Why are Genworth (GMA) shares falling today?
GMA -13.78%: Genworth Mortgage Insurance (GMA) has pullback to 6 month lows today after CBA requested they submit a proposal to continue their current relationship beyond the current deal, expiring December 2022. The current set up, which has been in place since 2006, gives GMA exclusivity over CBA’s book, and accounted for 57% of the total gross written premium (GWP) for the GMA in FY20.
The announcement doesn’t confirm that CBA will terminate the deal, or extend it on perhaps more favorable terms for the bank. It does highlight the significant risk to GMA’s earnings given such a large portion is sourced from just one channel.
