What the Loss of CBA Means for Helia Group Limited (ASX:HLI) as a New CEO Takes Charge

Key Highlights

• Helia Group recorded a 44% decline in H1 2026 gross Written Premium to AUD 61.6 million.
• Statutory net profit decreased 25% to AUD 100 million, reflecting lower insurance contributions.
• ING Bank Australia renewed its exclusive lenders Mortgage insurance agreement for at least four years.
• Helia maintained a 2.01 times Capital coverage ratio at September 2026, above its target range.

Helia Group Limited (ASX:HLI), an Australian lenders mortgage insurance provider, is navigating a significant change in its operating environment following the loss of its Commonwealth Bank of Australia (CBA) Supply arrangement for new mortgage insurance business. The contract previously represented a substantial portion of Helia's premium generation, and its expiry has contributed to a considerable decline in gross written premium during 2026. Despite lower new Business volumes, the company continues generating Earnings from its existing insurance portfolio, supported by Investment income, relatively low mortgage claims and capital levels above its target range.

Helia's financial results for the six months ended 30 June 2026 reflected the effects of the contract transition, with gross written premium declining by 44% to AUD 61.6 million.

Insurance Revenue decreased by approximately 6% to AUD 170.6 million, while statutory net profit after tax fell by 25% to AUD 100.0 million.

The September 2026 quarterly update showed that reduced premium generation continued into the second half of the financial year.

However, the company maintained its FY26 insurance revenue guidance of AUD 330 million to AUD 360 million.

Meanwhile, Helia is entering a new phase of Leadership under Mark Senkevics, who joined as Chief Executive Officer and Managing Director in October 2026. The leadership transition comes as the company focuses on customer relationships, operating efficiency and adapting its business model to changes in Australia's mortgage insurance market.

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Understanding Helia Group's Lenders Mortgage Insurance Business

Helia provides lenders mortgage insurance (LMI) to financial institutions that offer residential mortgage loans.

Lenders mortgage insurance protects a lender against financial loss if a borrower defaults on a mortgage and the proceeds from selling the secured property are insufficient to repay the outstanding loan.

The insurance is generally associated with borrowers who have a deposit representing less than 20% of the property's value.

These loans typically have a loan-to-value ratio exceeding 80%.

Lenders mortgage insurance allows eligible borrowers to access home loans with smaller deposits while providing additional protection to lenders.

However, the insurance protects the lender rather than the borrower.

If a borrower defaults and the insurer pays a claim, the borrower may remain liable for any outstanding Debt under applicable arrangements.

Helia generally receives the insurance premium when the mortgage is originated.

However, the premium is not necessarily recognised entirely as insurance revenue at the time the policy is written.

Instead, revenue is recognised over the period during which the company provides insurance coverage, reflecting the expected pattern of insurance services.

This accounting structure means changes in gross written premium can affect reported insurance revenue gradually.

Consequently, Helia continues generating revenue from insurance policies written in previous years, even when new business volumes decline.

The company's financial performance is primarily influenced by premium generation, insurance revenue recognition, claims experience, investment returns and operating expenses.

Commonwealth Bank Contract Loss Changes Helia's Business Profile

The loss of Commonwealth Bank's lenders mortgage insurance business represents a significant change in Helia's customer portfolio.

CBA was previously one of the company's largest lender customers.

During FY25, Commonwealth Bank accounted for approximately 44% of Helia's gross written premium.

The arrangement ceased generating new CBA business for Helia from early 2026 after the bank selected an alternative mortgage insurance provider.

CBA's decision resulted in a reduction in Helia's new premium generation.

However, existing CBA mortgage insurance policies remain part of Helia's insurance portfolio.

The company continues recognising revenue from those policies as insurance coverage is provided.

This distinction is important because the financial effect of the contract loss extends beyond the period in which new premium generation declines.

Gross written premium reflects newly issued insurance contracts, while insurance revenue includes contributions from contracts written in earlier periods.

Therefore, the reduction in new CBA business affects gross written premium immediately, but its impact on insurance revenue emerges progressively.

Over time, revenue associated with existing CBA policies will decline as the insured loans mature, are repaid or otherwise cease to require coverage.

