Genworth reported $28 million – down from $44 million in Q1 2013.
“During the quarter, the Company experienced lower losses primarily due to a favourable shift in the regional mix of delinquencies, a stable economic environment, and continued housing market strength,” the official release states. “This resulted in a loss ratio of 20 per cent for this quarter, 11 points lower than the same quarter in the prior year and 2 points lower than the prior quarter.”
Delinquencies were down 5 per cent year-over-year and totalled 1,860 at the end of Q1 2014. Genworth attributes the drop to the strong credit quality of the portfolio and Canada’s improving economic conditions.