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19th August 2012
QBE net profit up
QBE has announced net profit after tax for the six months was up 13%, compared with the same period last year and an insurance profit margin in line with guidance. The reported net profit after tax of $760m reflects the reduced cost of large individual risk and catastrophe claims, a fall in the attritional claims ratio and a strong investment performance.
Insurance profit was up 26% $958m, with an insurance profit margin of 13.0% (2011: 11.2%) and a combined operating ratio (COR) of 92.9 (95.7).
The cost of large individual risk and catastrophe claims for the current accident year was $592m, significantly lower than last year($1,080m). This figure includes substantial general provisions for incurred but not reported claims (IBNR) of $265m.
There was an increase of $197m on 2011 Growth in gross written premium in line with target and up 3% to $9,223m.
New group ceo, John Neal said “We are pleased to report a 13% increase in net profit after tax. Underwriting conditions in 2012 are improving, supported by average premium rate increases of over 5% across our global businesses. Our underlying underwriting performance remains sound, and we have seen a more normal level of claims experience in the first half of 2012 following an unprecedented frequency of catastrophe claims in 2010 and 2011.
Our focus in 2012 remains on delivering industry leading returns, supported by a strong balance sheet and a long term strategy that can capitalise on QBE’s global franchise and economies of scale.
We remain positive in our outlook for 2012. Our underwriting performance is improving quickly following the actions we have taken post the 2011 catastrophe claims.
Our full year 2012 insurance profit margin is targeted to be better than 12%. This includes a substantial 10.5% of net earned premium allowance for large individual risk and catastrophe claims, and non-recurring items in the first half. The target is subject to investment returns performing in line with expectations and the other usual caveats.
QBE has a highly diversified business model, both by insurance product and by geography. We believe that this will allow us to meet or exceed our high hurdle rate for return on capital and provide industry leading products and services for our customers and intermediaries. We remain confident of QBE’s ability to out-perform our peers and to provide fulfilling careers for our people.”