Helia Group Shares Plummet Nearly 25% as CBA Ends Key Insurance Contract

Mon 24 Mar 25, 04:44 AM | Team Kalkine

Image source: Shutterstock

Highlights

Stock Crash: Helia Group shares tumbled 25% to AU$3.61 in early trade following a major contract loss.

CBA Blow: Commonwealth Bank entered exclusive talks with a new provider for lender mortgage insurance (LMI), putting nearly half of Helia’s gross written premium (GWP) at risk.

Future Strategy: While revenue from existing policies will continue over 15 years, Helia plans to adapt by seeking new partnerships and exploring capital management initiatives.

Helia Group Ltd (ASX:HLI) shares took a massive hit on Monday, plunging nearly 25% to AU$3.61 per share. The sharp selloff follows news that the lender mortgage insurance (LMI) provider is set to lose a major contract with Commonwealth Bank of Australia (ASX:CBA), its largest client.

Investors reacted swiftly to the revelation that nearly half of Helia’s gross written premium (GWP) could disappear. The company confirmed that CBA, which had previously sought proposals for its external LMI needs, has now entered exclusive negotiations with an alternative provider. If these discussions conclude successfully, Helia’s contract with CBA will not be renewed beyond its current expiry date of December 31, 2025.

Despite the contract loss, Helia reassured stakeholders that it will continue generating GWP from CBA until the end of FY25. Additionally, revenue associated with existing policies will be recognized over the next 15 years under AASB 17 accounting standards, meaning the financial impact will be gradual rather than immediate.

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