QBE firm faces downgrade over housing market exposure

QBE Lenders’ Mortgage Insurance Limited has been put on review for a possible downgrade of its financial strength of Aa3 over concerns of a declining Australian housing market.

QBE’s loan mortgage insurance lender is rated by Moody’s. The QBE subsidary was one of several firms told a review will take place of its rating.

Senior credit officer Illya Serov said: “During the loan mortgage insurance review, we will primarily focus on the sufficiency of the loan mortgage insurer’s capital levels in the event of an extended downturn in the Australian housing market.

“Australian mortgage insurers are some of the highest rated financial institutions in the Moody’s rating universe, and our modeling indicates that on a stand-alone basis their ratings may be more appropriately positioned in, or close to, the low single-A range.”