The shares of Genworth Mortgage Insurance Australia (ASX: GMA) are likely to come under a lot of focus today after the company reported a reasonably strong result for the first half of FY 2016.

Here are some of the highlights:

  • Gross Written Premium of $189.8 million – Dropped 33.5% year on year on the prior corresponding period (pcp).
  • Net Earned Premium of $228.8 million – Increased 1.4% from $225.7 million pcp.
  • Reported NPAT of $135.8 million – Increased 20% from $113 million pcp.
  • Underlying NPAT of $112.9 million – Declined 15% from $132.9 million pcp.
  • Portfolio delinquency rate of 0.43% – Increased 3 basis points pcp.
  • Special dividend of 12.5 cents per share

Although the company delivered strong reported net profit after tax growth of 20% over the first half of FY 2015, I was slightly disappointed to see its core business struggling.

The first half increase in reported profit is largely the result of favourable mark-to-market movements in its investment portfolio. This more than compensated for the drop in its core business, which saw underwriting profit fall 15.6% to $97.6 million for the period.

Whilst the 33.5% drop in gross written premium is quite alarming, it is to be expected considering the broader industry trend of a reduction in the proportion of mortgage originations above a 90% loan-to-value ratio.

This has been the result of regulatory changes and a change in lender risk appetite. Unfortunately for shareholders I wouldn’t expect to see this change any time soon. In fact, I feel it is likely to continue to see a decline in its average loan-to-value ratio as lenders’ appetite for risk lowers.

But management appeared to be pleased with the results and the resilience of the business in a challenging environment. It advised that its performance was in line with expectations and maintained its full year guidance.

As well as announcing a fully franked 14 cents per share interim dividend, it also revealed its plans to pay a fully franked special dividend of 12.5 cents per share to shareholders no the register as at August 17. By annualising the interim dividend and adding in the special dividend, investors are looking at an estimated fully franked full year dividend of 14% based on the last close price.

With such an incredible yield it is unsurprising to see its shares are rocketing higher in early trade. Considering the recent rate cut yesterday, Genworth Mortgage Insurance Australia is no doubt an attractive option for income investors and arguably a better option than fellow insurers QBE Insurance Group Ltd (ASX: QBE) and Insurance Australia Group Ltd (ASX: IAG).

Finally, if you're looking for even more dividend options then I would highly recommend these three shares. Each is growing their dividend at a solid rate and could easily become a key part of your portfolio in the future in my opinion.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.