Helia's financial performance will consequently depend on its ability to generate new business from other lenders while managing the gradual reduction in revenue associated with the former CBA relationship.

H1 2026 Gross Written Premium Declines 44%

Helia reported gross written premium of AUD 61.6 million for the six months ended 30 June 2026.

This compared with AUD 109.9 million in H1 2025, representing a decline of approximately 44%.

The reduction primarily reflected the loss of new CBA business.

Gross written premium measures the value of insurance premiums generated from new business during a reporting period.

It is therefore an important indicator of current Demand for mortgage insurance products.

The decline demonstrates the financial significance of losing a major lending institution as a customer.

However, Helia continued generating premium revenue through its remaining lender relationships.

The company maintains arrangements with financial institutions that use mortgage insurance to support eligible home lending.

Future premium generation will depend on new mortgage lending volumes, the proportion of borrowers requiring LMI and the company's ability to retain existing lender customers.

Changes in government housing schemes and competition from other mortgage insurance providers will also influence demand.

Insurance Revenue Declines More Gradually Than New Premiums

Although gross written premium decreased by 44%, Helia's insurance revenue declined at a considerably slower rate.

Insurance revenue reached AUD 170.6 million during H1 2026, compared with AUD 182.2 million in H1 2025.

This represented a decline of approximately 6.4%.

The difference between premium generation and recognised insurance revenue reflects the company's insurance accounting model.

Revenue from previously written contracts continues to be recognised while those policies remain in force.

Consequently, Helia's existing insurance portfolio continues contributing to earnings even as new premium generation weakens.

However, a sustained reduction in new business can gradually reduce the amount of future revenue available for recognition.

The effect depends on the duration of existing insurance contracts, repayment patterns and the Volume of new policies written.

Helia continues monitoring these factors while adjusting its operating strategy.

The company has maintained FY26 insurance revenue guidance of AUD 330 million to AUD 360 million.

This outlook reflects the expected contribution from the existing insurance portfolio and the progressive effects of lower new business volumes.

H1 2026 Profitability Reflects Lower Insurance Contributions

Helia recorded statutory net profit after tax of AUD 100.0 million during H1 2026.

This compared with AUD 133.7 million in the corresponding period of 2025, representing a decline of approximately 25.2%.

Underlying net profit after tax reached AUD 106.3 million.

The reduction in statutory earnings reflected changes in insurance revenue, investment income and other operating factors.

Despite the decline, the existing insurance portfolio continued generating profitability.

Helia benefited from relatively low mortgage claims activity, reflecting the performance of insured loans and the Equity available in residential properties.

The company's insurance result also benefited from favourable adjustments to claims reserves.

Reserve releases occur when updated assessments indicate that less money may be required to settle previously recognised claims.

These adjustments can improve reported insurance profitability.

However, future reserve movements will depend on the actual performance of insured mortgages and broader economic conditions.

Investment income provides another important contribution to Helia's financial results.

The company maintains a substantial investment portfolio to support its insurance liabilities and regulatory capital requirements.

Returns generated from this portfolio can contribute to profitability, although investment performance is influenced by interest rates and financial market conditions.

September 2026 Quarter Shows Continued Premium Pressure

Helia's third-quarter trading update, released on 30 October 2026, showed that the effects of lower new business volumes continued into the September quarter.

Gross written premium reached AUD 20.9 million during the three months ended 30 September 2026.

This brought total gross written premium for the first nine months of 2026 to AUD 82.5 million.

The corresponding nine-month period in 2025 recorded gross written premium of AUD 176.0 million.

This represents a decline of approximately 53.1%.

The reduction reflected the absence of new CBA business and broader changes affecting demand for lenders mortgage insurance.

Despite lower premium generation, the company continued reporting earnings from its existing insurance portfolio.

Year-to-date net profit after tax reached approximately AUD 136.5 million, compared with AUD 200.9 million in the corresponding period of 2025.

This represented a reduction of approximately 32.1%.

The September quarter contributed approximately AUD 36.5 million in net profit.

The quarterly figures were drawn from the regulatory financial return of Helia's insurance Subsidiary and were unaudited.

