QBE Insurance Group outlines first-half results expectations

Outlook for 2023 reiterated

QBE Insurance Group outlines first-half results expectations

Insurance News

By Terry Gangcuangco

QBE Insurance Group has published its results forecast for the first six months of 2023 (1H23).

In its update, the global insurer said: “A series of North American convective storms through the second half of June have resulted in additional pressure on catastrophe costs beyond those outlined on May 12, 2023. QBE currently expects 1H23 net catastrophe costs of ~$700 million.

“The 1H23 result is expected to include adverse central estimate development, including previously flagged catastrophe costs from 2022 events of ~$140 million, plus ~$40 million of crop adverse development. Total 1H23 investment income is expected to be ~$660 million, which includes a ~$50 million benefit from changes in credit spreads.”

Meanwhile, QBE expects premium rate increases of about 10%, with first-half gross written premium and net insurance revenue estimated to reach approximately $12.8 billion and $7.9 billion, respectively. The premium rate changes exclude North America crop and/or Australian compulsory third-party motor.

The Sydney-headquartered business added: “The 1H23 result is expected to include an adverse net impact from asset liability management activities of ~$30 million, representing a ~$200 million impact from higher risk-free rates on core fixed income assets, partially offset by a favorable claims liability impact of ~$170 million.

“The 1H23 combined operating ratio will include previously flagged upfront costs of ~$100 million associated with the reserve transaction, which will be recorded within net insurance revenue, and represent a ~1.2% impact on the 1H23 combined operating ratio.”

QBE, whose half-year financials will be released on August 10, also reiterated the company’s full-year (FY23) outlook.

The insurance group said: “QBE continues to expect group constant currency gross written premium growth of ~10% in FY23, and a FY23 group combined operating ratio of ~94.5%. Combined operating ratio outlook now includes a revised FY23 catastrophe budget of ~$1.330 billion, and continues to exclude the upfront impact from the reserve transaction announced in February.”

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