QBE Posts US$1.03 Billion Profit with 6% Premium Growth in H1

Profit Growth Marginal but Underpinned by Premium Momentum

QBE Insurance Group has delivered a steady half-year performance for the six months ended 30 June 2026, reporting a net profit after tax of US$1.03 billion, a 1% increase from the prior corresponding period. This modest growth was supported by a 6% rise in gross written premium (GWP) on a constant currency basis, driven primarily by gains in its International and North America divisions.

Underwriting remained disciplined, with the combined operating ratio (COR) holding firm at 92.8%, consistent with the company’s full-year guidance of around 92.5%. This stability reflects ongoing risk selection rigor and rate adequacy across most portfolios, despite softer premium rate increases compared to prior periods.

Divisional Performance and Claims Experience

North America saw a 5% increase in GWP, buoyed by targeted growth in Crop insurance, Specialty Casualty, and Construction sectors, although this was partially offset by the exit of a Workers’ Compensation program and underwriting actions in Accident & Health. The Crop segment grew 17% in GWP but faces stable net insurance revenue due to increased cessions to the Federal program.

International delivered robust 9% GWP growth, with strong ex-rate growth of 11%, led by QBE Re, Lloyd’s portfolios, and Portfolio Solutions. The combined operating ratio improved to 91.6% from 92.5%, helped by lower catastrophe claims despite an estimated $75 million impact from the Middle East conflict.

Australia Pacific’s GWP remained broadly stable, with a slight 1% rise in net insurance revenue. The division’s combined operating ratio increased modestly to 88.2%, reflecting elevated catastrophe costs from Australian bushfires and storms, partially offset by favourable prior year claims development.

Claims and Expense Trends

QBE’s net claims ratio improved slightly to 62.3% from 62.8%, driven by a reduction in catastrophe claims to 4.7% of net insurance revenue, comfortably below the $517 million first-half allowance. However, the ex-cat claims ratio increased marginally to 61.8%, influenced by industry-wide claims inflation in Accident & Health and some large individual events.

The prior accident year claims development remained favourable at $403 million, or 4.2% of net insurance revenue, supporting underwriting profitability. The net commission ratio edged up to 18.1% due to business mix changes, while the expense ratio rose slightly to 12.4%, impacted by foreign exchange movements and lower Transitional Excess Profit and Loss credits in Australia’s compulsory third party motor (CTP) business.

Investment Income and Capital Management

Investment income, excluding the impact of risk-free rate changes, increased to US$828 million, representing a 2.3% return. The core fixed income portfolio yielded 2.1%, improving from the prior period, supported by a 4.1% exit yield as interest rates remained favourable. Risk assets returned 3.6%, slightly down from 4.6% previously, with contributions from infrastructure and developed equities.

Funds under management grew to US$36.6 billion, up 2% from December 2025, driven by premium growth and investment returns, partially offset by dividend payments and a completed A$450 million on-market share buyback.

QBE’s capital position remains robust with an indicative APRA Prescribed Capital Amount (PCA) multiple of 1.82x, within the target range of 1.6 to 1.8x. The company issued €500 million of Tier 2 subordinated debt during the period, marking its first euro-denominated debt issuance, and plans to redeem a further A$500 million Tier 2 instrument in August 2026. The CET1 multiple stood at 1.30x, down slightly due to the share buyback.

Dividend and Outlook

QBE declared an interim dividend of 33 Australian cents per share, representing a 33% payout ratio of adjusted net profit after tax, up from 31 cents in the prior year. The dividend will be 30% franked and payable on 2 October 2026, with Dividend Reinvestment Plan and Bonus Share Plan options available without discount.

Looking ahead, QBE remains on track to meet its full-year 2026 targets, expecting a combined operating ratio around 92.5% and mid-single-digit constant currency premium growth. The medium-term outlook includes a sustained adjusted return on equity above 15%, supported by disciplined underwriting, portfolio optimisation, and a supportive interest rate environment for investment returns.

Post-balance date, QBE entered into reinsurance arrangements to reinsure certain prior accident year claims liabilities and exited business lines in International and North America. This transaction, subject to regulatory approval, is expected to incur a net upfront cost of approximately US$80 million before tax but aims to enhance reserve quality and capital efficiency.

As QBE celebrates 140 years, the company continues to leverage its diversified global platform and disciplined execution to navigate evolving risks and market conditions, with a clear eye on sustainable growth and capital management.