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Highlights
- Robust Financial Growth: Revenue and profit see significant jumps.
- Dividend Boost: 40% increase in dividend per share.
- Optimistic 2025 Outlook: Expecting mid-single-digit premium growth.
The QBE Insurance Group (ASX:QBE) has witnessed a 6% surge in its stock price following the release of its FY24 financial results. The insurer, which operates across North America, Australia, the UK, continental Europe, and Asia, posted strong financial performance, highlighting steady growth in key business areas.
FY24 Performance Overview
QBE's financial results showed impressive growth across multiple metrics. Gross written premium (GWP) increased by 3% to US$22.4 billion, despite portfolio exits in North America and Australia Pacific, as well as lower crop premium contributions. Excluding the crop business, GWP grew by 5%, and by 9% when further excluding the exited portfolios.
Net insurance revenue grew 7.3% to US$17.8 billion, while the net claims ratio dropped by 1.9 percentage points to 63.2%, signaling better underwriting discipline. Net investment income saw an 8.3% increase to US$1.5 billion, benefiting from returns on both fixed-income and risk asset portfolios.
One of the most notable figures from the report was net profit after tax (NPAT), which surged 31% to US$1.78 billion. This strong profitability led to an impressive 40% boost in dividends, with the dividend per share reaching A$0.87.
Operational Efficiency and Market Trends
QBE’s renewal premium rate increase averaged 5.5% in FY24, compared to 9.7% in FY23. The company noted that this slowdown was expected, citing “strong rate adequacy and lower claims inflation” as key factors. Additionally, the combined operating ratio improved to 93.1% from 95.2% in FY23, reflecting greater efficiency in operations.
While overall expenses grew by 10% at constant foreign exchange rates, the expense ratio only rose slightly to 12.2%, up from 11.8% the previous year. This increase was primarily attributed to higher spending on the company’s ongoing modernization initiatives.
Investment income provided another boost, delivering a 4.9% return, supported by strong performances in both core fixed-income and risk asset portfolios.
Outlook for 2025
Looking ahead, QBE anticipates mid-single-digit GWP growth in constant currency terms for 2025. The company is also targeting a combined operating ratio of approximately 92.5%, signaling continued operational efficiency.
On the investment side, QBE reported an exit core fixed-income yield of 4.2% in FY24, suggesting the potential for another strong year of investment returns. However, the broader economic environment, including slowing inflation and potential interest rate reductions, could impact future gains.
With a strong financial performance and a positive outlook, QBE remains a key player in the insurance sector, demonstrating resilience and steady growth.