Helia maintained its FY26 insurance revenue guidance of AUD 330 million to AUD 360 million following the update.

The company's operating performance continues to reflect the transition from a higher level of new business generation towards a smaller premium base supported by its existing insurance portfolio.

ING Bank Australia Renews Exclusive Insurance Agreement

Helia achieved an important customer retention milestone during July 2026 when ING Bank Australia renewed its exclusive lenders mortgage insurance arrangement.

The agreement commenced on 1 July 2026 and has a minimum term of four years.

Under the arrangement, Helia will continue providing lenders mortgage insurance to eligible ING mortgage customers.

ING represented approximately 22% of Helia's gross written premium during H1 2026.

The renewed agreement therefore provides continuity with one of the company's significant remaining lender customers.

The arrangement is particularly relevant following the loss of CBA's new business.

Maintaining established lender relationships can support future premium generation and reduce uncertainty associated with customer retention.

Helia also reported three exclusive customer contract renewals during the first half of 2026.

These arrangements support the company's position within Australia's lenders mortgage insurance market.

However, future gross written premium will still depend on the volume of eligible loans originated by participating lenders.

A contract renewal does not necessarily guarantee a fixed amount of premium revenue because mortgage insurance demand depends on lending activity and borrower characteristics.

The company continues focusing on customer relationships and identifying opportunities to expand its business with existing and new lending partners.

Government's 5% Deposit Scheme Changes LMI Demand

Government housing policy is another significant Factor affecting Australia's lenders mortgage insurance market.

The expanded Australian Government 5% Deposit Scheme commenced on 1 October 2025.

The scheme allows eligible first-home buyers to purchase a property with a minimum deposit of 5% without paying lenders mortgage insurance.

The government provides a guarantee to participating lenders covering part of the mortgage exposure.

The expanded arrangements removed previous income caps and limits on the number of available places.

These changes increased access to the scheme for eligible borrowers.

However, the initiative also reduced the potential demand for traditional lenders mortgage insurance.

Borrowers who might otherwise have required LMI can instead obtain eligible loans supported by the government guarantee.

For Helia, this represents a structural change in part of its addressable market.

The company previously generated a meaningful proportion of new business from first-home buyers.

During FY25, first-home buyer-related business accounted for approximately 27% of gross written premium.

The expanded scheme is expected to reduce demand from this customer category.

Helia is therefore focusing on other market segments, including homebuyers upgrading to different properties and residential property investors.

However, mortgage insurance demand across these groups will depend on lending policies, deposit levels and individual borrower circumstances.

Competition and Lender Self-Insurance Influence Premium Generation

Competition remains an important consideration for Helia's operating outlook.

Lenders mortgage insurance providers compete for contracts with banks and other financial institutions.

These arrangements can involve exclusive supply agreements covering eligible mortgage lending.

The loss of the CBA contract demonstrates the potential financial effect when a major lender changes insurance providers.

Helia also faces competition from lender self-insurance arrangements.

Under these arrangements, lenders retain some mortgage Credit risk themselves instead of transferring it to an external insurance provider.

The decision to use external LMI or self-insurance depends on the lender's risk management strategy, capital requirements and commercial considerations.

Government-backed housing schemes represent another alternative to traditional mortgage insurance.

Together, these factors have reduced the size of the market available to LMI providers.

Helia is responding by focusing on customer retention, operating efficiency and opportunities in selected lending segments.

The company continues reviewing its commercial approach as it adapts to changes in demand.

Mortgage Claims Remain Relatively Low

Helia's existing insurance portfolio continues benefiting from relatively low mortgage claims activity.

Lenders mortgage Insurance Claims typically arise when a borrower defaults and the proceeds from selling the secured property are insufficient to repay the outstanding loan.

The frequency and severity of claims depend on several factors.

These include unemployment, household income, mortgage repayment obligations and residential property prices.

During recent years, increases in property values have contributed to higher equity levels for many homeowners.

Greater property equity can reduce the likelihood of a loss when a defaulted mortgage is resolved through a property sale.

Low Unemployment has also supported borrowers' ability to meet mortgage repayments.

