First-half results put the challenges – and opportunities – on the table for all to see
If honesty is the best policy, then Helia, Australia’s largest supplier of lenders mortgage insurance (LMI), deserves some credit.
Clouds have gathered over the ASX-listed LMI specialist ever since the Labor government announced an expansion of its Home Guarantee Scheme (HGS) from the start of next year.
In simple terms, the HGS will allow effectively all first-home buyers in the country to circumvent LMI – the very product that Helia specialises in.
While LMI will still be an important tool for other segments of the homebuying population, it is an undeniable threat to Helia’s bread and butter.
Read more: New Labor policy has huge unseen consequences for mortgage industry
Foreshadowing the challenges ahead, Helia lost its marque client Commonwealth Bank earlier this year.
Helia is critical of the government’s interventionist FHB policies, stating in today’s results: “The company believes that these policy changes are unlikely to sustainably improve levels of home ownership for FHB and introduce risks to government finances and the stability of the Australian financial sector.”
By Helia’s estimations, the LMI industry has paid around $2.9 billion in claims since 2010, including to smaller lenders that rely on LMI to provide finance to high-LVR borrowers.
The group acknowledged it “is facing challenges on the outlook for new business, while the financial impact of the reduction in new business during FY26 will emerge gradually over time”.
But with the challenges candidly laid out on the table, Helia is on a mission to pivot the business in a more sustainable direction.
"Helia is adapting to changing market conditions by creating a simpler and more efficient business, while seeking to rebuild LMI market share through opportunities with existing and new customers,” said the group.
The board is also looking into “a broad range of alternatives to best position Helia for the future and maximise value for shareholders”. The group said it will provide an update once this review is completed.
Helia’s first-half results
In the half year ended 30 June 2025, Helia’s insurance revenue came to $182.2 million, representing a 6% year-on-year decrease.
This decline was primarily driven by lower gross written premiums (GWP) in recent book years, reflecting the ongoing impact of the HGS.
However, year-on-year GWP rose 28% to $109.9 million, attributed to higher market share and increased lending volumes in the mortgage market.
On the profitability front, statutory net profit after tax (NPAT) climbed 38% to $133.7 million thanks to favourable claims experience and strong investment returns. Shareholders were rewarded with a fully franked interim ordinary dividend of 16 cents per share, up 7% year on year.
Helia also renewed its contract with “another top 10 mortgage lender” during the period.
LMI remains an important tool for brokers and borrowers
As the future of the LMI market becomes fuzzy, stakeholders in the mortgage finance industry have voiced their concerns.
Michael Lawrence, chief executive of the Customer Owned Banking Association (COBA), believes the disappearance of the LMI market could limit smaller banks’ capacity to lend to customers with low deposits who are unable to access government support schemes.
“It’s an important part of the market for us,” Lawrence said. He emphasised in a recent interview with MPA that LMI is not only used by first-home buyers.
“If the LMI market disappears, then other low-deposit customers, such as those moving house or investors, will also be impacted,” he said. “That would be problematic for both customers and the banks that serve them.”
COBA is urging the government to take into account the effects its LMI waivers may have on competition within the banking sector.
Read more: Would slashing first-home buyer incentives help housing crisis?
Brokers, such as Amelia Pignone, owner of Sydney-based brokerage LendX, share these concerns. “With LMI demand falling and insurers under pressure, the market risks tilting further in favour of the major banks,” she told MPA.
“If external LMI providers exit, non-major lenders lose a key tool, limiting high-LVR lending and borrower choice. Brokers must stay sharp, adapt quickly, and continue driving competition."
