S&P Global Ratings has lowered its insurer financial strength and issuer credit ratings for the Australian and NZ operations of Genworth Financial Mortgage Insurance, and for QBE Lenders' Mortgage Insurance, from 'A+' to 'A'. S&P has also lowered the rating on Genworth Australia's subordinated debt to 'BBB+' from 'A-' with a stable outlook.The downgrades reflects the S&P view that both operators face declining competitive positions within the local market, primarily due to lack of business diversity as monoline insurers.In addition, the ratings agency said that its downgrades "reflected weakened market conditions for lenders' mortgage insurers due to a lower market appetite for high loan-to-value ratio bank lending, restrictions on mortgage broker commissions, and more onerous loan servicing assessments" which have all led to a structural decline in new business volumes.These may be further impacted by introduction of a government-backed loan deposit scheme for first home buyers.The S&P outlook for both lenders' mortgage insurance providers is stable, which reflects the ratings agency's expectation that LMI earnings will stabilise over the next two years."Improved market momentum, which will be aided by lower interest rates, the incremental loosening of regulatory lending constraints, and greater certainty around tax settings for investors, would support the outlook. "However, we expect new business volumes to remain at lower levels," S&P observed.