During H1 2026, Helia recorded a net claims benefit as releases from existing claims reserves exceeded newly recognised claims expenses.

This supported insurance profitability despite lower revenue.

However, claims experience can change as economic conditions evolve.

Higher unemployment, reduced household income or declining residential property values could increase mortgage delinquencies and eventual insurance claims.

Helia continues monitoring these risks through its claims provisions and Underwriting assumptions.

Mortgage Delinquency Rate Reaches 0.83%

At 30 September 2026, Helia reported a 90-day mortgage delinquency rate of approximately 0.83%.

This represented an increase of 4 basis points compared with the preceding quarter.

A 90-day delinquency generally refers to a mortgage that is at least three months overdue.

Delinquency rates provide an indicator of potential future credit stress within an insured Loan portfolio.

However, not every delinquent mortgage results in an insurance claim.

Borrowers may resume repayments, refinance their loans or sell their properties before a loss occurs.

The eventual claims outcome depends on individual borrower circumstances and the value of the secured property.

Helia's delinquency rate remained relatively low compared with historical periods of greater mortgage stress.

The company continues assessing changes in overdue loans, cure rates and property values to determine expected claims costs.

Future trends will depend on economic conditions, borrowing costs and household financial capacity.

Capital Coverage Remains Above Helia's Target Range

Helia maintained a capital position above its board-approved target range during 2026.

At 30 June 2026, the company's prescribed capital amount (PCA) coverage ratio stood at 2.07 times.

The ratio decreased slightly to 2.01 times at 30 September 2026.

Both figures remained above Helia's target range of 1.40 to 1.60 times.

The PCA coverage ratio measures the amount of eligible regulatory capital held relative to the capital required under applicable insurance regulations.

A higher ratio indicates that the insurer holds capital above its minimum regulatory requirements.

Helia's capital position reflects retained earnings, claims experience and its existing insurance portfolio.

However, excess capital may decline as the company makes distributions, repurchases securities or experiences changes in insurance risk.

The company continues assessing its capital requirements in light of changing premium volumes and expected claims obligations.

Maintaining an appropriate level of capital is important because lenders mortgage insurance can involve long-duration exposure to residential mortgage risks.

Dividend Payments and Capital Returns Continue

Helia continued returning capital during H1 2026.

The company declared a fully franked interim ordinary Dividend of 16.0 cents per share.

It also announced an unfranked Special Dividend of 27.0 cents per share.

The combined distributions totalled 43.0 cents per share.

The capital returns reflected Helia's regulatory capital position and financial resources relative to its operating requirements.

During FY25, the company returned approximately AUD 343.5 million through dividends and other capital management activities.

Helia has also announced an on-market buy-back programme of up to AUD 75 million, scheduled for completion by 31 December 2026.

The buy-back forms part of its capital management framework.

However, future capital returns will depend on profitability, regulatory capital requirements and expected claims obligations.

Changes in the PCA coverage ratio may influence the amount of capital available for additional distributions.

The company will therefore need to balance capital returns with investment in its business and the financial resources required to support its existing insurance portfolio.

New CEO Mark Senkevics Takes Charge of Business Strategy

Helia's leadership transition represents an important development during 2026.

Following the departure of former chief executive Pauline Blight-Johnston in 2025, Michael Cant served as interim Chief Executive Officer.

In June 2026, the board announced the appointment of Mark Senkevics as the company's next Chief Executive Officer and Managing Director.

Senkevics subsequently joined Helia in October 2026.

He has more than 30 years of experience across the insurance and Reinsurance industries.

His previous positions include senior leadership roles at Steadfast Group and Swiss Re.

His background includes underwriting, corporate governance, risk management and insurance operations.

The leadership change comes as Helia adapts to reduced premium generation following the loss of the CBA contract.

The company is also managing the effects of government-backed housing schemes and changing lender insurance arrangements.

Senkevics' priorities will include reviewing business strategy, maintaining customer relationships and assessing opportunities for sustainable premium generation.

Craig Ward continues as Chief Financial Officer, supporting the company's financial management and capital allocation activities.

