AM Best has affirmed its credit ratings of QBE Insurance Group’s key subsidiaries in Europe, the UK and North America.

The affirmation comes after the release in February of the insurer’s financial results, which saw the business achieved a group-wide net profit of $US750 million ($1 billion) last year following a $US1.2 billion ($1.6 billion) loss in 2020.

AM Best affirmed the financial strength rating (FSR) of QBE Europe SA/NV, QBE UK and the pooled members of QBE North America Insurance Group remains at A, and the long-term issuer credit rating (ICR) at a+.

“These credit ratings reflect QBE’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management,” the rating agency says.

However, AM Best says it has a negative outlook on the long-term ICR to reflect ongoing pressure on QBE’s strong operating performance assessment, following weaker-than-expected results in recent years.

The ratings agency says comparatively weaker underwriting performance in several recent years has weighed on QBE’s five-year (2017-2021) and 10-year (2012-2021) weighted average combined ratios of 99.6% and 97.8% respectively.

“The group is executing actions to strengthen earnings and has demonstrated underlying performance improvements in recent periods and a return to underwriting profitability in [last year],” AM Best says.

“However, should these performance improvements not prove sustainable, a negative rating action on the long-term ICR is likely.”