Shares in mortgage insurer Genworth are free falling as Westpac withdraws it business

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Shares in Genworth, Australia’s biggest mortgage insurer, slumped more than 20% after Westpac withdrew its business.

Westpac, after a strategic review, gave 90 days notice to terminate Genworth providing lender mortgage insurance for home loans with loan-to-valuation ratio of more than 90%.

Genworth says this will mean a 14% fall in gross written premiums, which in 2014 totaled $634.2 million. The full effect is likely to be felt in the 2016 financial year and beyond.

The company has commercial relationships with more than 100 lenders across Australia and has about 44% of the mortgage insurance market.

Genworth last week reported net profit of $172.7 million for the six months to the end of December.

The company’s shares closed down more than 22.79% to $3.32.