QBE profits down but still remarkable: O’Halloran
QBE has exceeded market expectations to post a 3.5% drop in its annual net profit of $1.86 billion. But CEO Frank O’Halloran – while signalling he’s still on the acquisition trail – predicts a tougher year ahead.
He says the group’s results are remarkable given the economic conditions insurers are operating under.
In a national hook-up to analysts and journalists, he pointed to the increase in catastrophe claims and the fact that QBE continues to outperform its peers.
The group’s gross written premium (GWP) was up 6% to $13.14 billion and net earned premium was up 9% to $11.1 billion. QBE’s combined operating ratio was 88.5%, compared with 85.9% last year.
“Our businesses and our balances are in great shape and certainly in great shape to capitalise on the many, many opportunities coming across our desk,” Mr O’Halloran said.
The company’s Australian operations posted a GWP of $2.9 billion, up 12% from $2.59 billion the previous year, and net earned premium of $2.36 billion – up from $2.14 billion. Its combined operation ratio was 90.6%, compared with 82.9% in 2007.
Mr O’Halloran attributed the rise in the combined operating ratio to the severe storms in Victoria, NSW and Queensland last year and slightly higher attritional claims.
For the year ahead, he’s particularly bullish, saying he expects net earned premium to increase by 20%, while he sees the combined operating ratio dropping to less than 80%. That’s subject to large individual risk and catastrophe claims not exceeding 10% of net earned premium, and premiums rising by 4% on renewal.
“Our underwriters are seeing positive signs of a hardening market,” Mr O’Halloran said.
He says QBE holds capital of $3.3 billion in excess of the risk-based minimum capital requirements of $4.6 billion by the Australian Prudential Regulation Authority (APRA). Unlike many of its global competitors, QBE has no intentions of going to the market to raise new capital.
He says the group’s results are remarkable given the economic conditions insurers are operating under.
In a national hook-up to analysts and journalists, he pointed to the increase in catastrophe claims and the fact that QBE continues to outperform its peers.
The group’s gross written premium (GWP) was up 6% to $13.14 billion and net earned premium was up 9% to $11.1 billion. QBE’s combined operating ratio was 88.5%, compared with 85.9% last year.
“Our businesses and our balances are in great shape and certainly in great shape to capitalise on the many, many opportunities coming across our desk,” Mr O’Halloran said.
The company’s Australian operations posted a GWP of $2.9 billion, up 12% from $2.59 billion the previous year, and net earned premium of $2.36 billion – up from $2.14 billion. Its combined operation ratio was 90.6%, compared with 82.9% in 2007.
Mr O’Halloran attributed the rise in the combined operating ratio to the severe storms in Victoria, NSW and Queensland last year and slightly higher attritional claims.
For the year ahead, he’s particularly bullish, saying he expects net earned premium to increase by 20%, while he sees the combined operating ratio dropping to less than 80%. That’s subject to large individual risk and catastrophe claims not exceeding 10% of net earned premium, and premiums rising by 4% on renewal.
“Our underwriters are seeing positive signs of a hardening market,” Mr O’Halloran said.
He says QBE holds capital of $3.3 billion in excess of the risk-based minimum capital requirements of $4.6 billion by the Australian Prudential Regulation Authority (APRA). Unlike many of its global competitors, QBE has no intentions of going to the market to raise new capital.