Fitch Ratings has downgraded QBE Lenders Mortgage Insurance Ltd and revised the outlook for Genworth Financial Mortgage Insurance to negative. The ratings agency is concerned about competitive threats in the sector and a weak housing market.Fitch downgraded QBE LMI's insurer financial strength rating from AA- to A+ following its assessment that "competitive threats to and within Australia's LMI sector have increased."Fitch expects QBE LMI's financial performance to "moderate somewhat" but remain "very strong".It says the insurer is susceptible to a systemic downturn in the housing market, the entrance of a new competitor this year, regulatory changes and more self-insurance.It estimates that QBE LMI has a 25 per cent market share. Its gross written premium fell 16 per cent last year.Fitch affirmed Genworth's insurer financial strength rating at A+ but revised the outlook from 'stable' to 'negative'.It says Genworth's financial performance and earnings metrics have deteriorated. Its return on equity dropped from 8 per cent in 2017 to 4 per cent in 2018. Its combined ratio was 85 per cent in 2018, compared with an average of 59 per cent between 2016 and 2017.Fitch says: "We expect [Genworth's]underwriting performance to remain weak over the next 18 to 24 months due to pressure on the top line and a softer housing market in Australia."Fitch's view is that intensified regulatory scrutiny of mortgage lending practices and bank risk profiles has reduced the volume of higher loan-to-valuation ratio mortgages being originated. This, together with increased lender risk retention, has lowered premiums."We believe LMI sector premiums and profit levels may not recover meaningfully anytime soon," it says.