Westpac Diversifies its LMI risk

Westpac has notified brokers today that loans with LVRs greater than 90 % will be directly insured by Genworth, rather than the portfolio insurance currently carried via WLMI.


Will be interesting to see if WLMI want to divest themselves of their lo doc insurance, because that will well and truly stuff the last decent lo doc provider ( WBC and Rams)

I suspect the writing is on the wall perhaps ?

ta
rolf
 
Westpac has notified brokers today that loans with LVRs greater than 90 % will be directly insured by Genworth, rather than the portfolio insurance currently carried via WLMI.


Will be interesting to see if WLMI want to divest themselves of their lo doc insurance, because that will well and truly stuff the last decent lo doc provider ( WBC and Rams)

I suspect the writing is on the wall perhaps ?

ta
rolf

who are WLMI?
 
Hiya

Pls note folks at this stage its only for > than 90 % ...............but I have this feeling ............

Stg as a lo doc provider..............nil cash out, no trusts, DNA in terms of 6 mths statements of all facilities etc, they are better than some, but guess what, for those that havent noticed there is a CLEAR policy alignment happening where STG policy at the edges is coming back to where WBC policy is.

Some argue that if that was the case, it would have happended with RAMS. Diff barrel of fish though where WBC mainly provide lump funding to RAMS and let them play within certain constraints, St George will be like Challenge and BOM before it. We have short memories..................

Long live diversity :(


ta
rolf
 
But different LMI?

See previous reference to the bucket...

Westpac LMI is ultimately underwritten by Genworth, it's just bundled in house. I have seen cases even a few years ago where the LVR was 90% but because of certain parameters it was referred to Genworth because it was outside their in-house policy.
 
Why would WBC stop self insuring if there was reasonable risk adjusted rewards in it?

There's only two ways to interpret this:
1. rewards are being eroded by foreign insurers.
2. risk is expected to grow.

Now why would WBC think risk will grow?
 
Hiya WW

Its a simple risk diversification.

NAB have recently changed their lmi provider.

It does make sense to diversify that underwriting risk, and I suspect it also meanss that they may need a little less reserve capital.

ta
rolf
 
Hiya WW

Its a simple risk diversification.

that wasn't necessary in 2004,05,06,07,08...... :)

NAB have recently changed their lmi provider.

It does make sense to diversify that underwriting risk,

especially in the face of growing uncertainty/risk.


and I suspect it also meanss that they may need a little less reserve capital.

ta
rolf

and I thought low risk compulsory insurance was a fat cash cow...


suppose it will allow WBC to 'diversify' blame to those nasty foreign controlled LMI insurers, when/if more loan apps get knocked back.
 
I suppose the cumulative risk of more and more high lend LVRs would be the core issue why it wasnt a problem b4

But it makes sense to offload what you see as your riskieer stuff and keep the cream :)

ta
rolf
 
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