QBE announces half-year financial results

According to the insurer, the 66% decline in net profit attributable to ordinary equity holders of QBE was due to adverse mark-to-market impacts on the company’s investment portfolio, the transaction to reinsure North America excess & surplus lines prior accident year liabilities, the Australian pricing promise review, as well as an adverse risk-free rate mismatch.

Of QBE’s net investment loss in the first six months, $547 million was on policyholders’ funds; $293 million on shareholders’ funds.

Lifting the lid on its investment portfolio performance, QBE noted: “The result was materially impacted by unrealised losses associated with the significant increase in bond yields during the period. Adjusting for the impact of changes in risk-free rates on fixed income securities, the total investment return was $14 million or 0.1% for the half, a decrease from 0.7% in the prior period.

“In fixed income, the core yield from the portfolio was almost fully offset by adverse credit spread marks, and within risk assets, the returns from infrastructure and unlisted property were largely offset by unrealised losses on equities and enhanced fixed Income.”

The losses, meanwhile, didn’t stop the board from declaring an interim dividend of AU¢9 per share. In the H1 2021, the corresponding amount was AU¢11.

Commenting on the interim figures, Horton stated: “Despite the challenging operating backdrop, QBE demonstrated resilience in the period, with ongoing positive momentum across the business. We have made good early progress against our new strategic priorities, and our outlook for the remainder of the year remains positive.”