QBE Insurance reports solid Q3 growth, GWP up 7%

QBE Insurance has delivered a strong third-quarter performance, with gross written premiums (GWP) climbing 7% over the previous year, buoyed by a favorable premium rate environment that is expected to persist into 2024. The company’s renewal rates have risen by an average of 9.6%, underpinning a robust pricing strategy and consistent customer retention.

The insurer, which operates in key markets such as North America and Asia Pacific, managed to keep catastrophe claim costs within its forecasted $1.3 billion for the fiscal year 2023, totaling around $950 million up to October, despite facing multiple hurricanes and other natural disasters across Europe and North America.

Investment outcomes for the insurer remained positive through the quarter, with solid fixed income returns contributing to a slight uptick in the core fixed income running yield to 5% by quarter’s end. QBE’s total funds under management (FUM) increased to $28.2 billion, with risk assets constituting about 13% of their portfolio.

Looking ahead, QBE anticipates a constant currency GWP growth rate of around 10% for FY23 and is projecting a group combined operating ratio at approximately 94.5%. This projection does not include the impact from the first half’s reserve transaction.

Claims inflation has been consistent with prior reports but is showing signs of pressure on current year results due to persistent inflation in specific portfolios. For instance, Australia Pacific personal lines are experiencing strain, as are some North American lines impacted by lower commodity prices and drier weather conditions.

The North America crop business is preparing for a challenging outcome with its combined operating ratio projected to be between 93-97%, reflecting agricultural market pressures.

In light of these developments, QBE’s share price has seen an appreciation of approximately 20% this year, signaling investor confidence in the company’s performance and strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.