QBE Insurance Group Limited has reported a net profit after tax of $390 million (which includes $567 million of profit from continuing operations) for 2018 compared with a loss of $1.3 billion in 2017, driven by a significantly improved attritional claims experience as well as a reduced level of catastrophe claims.
For the full-year 2018, QBE’s combined operating ratio reached 95.7%, which compares to 103.9% a year earlier, and, which was underpinned by a 3% improvement in its attritional claims ratio to 50.2%.
Total catastrophe claims for QBE in 2018 declined to $523 million, while total large individual risk claims reached $640 million. Combined, QBE experienced total individual risk claims and catastrophe claims of $1.16 billion in 2018, compared with $1.8 billion a year earlier.
Group-wide, QBE witnessed rate increases of an average of 5%, compared with 1.8% a year earlier, driven by improved pricing conditions across all business segments.
QBE Group Chief Executive Officer (CEO), Pat Regan said: “The actions we have taken to simplify the Group, implement a rigorous performance management framework and upgrade core capabilities in pricing, risk selection and claims management delivered meaningful improvement in the underlying quality of our business and our financial performance in 2018.”
For 2018, QBE’s underwriting profit improved substantially to $480 million, compared with an underwriting loss of $507 million a year earlier. QBE’s Insurance profit totalled $826 million in 2018, which compares to a loss of $60 million in 2017.
Net earned premiums grew 3% year-on-year to more than $11.6 billion, with 92% of this coming from direct and facultative insurance, and 8% from inward reinsurance.
The company commented on its reinsurance utilisation and the fact that as announced in December of last year, it has established a simpler, more sustainable reinsurance structure.
“I am pleased with the progress made against our objectives in 2018. Significant portfolio rationalisation and simplification, successful placement of the restructured 2019 reinsurance program, divisional consolidation and initiation of a three-year operational efficiency program position us well to deliver further value for our shareholders in 2019,” said Regan.
The firm’s Chairman, W. Marston Becker, added: “Our improved performance in 2018, coupled with a more simplified structure and focus on achieving cost reductions across the Group, positions QBE well.
“In 2019, we will continue to drive further performance improvement, increase the use of data analytics and digital tools in our underwriting, strengthen earnings quality, target further improvements in our return on equity and, most importantly, continue to deliver value for our shareholders.”
