Helia Group Limited (ASX: HLI) has announced that its long-standing partnership with the Commonwealth Bank of Australia (CBA) is likely coming to an end. CBA has advised that it has entered exclusive negotiations with an alternative provider for its Lenders Mortgage Insurance (LMI) services, and if those talks succeed, Helia’s Supply and Service contract will not be renewed beyond its current expiry date of 31 December 2025.
A 50-Year Partnership Nearing Its Close
Helia CEO and Managing Director, Pauline Blight-Johnston, acknowledged the disappointment of the news, saying:
“Together, CBA and Helia have helped hundreds of thousands of Australians buy homes over the last 50 years… We would have welcomed the opportunity to continue our partnership.”
Despite the setback, Helia emphasized that it remains committed to maintaining high service standards for both CBA and its borrowers until the end of 2025.
Financial Impact to Be Gradual
While this development is significant, Helia notes that the financial effect will unfold slowly. Under AASB 17 accounting rules, revenue from the LMI business will continue to be recognised over the next 15 years, based on in-force policies.
Importantly, the LMI business underwritten for CBA made up approximately 44% of Gross Written Premium (GWP) in FY24, but Helia says its previously issued guidance remains unchanged.
Looking Ahead: New Opportunities and Capital Flexibility
Helia is already taking steps to adapt its business model to the expected reduction in future GWP, while exploring new and existing lender partnerships.
The potential absence of new CBA business from FY26 could also increase Helia’s organic capital generation, creating more flexibility for capital management initiatives. The company reiterated its commitment to return to and operate within its Board’s target PCA range of 1.40 – 1.60x.
Helia remains focused on delivering market-leading LMI services, and while this marks the end of an era, the company appears ready to pivot and pursue new growth paths.
