QBE international unit swings back to $418mn H1 profit
QBE’s international unit has reported a first-half pre-tax profit of $418mn, compared with a loss of $57mn in the prior-year period.
The Australian carrier restated its H1 2020 figures for its international and North American segments following a restructure of its reinsurance operations announced early this year.
It also provided its segmental figures for H1 2020 on an ex-Covid-19 basis.
At group level, QBE reported pre-tax insurance profit for H1 of $674mn, again a return to profit compared with a loss in the prior-year period of $584mn.
The group’s earnings per share also returned to positive territory of $28.20, compared with -$0.52 last year.
Combined ratio: The international segment reported a combined ratio of 83.8%, an improvement of 17.3 points on last year’s figure, as the claims ratio improved by 16.6 points to 52.5%. There were also small improvements in the unit’s commission and expense ratio.
At group level, the combined ratio improved by 10.1 points to 93.3%, again thanks mainly to a 17-point improvement to the claims ratio, which reached 61.2%.
GWP: The international segment increased top line by 16.8% to $3.9bn, while the group increased gross written premium by 27.4% to $10.2bn.
Cat losses: QBE reported cat claims for H1 of $462mn, or 7% of its net earned premium, up from $308mn, or 5.5%, in the prior-year period (excluding Covid-19 losses) and 1.6% above the group’s natural catastrophe allowance. The cat losses stemmed largely from Winter Storm Uri and widespread flooding in Australia.
Rates: The international unit reported an average annual renewal premium rate increase of 10.5% compared with 10.1% increases in the prior-year period.
Interim CEO Richard Pryce said: “Notwithstanding the heightened level of catastrophes during the half, which remain a major issue for the industry, I am very pleased with the improvement in the underwriting result and the strong but targeted premium growth.
“While we continue to benefit from meaningful compound premium rate increases in all our geographies, there are signs pricing momentum is moderating, particularly in international markets.
“Regardless, we will remain vigilant in balancing premium growth and pricing adequacy for an appropriate risk-adjusted return on capital, with claims inflation and catastrophe costs key areas of ongoing focus.”