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Research Update: QBE Lenders' Mortgage Insurance 'A' Ratings Affirmed, Outlook Stable


  • On July 24, 2022, we revised our IICRA for the Australian mortgage insurance sector to low, from intermediate.
  • We are affirming our 'A' financial strength and issuer credit ratings on QBELMI, with no effect on the ratings from the revised IICRA.
  • We are also affirming our 'A' financial strength and issuer credit ratings on QBE MI Asia, a subsidiary of QBE LMI.
  • The stable outlook on both entities reflects the stable outlook on their ultimate parent, QBE, as well as QBELMI's stand-alone strengths, which we expect the insurer will maintain over the next two years.

Rating Action

On Aug. 31, 2022, S&P Global Ratings affirmed its 'A' financial strength and issuer credit ratings on QBE Lenders' Mortgage Insurance Ltd. (QBELMI). The outlook is stable.

At the same time, we affirmed our 'A' ratings on QBE Mortgage Insurance (Asia) Ltd. (QBE MI Asia), a core subsidiary of the QBE Lenders' Mortgage subgroup. The outlook is stable.


The affirmation of the ratings on QBELMI follows the revision of our insurance industry and country risk assessment (IICRA) for Australia's mortgage insurance sector to low risk, from intermediate risk (see "Risks Ease For Australia's Mortgage Insurers," published July 24, 2022).

We affirmed the ratings on QBELMI as the revised IICRA has no impact on the ratings. The IICRA score improvement to low risk from intermediate risk does not change our business risk profile given our assessment of QBELMI's competitive position as strong.

The 'A' rating on QBELMI reflects the insurer's 'a' stand-alone credit profile (SACP). This assessment is driven by its strong market position, as the second-largest mortgage insurer in Australia, and strong capital position. QBELMI's SACP is further supported by its strong profitability, with its solid earnings in 2021 to carry over into 2022.

We assess QBELMI as core to the QBE Lenders Mortgage subgroup, as it comprises the bulk of its earnings and capital. In turn, we assess the QBE Lenders Mortgage subgroup as highly strategic to QBE Insurance Group Ltd. (QBE Group; core operating entities rated 'A+'). While supportive, this group ownership provides no ratings uplift.

We affirmed the ratings on QBE MI Asia to reflect our view that it is a core subsidiary of the QBE Lenders Mortgage subgroup. We view QBE MI Asia, a Hong Kong-based mortgage insurer, as an integral part of the Lenders Mortgage subgroup and expect that it would receive extraordinary support from the subgroup, and the broader QBE Group, if required.



Our stable outlook on QBELMI reflects the outlook on QBE, as well as QBELMI's stand-alone credit strengths, which we expect it will maintain.

Downside scenario

Although unlikely, we could lower the ratings on QBELMI over the next two years if we lower the ratings on QBE's core subsidiaries to below the 'A' level.

We could lower QBELMI's SACP, with a neutral impact on the rating, if:

  • We assess the insurer's prospective capital adequacy to be below the 'A' level under our global mortgage insurance capital model; or
  • Its business risk profile deteriorates due to materially weakened operating performance relative to our expectations.
Upside scenario

We could raise the rating on QBELMI over the next two years if we:

  • Raise the rating on QBE;
  • Assess the QBE Lenders Mortgage subgroup's group status to QBE group to have strengthened to core; or
  • Assess QBELMI's SACP as having improved.

We could revise QBELMI's SACP upward, and subsequently raise our rating on the insurer, if our assessment of QBELMI's prospective capital adequacy improves to the 'AA' level or stronger.


The stable outlook on QBE MI Asia reflects the outlook on QBELMI, as well as our view that the insurer will remain a core subsidiary of the QBE Lenders Mortgage subgroup over the next two years.

Downside scenario

We could lower the ratings on QBE MI Asia if:

  • We lower the ratings on QBELMI; or
  • QBE MI Asia's group status to the QBE Lenders Mortgage subgroup weakened.
Upside scenario

We could upgrade QBE MI Asia if we raise the ratings on QBELMI.

Ratings Score Snapshot

To From
Financial strength rating A A
Anchor a a
Business risk Strong Strong
IICRA Low Intermediate
Competitive position Strong Strong
Financial risk Strong Strong
Capital and earnings Strong Strong
Risk exposure Moderately low Moderately low
Funding structure Neutral Neutral
Modifiers 0 0
Governance Neutral Neutral
Liquidity Exceptional Exceptional
Comparable ratings analysis 0 0
Support 0 0
Group support 0 0
Government support 0 0
IICRA--Insurance Industry And Country Risk Assessment.
ESG credit indicators: E-2, S-2, G-2

Related Criteria

Related Research

Ratings List

Ratings Affirmed

QBE Lenders' Mortgage Insurance Ltd.

QBE Mortgage Insurance (Asia) Ltd.

Issuer Credit Rating
Local Currency A/Stable/--
Financial Strength Rating
Local Currency A/Stable/--

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Primary Credit Analyst:Julian X Nikakis, Sydney (61) 2-9255-9818;
Secondary Contact:Michael J Vine, Melbourne + 61 3 9631 2013;

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