QBE Insurance Publishes 2019 Annual General Meeting Presentation

Today on, 9th May 2019, QBE Insurance Group Limited (ASX:QBE) publishes 2019 Annual General Meeting presentation, where it highlighted to have improved on the combined operating ratio of 95.7% in 2018 as compared to the year 2017. The company witnessed modest growth in both gross written and net earned premium. Cash profit after tax was reported at $715 million as compared to the cash loss of $262 million in the year 2017. Net profit after tax for the period was reported at $390 million as compared to the loss of $1,249 million in the prior year. Company’s cash profit return on equity was reported at 8%, significantly better than 1.4% loss in the year 2017.

In order to achieve a better rate of return, the company exited regions, portfolios, and countries, where it lacked the scale or where the company was not able to achieve an acceptable rate of return. The year unfolded many challenges, while many tragic incidences were reduced compared to the recorded losses that impacted the entire global insurance and reinsurance market in 2017, events were nevertheless still elevated from historical norms. The group witnessed Hurricanes and devastating wildfires in the US, typhoons in Japan, a windstorm in Canada and the drought here in Australia, as well as localised storms, including a hail storm in Sydney, were just some of the events that had severe and often tragic consequences for the local communities and have caused widespread property and infrastructure damages for many of its customers.

Despite all such challenges, QBE provided all kinds of support to its customers to get them back on their feet. The company has continued this work in 2019, where it experienced a number of severe catastrophe incidents, including serious storm events and bushfires in Australia, and of course, the devastating floods in Townsville.

As for the adjusted operating results, Gross Written Premium (GWP) for FY18 was reported at $13,657 million compared to $13,328 million in FY17. The group’s Net Earned Premium (NEP) was reported at $11,830 million in FY18 as compared to $11,768 million in FY17, with net claim ratio of 64% compared to 71.5% in FY17. QBE’s net commission ratio for FY18 stood at 16.4% and the expense ratio for the period was 15.2% compared to 15.3% in FY17. Group’s net investment yield for FY18 stood at 2.2%.

As for the risk and allowances, the company reported a large risk allowance of $850 million and catastrophe allowances of $550 million. The Board of Director declared a final dividend of 28 Australian cents per share. This took the total dividends for the full year to 50 Australian cps, which is almost double the dividend paid in the year 2017. When combined with the $333 million of QBE shares bought back in 2018, it meant that QBE returned a total of around $1 billion to shareholders in the last calendar year. It is expected that the group’s equity buyback will continue with a further $333 million of stock expected to be repurchased in 2019.

At market close on 9th May 2019, the stock of QBE Insurance was trading at $12.840, up 0.548% with a market capitalisation of $16.92 billion. Its current PE multiple stands at 31.130x, and its last EPS was noted at $0.410. Its annual dividend yield has been noted at 3.92%. Today, it touched day’s high at $12.900 and day’s low at $12.740, with a daily volume of 3,062,481. Its 52 weeks high and low price stands at $13.160 and $9.280, with an average volume of 3,980,008. Its absolute returns for the past one year, six months and three months are 25.69%, 12.41%, and 13.61%, respectively.

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