QBE Insurance Group Limited (QBE) has reported a 29% rise in net after-tax profit for the first-half of 2019 to $463 million, driven by a significant improvement in attritional claims experience across all divisions.
Supporting the improved attritional claims experience in the period, QBE’s net investment return increased to almost 7% in H1 2019, compared with 2.1% in the same period in 2018.
The attritional claims ratio declined from 51.3% in H1 2018 to 47.7% in H1 2019, although this was partly offset by a greater net cost of large individual risks and catastrophe claims as a result of the renegotiation of QBE’s reinsurance programme.
Overall, the Group recorded a combined ratio of 95.2% for the first-half of the year, which is lower than the mid-point of its FY19 target range and an improvement on the 95.8% posted in H1 2018.
QBE states that the underwriting result is even more impressive in H1 2019 as it includes a lower contribution from its North American Crop insurance business, and also by normalisation in its Australian lenders’ mortgage insurance (LMI) business.
QBE Group Chief Executive Officer (CEO), Pat Regan, said: “The Group’s half year financial performance reflected a further significant improvement in attritional claims experience across all divisions coupled with materially stronger investment returns. These were partly offset by an anticipated increase in the net cost of large individual risk and catastrophe claims following the successful renegotiation of the Group’s reinsurance program.
“We began 2019 with positive momentum and a clear strategy to drive further performance improvement across the business and deliver greater shareholder value. We have made good progress through the first half, with the interim combined operating ratio comfortably within our full year target range and the Group generating a double-digit return on equity.”
On a constant currency basis, the firm’s gross written premiums grew 1% in the period while net earned premiums increased by 5%, when compared with H1 2018.
QBE states that during the period group-wide premium rate increases averaged 4.7%, which is a slight improvement on the 4.6% posted last year.
“With a strong first half result now behind us and our 2019 full year guidance unchanged, through the second half of 2019 we will continue to build on the good progress we have made against our priorities,” said Regan.
The firm expects to record a combined ratio of between 94.5% – 96.5%, and a net investment return of between 3% – 3.5% for the full-year 2019.
