Australian insurer QBE has reported strong gross written premium growth in Q1 2025, up 7% compared to the same period of 2024 to $8.3 billion.
Excluding premium rate increases of 3.4%, QBE noted that ex-rate growth of 7% was driven by ongoing and relatively broad momentum in International and North America.
The firm’s Q1 2025 premium growth also included a ~$100 million drag from the run-off of non-core lines in North America.
Excluding this, QBE’s ex-rate growth was 8% in Q1 2025, and remains at 8% on further excluding Crop.
Disclosing figures on catastrophe losses, QBE said that in the first four months of 2025, the net cost of catastrophe claims totalled approximately ~$420 million, relative to QBE’s first-half catastrophe allowance of $549 million.
“Recent catastrophe activity was driven by the LA wildfires, flooding in Queensland, cyclone Alfred, and a series of convective storm events in North America,” the firm explained.
QBE noted that its net exposure to the LA wildfires remains consistent with that outlined in its FY 2024 results.
The firm continued, “Developments in global trade have been a key focus throughout the period. At present, we expect any underwriting risks associated with initial trade disruption should be limited. Over the near term, the proactive management of any emerging inflationary pressures will be our primary focus.”
Meanwhile, investment returns in Q1 2025 were reportedly positive, supported by favourable interest rates and strong risk asset performance.
QBE stated that the Q1 2025 exit core fixed income yield of 4.1% reduced slightly from the FY24 exit yield of 4.3%.
At the same time, total investment FUM for Q1 2025 was $31.6 billion, increasing from $30.6 billion in FY24, with risk assets now accounting for ~15% of the portfolio.
Lower risk-free rates are said to have resulted in an unrealised gain on core fixed income securities of ~$50M, which was broadly offset by a claims liability discount benefit, resulting in a neutral impact from asset-liability management activities for the quarter.
“Volatility in financial markets increased markedly through April, following the broad correction in response to the US government’s April 2 tariff announcement. Our portfolio has exhibited pleasing resilience through this period and remains conservatively positioned. In the four months to April, preliminary total investment income is currently estimated at ~$410 million,” QBE added.
With all this in mind, QBE has reaffirmed its outlook for FY25, maintaining expectations for constant currency gross written premium growth in the mid-single digits.
This forecast includes a negative impact of $250 million resulting from the non-core run-off in North America. Additionally, QBE anticipates a combined operating ratio of approximately 92.5% for the fiscal year.
