QBE announced net profit after tax of $400 million for the first half of 2023, compared with $48 million in the same six-month period last year.
The rise mainly owed to an H1 investment income of $662 million, versus a loss of $20 million last year, reflecting the significant increase in interest rates over the period and a gain of $52 million from tighter credit spreads.
QBE’s combined operating ratio increased to 98.8% from 94.9% in the prior period, reflecting the impact of catastrophe costs which exceeded the first half allowance, and largely catastrophe related prior year development. This includes the upfront cost of the $1.9 billion reserve transaction of $98 million, which impacted the combined operating ratio by 1.2%.
“While underwriting performance was challenged by catastrophe events, we are encouraged by our ongoing business momentum and remain confident in the outlook. I’m pleased with the progress we’ve made across our strategic priorities, and with our efforts concentrated around building a more resilient business,” said QBE Group CEO Andrew Horton.
Adjusted cash profit after tax increased to $405 million from $66 million in the prior period, resulting in an adjusted cash return on equity of 10.1%, compared to 1.7% in the prior period.
Strong premium growth continued, with group-wide renewal rate increases of 10.2% in H1’23, which supported gross written premium growth of 13%.
The board has declared an interim dividend of 14 Australian cents per share, compared with the 2022 interim dividend of 9 Australian cents per share.
“Challenges from catastrophe events over the period serve to reinforce our focus and aspiration to build a more resilient and consistent business. While I’m pleased with the progress we’ve made across our strategic priorities, our performance this half highlights there is more work to be done,” Horton added on QBE’s new strategic priorities.
“Our strategy to improve balance and returns in North America remains the primary focus for the Board and management. While our core business in North America is now in better balance, we remain focussed on portfolio quality, further reducing catastrophe exposure and better managing volatility.”
QBE has announced the appointment of Peter Burton as the Group Chief Underwriting Officer. Burton brings over 15 years of experience with QBE, presently guiding the International Markets division.