Why is QBE Insurance (ASX:QBE) in news today?

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Why is QBE Insurance (ASX:QBE) in news today?

QBE Insurance Group Limited (ASX:QBE)
Image source: © Ralfliebhold | Megapixl.com

Highlights

  • QBE Insurance reported 19% increase in the gross written premium.
  • The company estimates crop gross written premium to reach AU$3.3 billion in 2022.
  • QBE Insurance expects hit of US$75 million due to Ukraine and Russia war.

The ASX-listed insurer, QBE Insurance Group Limited (ASX:QBE), released a performance update on Thursday, upon which the share price of QBE jumped on the ASX. The company continued the positive momentum it experienced the previous year in the first quarter of full-year 2022, despite experiencing a roller coaster ride during the quarter.

QBE cited rise in the crop insurance premium as the major reason for sustaining its performance. Moreover, growth in the QBE’s reinsurance segment also added to the first-quarter performance.

The shares of QBE closed 5.49% higher on the ASX today (5 May 2022). The share price increased by 17.6% in one year, and the year-to-date gain was 6.38%.

Related reading: How QBE Insurance (ASX:QBE) returned to profit despite challenges

Financial metrics shared by QBE

Image source: © Pvl | Megapixl.com

In the first quarter of the financial year 2022, the gross written premium grew by 19% on the prior corresponding period. The gross written premium of QBE surged by 15% after excluding crop, and ex-rate growth reached 10%. Considering the growth in the crop segment, QBE said that it expects to report around AU$3.3 billion of crop gross written premium in the full year of 2022. In 2021, QBE recorded a premium of AU$2.7 billion.

QBE expects exposure to Russia and Ukraine conflict

Reportedly, QBE expects US$75 million of hit because of the Russia and Ukraine war. The exposure is expected due to aviation, political risk and political violence. The listed insurer added that it would report the ultimate impact of the war in catastrophe costs.

Natural catastrophe claims increased in first quarter

Sydney-based insurers continued to experience an increase in catastrophe claims during the first quarter because of storms and floods in parts of Australia and storms in Europe and the UK. However, the company marked that catastrophe related costs were in line with its expectations for the first quarter.

Management commentary on the quarterly performance

Andrew Horton, CEO of QBE Group, commented on the performance,

What are the strategic priorities of QBE?

In the annual general meeting, QBE shared its six strategic priorities to guide the company in the medium to long term. It includes sustainable growth, portfolio optimisation, modernising our business, bringing the enterprise together and focusing on its people and culture.

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