QBE Insurance Group Announces Strong Underwriting Result and Capital Return

About QBE Insurance Group Limited

QBE Insurance Group Limited (ASX: QBE) is one of Australia’s leading international general insurers, with operations spanning Australia Pacific, North America and International markets including Europe and Asia. Headquartered in Sydney, QBE provides commercial, specialty and consumer insurance products, operating through a diversified global platform that balances geographic exposure and product mix.

Over recent years, QBE has focused on strengthening underwriting discipline, reducing volatility, simplifying its portfolio and improving returns on equity. The company has exited underperforming portfolios, tightened risk selection and enhanced pricing frameworks, positioning the group for more consistent earnings performance across cycles.

The latest update reflects continued execution of this strategy, with management highlighting premium growth, margin expansion and capital strength despite a complex macroeconomic and claims environment.

Financial Performance and Premium Growth

QBE reported solid growth in gross written premiums across its core divisions, supported by ongoing premium rate increases and portfolio optimisation. Australia Pacific delivered steady growth, benefiting from commercial lines pricing momentum and improved conditions in motor and property portfolios. North America continued to experience firm pricing in specialty lines, while the International division demonstrated resilience across European and emerging markets.

The group’s combined operating ratio improved year on year, reflecting stronger underwriting margins and disciplined expense control. Rate increases in commercial property, liability and specialty lines offset higher claims inflation in certain classes. Management noted that pricing remains above long-term loss cost trends in several markets, supporting sustainable margins.

Investment income also contributed positively, with higher reinvestment yields and improved returns on the fixed income portfolio. In the current interest rate environment, general insurers such as QBE benefit from stronger investment returns on capital reserves, adding stability to overall earnings.

Underwriting Discipline and Risk Management

A key focus for QBE has been maintaining underwriting discipline amid competitive pressures. The group reported that catastrophe claims remained within its allowance, despite ongoing exposure to natural peril events across Australia, North America and Europe. Portfolio reinsurance protections continue to play an important role in managing volatility.

Claims inflation remains a factor across motor and construction-related portfolios, particularly in North America. However, management indicated that ongoing pricing adjustments and targeted underwriting responses are mitigating the impact. Expense efficiency initiatives, including digital workflow enhancements and procurement optimisation, are also supporting margin stability.

The company reaffirmed its commitment to maintaining a balanced portfolio across regions and products, reducing reliance on any single class or market.

Capital Position and Shareholder Returns

QBE reported that its regulatory capital position remains comfortably within its target range. Strong operating cash flow and disciplined balance sheet management underpin the group’s ability to fund growth, maintain reinsurance protections and return capital to shareholders.

The board declared a dividend consistent with earnings strength, reflecting confidence in ongoing performance. QBE has progressively enhanced its capital framework over recent years, prioritising sustainable dividends and prudent capital buffers.

Management reiterated that surplus capital will be assessed against organic growth opportunities, potential bolt-on acquisitions and shareholder returns, in line with the group’s capital management policy.

Strategic Priorities and Operational Initiatives

QBE continues to invest in technology, data analytics and digital capabilities to enhance risk assessment, pricing accuracy and customer engagement. Automation of underwriting processes and claims management is reducing turnaround times and improving customer experience.

The company has also emphasised ESG considerations, including climate risk management and sustainable underwriting practices. As a global insurer, QBE is actively assessing climate-related exposures and strengthening scenario modelling to ensure long-term portfolio resilience.

Operational simplification remains ongoing, with further efficiencies expected through systems integration and standardised processes across divisions.

Market Context

The global insurance market remains influenced by multiple factors, including inflationary pressures, climate-related risks and changing regulatory frameworks. Commercial insurance pricing remains firm in many specialty and property lines, although competitive intensity is gradually increasing in certain segments.

Higher interest rates continue to benefit investment income for insurers, while catastrophe frequency underscores the importance of robust reinsurance and risk management frameworks. Against this backdrop, diversified insurers such as QBE are leveraging scale and geographic spread to manage earnings volatility.

In Australia, commercial and SME demand remains steady, while North American specialty markets continue to offer attractive underwriting opportunities for disciplined operators.

Outlook

QBE reaffirmed its positive outlook, supported by favourable premium rate momentum, ongoing underwriting discipline and improving investment returns. While claims inflation and catastrophe risk remain key variables, management expressed confidence in the group’s pricing adequacy and portfolio balance.

The company expects continued margin resilience and capital strength, with disciplined growth in higher-return segments. As market conditions gradually normalise, QBE’s diversified international platform and risk-focused culture position it to sustain earnings momentum.

Conclusion

QBE Insurance Group’s latest update reflects steady execution of its strategic priorities, underpinned by premium growth, improved underwriting performance and strong capital management. In a complex global risk environment, the group’s disciplined approach to pricing, portfolio management and balance sheet strength continues to support consistent returns for shareholders.

As the insurance cycle evolves, QBE appears well placed to capture sustainable growth while maintaining financial resilience across its diversified global operations.