Moody's Investor Service has upgraded the outlook for Genworth Australia's A1 credit rating to stable from negative and has upgraded the outlook for QBE Lenders Mortgage Insurance's (QMI) Aa3 rating to stable from negative.

Moody's said the economic outlook and the housing market in Australia had improved. It also noted the removal of competitors during the crisis, which left them both in stronger competitive positions.

Genworth and QMI are the two major providers of mortgage insurance in New Zealand.

"The change in outlook is based on improvements in the company's operating environment and its financial profile (including increased external reinsurance protections), reflecting in turn improvements in demand for mortgage insurance, and profitability," Wing Chew, a
Moody's Vice President and Senior Analyst said of the Genworth outlook change.

"The continued strong profitability is due to a combination of company initiatives on pricing and underwriting; the restrained nature of the economic downturn in Australia; and the rapid recovery in the housing market," Chew said.

"Australia has been able to stabilize its financial and credit markets through a combination of monetary and fiscal policies," Chew said.

Moody's made identical comments about QMI's rating.

Here is an article from Insurance Editor John Grant detailing Lenders' Mortgage Insurance in New Zealand.

This was first published this morning in our Daily Banking and Finance newsletter, which is for our paying subscribers. Find out more here.