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Operational Efficiency Becomes Increasingly Important

Helia continues reviewing its operating structure as the market for lenders mortgage insurance changes.

The reduction in new premium generation creates a need to align expenses with a smaller business base.

The company has identified opportunities to simplify operating processes and increase automation.

Technology investment may help improve underwriting efficiency, customer servicing and internal administration.

Automated systems can also support the processing of insurance applications and related information.

However, technology changes require implementation expenditure and appropriate risk controls.

Helia must balance cost reductions with the need to maintain underwriting expertise, claims management capabilities and regulatory compliance.

The company's operating efficiency initiatives are particularly important because insurance revenue from existing policies is expected to decline gradually over time.

Reducing recurring expenditure could help manage the financial effect of lower revenue.

However, the eventual earnings contribution will depend on the timing of cost savings and changes in insurance activity.

Housing Market Conditions Remain Important to Claims Performance

Helia's insurance portfolio is closely linked to Australia's residential property market.

The company provides protection against potential mortgage losses, making housing market conditions central to its risk exposure.

Residential property values influence the amount recoverable when an insured mortgage defaults.

If property values decline, borrowers with high loan-to-value ratios may have less equity available to absorb losses.

This can increase the potential severity of insurance claims.

Unemployment is another important factor because Job losses can reduce borrowers' ability to maintain mortgage repayments.

Higher interest rates can also increase debt servicing obligations for variable-rate mortgage borrowers.

However, the impact of interest rates depends on household income, savings and the structure of individual loans.

Helia's existing portfolio has benefited from low claims and equity accumulated through previous property value increases.

Future financial performance will depend partly on whether these conditions continue.

The company monitors economic indicators, delinquency trends and mortgage portfolio characteristics when assessing insurance risks.

Key Risks and Operational Considerations

The loss of new Commonwealth Bank business remains one of Helia's principal operating challenges.

As insurance policies written under the former arrangement gradually mature or expire, associated insurance revenue will decline.

Replacing this revenue will depend on new business generation from other lenders.

Competition from alternative LMI providers, government housing guarantee schemes and lender self-insurance arrangements may limit opportunities for premium growth.

The expanded 5% Deposit Scheme is particularly relevant because it reduces the need for mortgage insurance among eligible first-home buyers.

Economic conditions also present risks.

A rise in unemployment or a decline in residential property values could increase mortgage delinquencies and insurance claims.

Higher claims expenses could reduce earnings and increase regulatory capital requirements.

Investment market movements may also affect returns generated from Helia's financial assets.

The company's capital management programme depends on maintaining capital above regulatory requirements and internal targets.

Consequently, future dividends and other capital returns may be influenced by changes in profitability, claims experience and capital adequacy.

Helia must also manage the operational transition under its new leadership team while adapting to a changing mortgage insurance market.

What Lies Ahead for Helia Group in FY26 and Beyond?

Helia's near-term priorities include managing the gradual reduction in revenue associated with the former CBA contract, maintaining existing lender relationships and identifying opportunities for new premium generation.

The company has maintained FY26 insurance revenue guidance of AUD 330 million to AUD 360 million.

Its existing insurance portfolio continues providing recurring revenue, while relatively low mortgage claims have supported profitability.

The renewed four-year ING Bank Australia agreement provides continuity with an important lender customer.

However, the reduction in gross written premium during the first nine months of 2026 highlights the challenge of replacing lost business.

New Chief Executive Officer Mark Senkevics is leading the company through this transition, with a focus on operating efficiency, customer relationships and business strategy.

Helia's capital position remains above its target range, supporting its current capital management programme.

The AUD 75 million buy-back is scheduled for completion by the end of December 2026.

The company's full-year 2026 financial results, expected in February 2027, will provide further information regarding insurance revenue, premium generation, claims experience and capital adequacy.

Beyond FY26, the financial outlook will depend on the performance of the existing insurance portfolio and Helia's ability to develop new business in a changing mortgage lending environment.

The company has not provided detailed earnings guidance beyond FY26 insurance revenue.

Helia's future operating performance will therefore be influenced by lender customer retention, government housing policies, credit conditions and the effectiveness of its business transformation initiatives.

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