QBE Delivers 28% Profit Surge and Strong Capital in 1H25
QBE Insurance Group reported a robust half-year performance with a 28% rise in adjusted net profit and solid premium growth, underpinning a confident outlook for 2025.
- 28% increase in adjusted net profit after tax to $997 million
- 6% gross written premium growth, 8% excluding non-core exits
- Combined operating ratio improved to 92.8%
- Adjusted return on equity rose to 19.2%
- Credit rating upgrades to AA- and strong capital position maintained
Strong Half-Year Results Highlight Operational Discipline
QBE Insurance Group has reported a solid first half for 2025, with adjusted net profit after tax climbing 28% to $997 million compared to the same period last year. This performance was supported by a 6% increase in gross written premiums, which rises to 8% when excluding non-core portfolio exits. The company’s combined operating ratio (COR) improved to 92.8%, reflecting disciplined underwriting and effective claims management.
Adjusted earnings per share also rose sharply by 32%, reaching A¢103, while book value per share increased modestly to A$11.0. These metrics underscore QBE’s ability to deliver shareholder value through a balanced approach to growth and profitability.
Capital Strength and Credit Rating Upgrades
QBE’s capital position remains robust, with an APRA PCA multiple of 1.85x, comfortably within its target range of 1.6x to 1.8x. The insurer’s prudent capital management was further validated by credit rating upgrades from both S&P and Fitch to AA-, reflecting enhanced financial strength and resilience. The company also replaced approximately $900 million of Additional Tier 1 capital notes with Tier 2 debt issuance, improving the quality of its capital base.
In line with its capital discipline, QBE declared an interim dividend of A¢31 per share, representing a 30% payout ratio and 25% franked, signaling confidence in ongoing cash flow generation and capital adequacy.
Strategic Priorities and Market Positioning
QBE continues to leverage its diversified international footprint across North America, Australia, the UK, Europe, and Asia, with a broad product mix spanning commercial, specialty, reinsurance, and crop insurance segments. The company’s strategic focus on portfolio optimisation, enterprise efficiency, and customer-centric initiatives aims to sustain growth and improve underwriting performance.
Management highlighted ongoing efforts to modernise operations through automation and AI, enhance broker relationships, and deepen customer insights. These initiatives are designed to strengthen QBE’s competitive position in a rationalising commercial property and casualty insurance market.
Outlook and Market Conditions
Looking ahead, QBE expects mid-single digit growth in gross written premiums for the full year 2025, with a combined operating ratio forecast around 92.5%. The company anticipates continued supportive market conditions, although it plans for a modest drag on premium growth from portfolio exits. Investment returns remain steady, with a fixed income exit yield of 3.8% at the half-year mark.
While catastrophe claims have been below allowance so far, QBE remains vigilant given the unpredictable nature of global risks. The insurer’s diversified portfolio and disciplined underwriting approach are key to navigating these challenges and capturing emerging opportunities.
Bottom Line?
QBE’s strong half-year results and upgraded credit ratings set the stage for sustained growth, but investors will watch closely for how the company manages evolving risk and market dynamics.
Questions in the middle?
- How will QBE balance growth ambitions with portfolio exits in the second half of 2025?
- What impact will rising inflation and interest rates have on underwriting margins and investment returns?
- How effectively can QBE leverage technology and customer insights to deepen broker relationships and expand market share?
