Share Price Catalysts, page-24

My view is pretty much aligned on the points raised but on point 4 I think there is a prudent defensive strategy behind the focus on innovation and recent board appointments.

The current LMI arrangements in Australia amongst most of the providers and their lending customers is essentially third line forcing. I'm sure that GMA and all other providers would have a coherent argument as to why these arrangements aren't third line forcing but my opinion is that the arrangements fail a very simple test.

If I am a prospective high LVR borrower a bank agrees to lend to me on the condition that I take this LMI policy instead of a LMI policy.

I think the current exclusive arrangements would stand up to about 15 minutes of objective scrutiny by the ACCC.

So with this in mind, it's not hard to imagine a future where an individual borrower has some agency in the decision on which LMI policy to buy and having established products like such as GMA's "pay by the month" until you reach a certain LVR or premium cap would be attractive to individuals. Also building capability to sell directly to borrowers (QBE would have a walk up start here) would be critical too.

In fact if the CBA renewal had not been signed I was expecting GMA to light the fuse to blow the whole thing up, no need now.

So the innovation and customer focus seems a little fluffy and indulgent in the way it is pitched but it is defensive in anticipation of future reform.

The reform that dare not speak its name.