S&P Global Ratings retains a positive outlook for QBE based on an improvement in the group’s operating performance over the past 12 months and its “very strong” capital position.

The ratings company expects QBE’s earnings profile will continue to show less volatility as reserves show greater stability, while the North American operations will improve and the insurer’s business will grow.

“We view the group as having a very strong competitive position on the back of its strong market position in key lines, and geographic and product diversity,” S&P says.

QBE operates in some highly competitive market segments amidst ongoing challenging conditions, particularly in some commercial lines, and is managing some residual portfolio remediation, according to the report.

S&P affirmed A+ financial strength and issuer credit ratings on the group’s core operating companies and an A- issuer credit rating on the holding company QBE Insurance Group Ltd.

An upgrade would depend on a range of considerations, including improved earnings resilience over the upcoming 12 months, continued reserving stability and a return to top-line growth, S&P says.

Earnings strength could be indicated by a group net combined operating ratio below 95% and clear indications that the operational performance of the North America division has meaningfully improved to be more in line with the group.

The outlook remains stable on QBE’s strategically important lenders mortgage insurance subsidiaries, S&P says.