- QBE Insurance remained resilient during the challenging times last year.
- Overall Q1 2021 combined operating ratio was in line with the company expectations.
- The company expects a better performance due to a better economic outlook.
- Its strategies are focused around modernisation, talent & culture, customer focus and performance.
QBE Insurance Group Limited (ASX:QBE) convened its Annual General Meeting (AGM) on Wednesday, 5 May 2021. The company stated that despite the challenging period, the resilience and strength of the business was reflected in the underlying financial performance of QBE.
The company also highlighted improved economic outlook in the markets in which QBE operates. The global economy is now projected to expand at 6% in 2021, as per the International Monetary Fund (IMF).
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A Glance at QBE Performance
Pricing momentum accelerated, especially in the northern hemisphere during 2020. This led to an improvement in the attritional claims ratio. The growth in the top line was robust when compared with several years, with underlying gross written premium (GWP) up by 10% from 2019.
In 2021, the market conditions are much better, evident by the 8.9% premium rate increase achieved in Q1 as compared to PCP. Each division achieved premium rate growth as per the anticipation. The top-line improved slightly, with headline GWP up by 28% on the PCP.
Dividend: Due to the substantial statutory loss last year, the company made a decision not to release a final dividend. The company took the decision by keeping in mind that they want to maintain a strong balance sheet for better flexibility.
The company expects to resume dividend payment during the current year, up to 65% of adjusted cash profit.
Constant currency GWP growth, excluding crop insurance, was 13%, while overall net earned premium growth was 6%. In line with premium earning patterns, earned premium growth is expected to increase in the remaining 2021.
The company took pre-emptive action to boost the capital position and protect the balance sheet. The action proved beneficial, and at the end of Q1, capital remains strong, with the APRA PCA multiple growing to 1.73x from 1.72x at the end of last year.
Strategic Priorities for 2021
The four key pillars around which the company remains focused are customer focus, performance, talent & culture, and modernisation. The company reinvigorated the cell review process during Q1 with more focus on regular reporting metrics. It also remained focused on delivering against its climate and sustainability commitments.
The core of all the strategies is understanding customers and their particular industries and how they are going forward.
QBE Insurance also launched [email protected] in 2020. The company continues to make good progress with the future talent pipeline with its talent and leadership strategy.
QBE was trading at AU$10.820 on 6 May 2021 (AEST 11:17 AM), up 3.540% from its last closing price.