Shares in Genworth Mortgage Insurance have plunged after the company warned of a decline in premium income due to higher delinquencies in mining-related regions across Queensland and Western Australia.
Genworth expects net earned premium - the amount collected over time - to decline by approximately five per cent from 2015's $469.9 million after its third-quarter profit dropped nearly 30 per cent.
The company says net profit for the three months to September 30 dropped 28.7 per cent to $46.7 million, compared to $65.5 million for the same period a year earlier.
Net profit for the year to date is still up 2.3 per cent on the 2015 financial year, but Genworth warns that it expects the elevated number of delinquencies in mining-related regions to continue at least through the final quarter of the year.
"Queensland and Western Australia continue to have elevated delinquency development from economic pressure, in particular in mining-related regions," Genworth chief executive Georgette Nicholas said.
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"During this cycle our focus continues to be on maintaining our risk management discipline and helping our lenders support borrowers in hardship."
Genworth also flagged a full-year loss ratio - an indicator of claim levels - of about 35 per cent, up from 24 per cent in FY15.
Its shares dropped 23 cents, or 7.6 per cent, to $2.79.
