QBE releases half-year financial report

QBE releases half-year financial report | Insurance Business Australia

QBE releases half-year financial report

It’s QBE Insurance Group’s turn to reveal how it’s performing so far this year – and for group chief executive Andrew Horton, the global insurer’s financial results for the first half of 2022 are a demonstration of resilience despite a decrease in earnings.

Here are the numbers from QBE’s half-year report for the period ended June 30:

Results

H1 2022

H1 2021

Gross written premium

US$11.6 billion

US$10.2 billion

Gross earned premium

US$9 billion

US$8 billion

Underwriting result

US$1.2 billion

US$642 million

Net investment income/(loss)

US$(840 million)

US$58 million

Net profit after income tax

US$151 million

US$441 million

   

According to the insurer, the 66% decline in net profit attributable to ordinary equity holders of QBE was due to adverse mark-to-market impacts on the company’s investment portfolio, the transaction to reinsure North America excess & surplus lines prior accident year liabilities, the Australian pricing promise review, as well as an adverse risk-free rate mismatch.

Of QBE’s net investment loss in the first six months, US$547 million was on policyholders’ funds; US$293 million on shareholders’ funds.

Lifting the lid on its investment portfolio performance, QBE noted: “The result was materially impacted by unrealised losses associated with the significant increase in bond yields during the period. Adjusting for the impact of changes in risk-free rates on fixed income securities, the total investment return was US$14 million or 0.1% for the half, a decrease from 0.7% in the prior period.

“In fixed income, the core yield from the portfolio was almost fully offset by adverse credit spread marks, and within risk assets, the returns from infrastructure and unlisted property were largely offset by unrealised losses on equities and enhanced fixed income.”

The losses, meanwhile, didn’t stop the board from declaring an interim dividend of AU¢9 per share. In H1 2021, the corresponding amount was AU¢11.

Commenting on the interim figures, Horton stated: “Despite the challenging operating backdrop, QBE demonstrated resilience in the period, with ongoing positive momentum across the business. We have made good early progress against our new strategic priorities, and our outlook for the remainder of the year remains positive.”