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Highlights
QBE Insurance Group announced profit in FY21 after reporting losses in the previous year.
The company reported a statutory FY21 combined operating ratio of 93.7% compared with 104.2% in the prior year.
The company’s board announced a final dividend of AU$0.19 per share.
QBE Insurance Group Ltd (ASX:QBE) swung to profit in FY21 after reporting losses in the previous year despite heightened catastrophe costs and inflation. The company attributed the improvement in profit to rise in premium growth.
The ASX-listed general insurance and reinsurance company reported a statutory net profit after tax (NPAT) of US$750 million, compared with a net loss after tax of US$1,517 million in FY20.
Statutory gross written premium reported a 22% growth to US$18,457 million, signaling towards a strong premium rate environment, improved customer retention and new business growth across all regions.
QBE Insurance Group reported a statutory FY21 combined operating ratio of 93.7% compared with 104.2% in the prior year. The FY20 was significantly impacted by COVID-19 claims and adverse prior accident year claims development.
The company’s board announced a final dividend of AU$0.19 per share, bringing the FY21 dividend to AU$0.30 per share, up from AU$0.04 Australian per share in 2020. It represented a payout of 41% of adjusted cash profit.
What does the company say?
Commenting on the results, QBE Group CEO, Andrew Horton, said: “I am pleased with the strong premium growth and significant uplift in underwriting margin. The strong result was achieved despite the heightened level of catastrophes during the year which remain a major issue for the industry.”
“In targeting ongoing premium growth, we will remain vigilant in pricing adequately for an appropriate risk-adjusted return on capital, with claims inflation, catastrophe costs and overall portfolio volatility key areas of ongoing focus,” he added.
Outlook
The company expects the gross written premium growth to be in the high single digits in 2022. “Moreover, delivery against our 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,” it said.
“In FY22, we expect the business will achieve further steady improvement on the FY21 ‘exit’ combined operating ratio of nearly 94%,” QBE Insurance Group noted.
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