Helia Group (ASX:HLI) reported a strong financial and operating performance for the 2025 full year, even as management pointed to significant industry and company-specific change, including the loss of its largest customer, Commonwealth Bank. On the earnings call, Interim CEO Michael Cant and Interim CFO Craig Ward attributed results largely to favorable economic conditions, very low claims experience, and cost reductions, while flagging a more challenging outlook for new business volumes due to the expanded federal government 5% deposit scheme and shifting lender behavior.
FY2025 results and shareholder returns
Cant said Helia delivered statutory net profit after tax (NPAT) of AUD 245 million, up 6% year over year. On an underlying basis, NPAT was AUD 247 million, up 12%. Earnings per share were AUD 0.899, up 18%, and return on equity was 23.5%.
Claims, arrears, and credit conditions remained benign
Management emphasized that macro conditions were supportive in 2025, pointing to a resilient labor market, low unemployment, and dwelling values rising nationally. Cant said the Reserve Bank of Australia reduced the cash rate during the year, providing some mortgage rate relief for borrowers, contributing to “another year of very low claims and strong profits.”
Ward said the claims outcome was a key driver of earnings. Insurance service expense fell to AUD 42 million, reflecting negative total incurred claims of AUD 63 million for the year. He attributed the outcome to lower current period incurred claims, favorable experience, and reserving basis requirements.
Key claims and delinquency metrics disclosed on the call included:
- Claims paid: 117, down 30%
- Mortgages in possession: 150, down 6%
- Net claims paid: AUD 14.8 million
- New delinquencies: down 14%
- Total delinquencies: down 15% over the year (per Cant)
Ward said many delinquent loans were curing through borrower sales “without any actual loss being incurred.” He also noted that Victoria’s delinquencies remained elevated, while New South Wales, Queensland, and Western Australia improved through the year.
The company also changed how it reports delinquency rates, moving to a single-policy basis rather than counting top-ups as separate policies. Ward said the change increases the reported rate but is “presentational only” and has no impact on results or performance.
New business: strong FY2025 premium growth, but headwinds ahead
Despite a benign credit environment that management said has been challenging for new LMI business, Helia reported strong gross written premium (GWP) growth in FY2025. Ward said FY2025 GWP rose 23% to AUD 240 million, with volume contributing AUD 33 million and rate and mix adding AUD 13.5 million. He noted a shift toward investor lending influenced the mix.
However, Ward said insurance revenue declined 5% to AUD 372 million, reflecting structurally lower levels of new business in recent years and the growing role of the government scheme, which management said gradually flows through revenue over time. Contractual service margin (CSM) recognized increased 6% to AUD 160 million due to improved in-force profitability, and Ward said CSM remains a significant store of future profit at AUD 690 million, with approximately AUD 145 million expected to emerge over the next 12 months (excluding new business).
Management highlighted structural pressure on the private LMI market from two sources: increasing lender self-insurance/waivers—particularly among major banks—and the expanded government 5% deposit scheme. Cant said that in the 2024–2025 year, loans guaranteed by the government scheme were approximately 65% of the new lending insured by the entire mortgage insurance industry. From October 1, 2025, the scheme expanded further with removal of income tests and an uncapped number of places; Cant said Helia expects first home buyers to be “only a minor part” of the private LMI market from 2026.
Cost reductions, capital strength, and FY2026 guidance
Helia outlined cost actions aimed at aligning its expense base with a smaller market. Cant said Helia started its simplification and efficiency efforts 12 months ago and achieved an AUD 15 million reduction in recurring expenditure during 2025, with further efficiencies anticipated in 2026. He also said the company is increasingly using AI to reduce complexity and increase automation.
Ward reported income statement expenses decreased 8% to AUD 124 million, while expenditure incurred was AUD 114 million, which he said better reflects the underlying cost run rate. Cant added that expenditure incurred for 2025 was down 14% year over year, and closing full-time equivalent headcount was down 17%.
On capital, Cant said the year-end PCA coverage ratio was 2.03x, above the company’s target range of 1.4x–1.6x. In Q&A, management confirmed the target range remains unchanged and said it was omitted from slides simply because it has been consistent for several years. Ward said the PCA ratio declined from 2.3x at half year due to Tier 2 redemption and dividends, while the prescribed capital amount remained broadly steady. After allowing for year-end dividends, he said the pro forma PCA ratio was 1.73x.
Looking to FY2026, Cant said GWP is expected to fall due to the loss of Commonwealth Bank new business and the expanded government scheme, while the impact on insurance revenue will be more gradual. Helia guided to FY2026 insurance revenue of AUD 320 million to AUD 370 million. Cant also said total incurred claims in 2026 are expected to be “well below” the company’s through-the-cycle average, while noting cost-of-living pressures and higher interest rates could add pressure to household budgets.
In Q&A, management said reserving is set on a through-the-cycle basis and is not “super sensitive” to near-term 25–50 basis point rate changes, though interest rates remain an important variable influencing claims over time.
Governance and sustainability updates
Cant said Helia supported more than 36,000 Australians into homeownership in 2025 and discussed climate-related risk work, including refining modeling of climate impacts on the mortgage portfolio and integrating climate considerations into risk appetite.
He also addressed governance enhancements following an independent review of employee share trading. Cant said no breach of law or policy was identified, but the board strengthened controls, tightened trading window protocols, and reinforced governance oversight, and said those changes are now embedded.
About Helia Group (ASX:HLI)
Helia Group Limited, together with its subsidiaries, is involved in the loan mortgage insurance business primarily in Australia. The company facilitates residential mortgage lending by transferring risk from lenders to lenders mortgage insurance (LMI) providers, primarily for high loan to value ratio residential mortgage loans; and portfolio of seasoned home loans. Helia Group Limited was formerly known as Genworth Mortgage Insurance Australia Limited and changed its name to Helia Group Limited in November 2022.
