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QBE profit fails to impress

QBE shares slumped almost 9% on Friday despite reporting a material turnaround in underwriting profitability for FY21 versus last year.


The insurance giant announced an FY21 statutory NPAT of $750 million, compared with a net loss after tax of $1,517 million in FY20.


The figure was the result of favourable insurance trading conditions throughout 2021, supporting the company’s focus on driving further improvement in profitability while also achieving targeted growth.


Gross written premiums grew by 22% to $18,457 million reflecting the strong premium rate environment as well as improved customer retention and new business growth across all regions.


The company said premium rate increases are ongoing with group-wide renewal rate increases averaging 9.7% during the year consistent with the first half of FY21. While premium rate momentum moderated slightly in International across the year, momentum accelerated in North America and Australia Pacific during the second half.


In January, QBE launched a new vision, purpose and set of strategic priorities focused on; portfolio optimisation, sustainable growth, bringing the enterprise together, and modernising the business, its people and culture.


Looking ahead the company expects gross written premium growth to be in the high single digits in 2022. Moreover, delivery against strategic priorities should result in an improved and more consistent return profile over time such that the group is capable of consistently delivering a low to mid-90’s combined operating ratio.


QBE Group CEO, Andrew Horton, commented: “Our new purpose, vision and strategic priorities will guide our strategic plan, building on the momentum evident in our FY21 financial result as we seek to further strengthen and grow our business for the future. In doing so, we will drive greater consistency and collaboration, support the integration of sustainability across all facets of our business and continually evolve the experience we provide our people, customers and partners.”