QBE Insurance 1st Half Profit Climbs On Underwriting Strength

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--QBE Insurance Group Ltd. (QBE.AU) said its half-year profit rose on the back of a stronger underwriting performance in North America and its Australia and New Zealand operations, offsetting a rise in claims in emerging markets.

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Net profit increased 30% to US$345 million in the six months through June, after falling sharply to US$265 million a year earlier, when the Australian company was squeezed by low interest rates and reduced insurance pricing.

Cash earnings, a measure that strips out certain one-time items and costs, similarly rose 30% to US$374 million and revenue for the period was up 5% to US$8.25 billion from US$7.89 billion.

Analysts scaled back earnings expectations in June after the company warned of a significant rise in claims in its emerging markets operations, including an increase in the frequency of medium-sized claims in Asia and weather-related claims in Latin America.

Following slightly better-than-expected top-line growth in the first half, the insurer said it now expected modest growth in gross written premium for the full year, where it had previously forecast a relatively stable performance.

On a constant-currency basis, gross written premium was up 3% for the first half, QBE said.

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The company recorded an underwriting profit for the period of US$154 million, up sharply from US$54 million last year.

To improve its regional focus, the company said it was reverting to two separately managed divisions in the Asia-Pacific region and Latin America and had launched a review to determine steps to improve underwriting performance. David Fried, currently chief executive of the emerging markets division, will step down and current Chief Risk Officer Jason Brown and Argentina Chief Executive Carola Fratini will take over as CEOs of Asia Pacific and Latin America, respectively, QBE said.

QBE, which traces its roots back more than 125 years to North Queensland Insurance Co., plans to pay an interim dividend of 22 Australian cents (US$0.17) a share, a 1 cent increase on the same period last year.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

August 16, 2017 18:41 ET (22:41 GMT)