QBE's profitability rises with underwriting improvements

Moody’s is also optimistic about the insurer’s premium pricing trends.

Moody's Ratings expects QBE to sustain high capital levels, low financial leverage, and improved underwriting profitability amid strategic adjustments in its North American operations to reduce exposure to non-core lines. 

The stable outlook reflects these expectations, contingent on maintaining strong financial metrics and benefiting from favourable premium pricing trends.

The affirmations reflect QBE's strong capitalisation, low financial leverage, and robust asset risk profile, offset by significant global catastrophe underwriting exposures that may lead to earnings volatility. 

QBE benefits from high product and geographical diversification, with four major product lines each contributing close to or exceeding 10% of gross written premiums across three divisions spanning multiple countries.

In fiscal year 2024 (FY24), QBE showed sold profits with net after-tax profits of $1.36b and an insurance operating result of $1.3b, marking a 73% increase from the previous year. 

Improved investment returns and enhanced underwriting performance supported these results, driven by higher premium rates and strong customer retention.

QBE maintains a conservative investment portfolio dominated by high-quality fixed-income assets, comprising 88% of invested assets with a high credit quality. 

The group's capital strength is robust, reporting a proforma regulatory capital ratio of 1.74x and a debt-to-total capital ratio of 21.9% as of December 2023, aligned with regulatory requirements and internal targets.