Fitch affirms QBE ratings, lifts outlook
Fitch has affirmed its ratings on QBE but lifted the outlook on them to reflect the insurer’s stronger operating performance.
The agency has affirmed QBE’s long-term issuer default rating at A- and its subsidiaries’ insurer financial strength ratings at A+.
It has raised the outlook to “stable” from “negative”, saying the stronger performance – including an improvement in reserve adequacy – “is more supportive of the remaining goodwill on the group’s balance sheet”.
Goodwill fell to 31% of equity at the end of last year from a peak of 45% at the end of 2011, and will fall further due to asset sales this year.
Fitch says QBE must generate above-average underwriting results to support earnings and interest coverage, given its high level of intangibles and low-yielding, low-risk investment portfolio.