QBE’s profit more than doubles to $802m in H1’24

Australian insurer QBE has reported a statutory net profit after tax of $802 million for the first half of 2024, compared with $400 million last year, as the combined ratio improved to 93.8% from 98.8% on the back of lower catastrophe costs, more stable reserve development, and supportive premium rate increases.

QBE has reported a strong performance for the first half the year, as both the underwriting and investment result strengthened.

The firm’s gross written premium increased by 2% to $13 billion compared to $12.8 billion in H1 2023.

Group-wide premium rate increases averaged 6.7% compared with 10.2% in the prior period. This was driven by short-tail lines in North America and Australia Pacific.

QBE has disclosed H1 2024 net catastrophe costs of $527 million, or 6.2% of net insurance revenue, so comfortably within allowance and reduced from 8.7% in the prior period. The costs reflected the civil unrest in New Caledonia and elevated storm activity globally.

Additionally, the carrier has revealed a modest unfavourable central estimate development of $18 million, which was more than offset by $300 million of favourable development related to the unwind of prior year risk adjustment.

The insurer’s net insurance revenue grew to $8.5 billion in H1 2024 compared to last year’s $7.97 billion. The firm’s adjusted return on equity for H1 2024 was 16.9%, compared to 10.1% last year.

Looking at investments, QBE has reported total investment income for H1 2024 of $733 million compared with $662 million last year.

Andrew Horton, Group Chief Executive Officer commented: “We have seen a positive start to the year, highlighted by further improvement in underwriting performance and strong return on equity. We have taken further steps to reduce volatility and ensure better performance in North America, and remain excited about the outlook for our business.

“We announced our decision to commence an orderly closure of North America middle-market, which supports our continued focus on portfolio optimisation and improving performance in North America. This will allow us to refocus our North America strategy on those businesses which hold more meaningful market position, relevance and scale.”

“We delivered a series of important initiatives through the period to support greater resilience and consistency. The shape and health of our underwriting portfolio has improved materially over recent years, and as a result, our priorities are becoming more future-focused.

“I’m pleased with the improved alignment and connectivity across the enterprise. Our people remain highly engaged, and we are building a high-performing, purpose-led organisation. We’ve made good progress on each of our six strategic priorities in the period, which are the foundations to support our vision of being the most consistent and innovative risk partner. Following a good start to the year, we are on track to deliver our plan in 2024, which will build on our recent trend of improved and more consistent financial performance,” Horton concluded.

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