Helia to Lose 17% of Premiums as ING Ends LMI Contract in 2026
Helia Group reveals ING Bank Australia will not renew its Lenders Mortgage Insurance contract beyond June 2026, prompting a strategic business review amid evolving market dynamics.
- ING to negotiate with alternate LMI provider after June 2026
- Contract accounts for 17% of Helia’s 2024 Gross Written Premium
- Revenue from existing policies to be recognised over 15 years
- Loss of new ING business may boost Helia’s organic capital generation
- Board initiates comprehensive review considering customer losses and government scheme changes
Contract Update and Immediate Impact
Helia Group Limited has announced a significant development regarding its relationship with ING Bank Australia. Following a recent Request for Proposal (RFP) process, ING has decided to enter negotiations with an alternative provider for its Lenders Mortgage Insurance (LMI) needs. This decision means Helia’s existing contract, which runs until 30 June 2026, will not be renewed beyond that date. The contract currently represents approximately 17% of Helia’s Gross Written Premium (GWP) for 2024, underscoring its material importance to the insurer’s revenue base.
Revenue Recognition and Financial Implications
Despite the impending loss of new business from ING, Helia will continue to recognise revenue from policies already in force under the contract. According to accounting standards, this revenue will be recognised over the next 15 years, reflecting the long-term nature of insurance contracts. The gradual phasing out of new ING business means the financial impact will emerge over time rather than abruptly, providing Helia with a window to adjust its strategy and operations.
Capital Generation and Strategic Review
Interestingly, Helia anticipates that the absence of new business from ING could enhance its organic capital generation. Without the need to underwrite new policies for this significant client, the company may find increased flexibility for capital management activities. In response to this shift, Helia’s Board has launched a comprehensive business review. This review aims to assess the company’s strategic response not only to the loss of ING’s new business but also to the broader challenges posed by the recent changes to the Government’s Home Guarantee Scheme for first home buyers.
Broader Market and Competitive Landscape
The decision by ING to seek an alternative LMI provider signals a competitive shake-up in the Australian mortgage insurance market. Helia will need to navigate this evolving landscape carefully, balancing the retention of existing policy revenue with efforts to secure new business from other sources. The outcome of the Board’s review will be critical in shaping Helia’s future positioning and resilience amid regulatory changes and shifting customer relationships.
Looking Ahead
As Helia moves forward, investors and market watchers will be keenly focused on the company’s strategic adjustments and capital management initiatives. The gradual nature of the revenue impact offers some breathing room, but the loss of a major client like ING underscores the importance of diversification and innovation in a competitive insurance sector.
Bottom Line?
Helia’s next moves will reveal how it adapts to a shrinking client base and a changing mortgage insurance market.
Questions in the middle?
- Which alternative provider has ING selected, and what advantages do they offer?
- How will Helia’s business review address the loss of two significant customers?
- What specific impacts will changes to the Government’s Home Guarantee Scheme have on Helia’s growth prospects?
