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Highlights

  • ING Bank notifies Helia of plans to shift to an alternate Lenders Mortgage Insurance (LMI) provider.

  • Helia’s contract with ING accounts for approximately 17% of FY24 Gross Written Premium (GWP).

  • Company launches strategic review following anticipated loss of two key clients and regulatory changes.

Shares of Helia Group Limited (ASX:HLI) fell sharply by over 25% to AUD 4.07 in early trade after the company disclosed a material development regarding one of its major client relationships. The update revealed that ING Bank (Australia) has chosen to proceed with another provider for its Lenders Mortgage Insurance (LMI) requirements, marking a potential revenue impact for Helia.

Helia, Australia’s leading provider of LMI solutions, confirmed that ING has made this decision as part of a Request for Proposal (RFP) process. While the current contract between Helia and ING runs until 30 June 2026, ING holds the right to terminate the agreement earlier with a three-month notice period.

Contract Represented 17% of FY24 Premiums

The contract with ING has been a significant component of Helia’s revenue base. The LMI business written under the agreement accounted for approximately 17% of Helia’s Gross Written Premium (GWP) in FY24. Although Helia will continue to generate GWP from ING until contract termination or expiry, no new business will be underwritten once the agreement concludes.

According to Helia, revenue from policies already in force will continue to be recognised over the next 15 years, in line with AASB 17 insurance accounting standards.

Strategic Review Underway

In response to this development, Helia’s Board has launched a comprehensive business review. The review will assess Helia’s strategy in light of the expected withdrawal of new business from two major clients, and also consider the impact of recent changes to the Government’s Home Guarantee Scheme on the operating environment.

The company indicated that while the immediate financial effects of the ING decision will materialise gradually, the loss of new underwriting volumes is expected to increase organic capital generation. 

Market Reaction

The announcement triggered a market reaction, with Helia shares falling to AUD 4.07, a decline of more than 25%.