QBE 1H26 Adjusted Profit US$1,033m, COR Held at 92.8%

On a management basis, QBE (ASX:QBE) Insurance Group reported net profit after income tax of US$1,033 million for the half year ended 30 June 2026, compared with US$1,022 million in the prior period, and adjusted net profit after income tax of US$1,033 million against US$997 million. The company states all figures in US dollars unless otherwise noted. Gross written premium was US$15,137 million, up 6% on a constant currency basis, or 4% excluding Crop and exited portfolios. The combined operating ratio was 92.8%, unchanged on the prior period. The net cost of catastrophe claims reduced to US$445 million, or 4.7% of net insurance revenue, from US$479 million or 5.4%, which QBE said was comfortably below the first half catastrophe allowance of US$517 million. The ex-catastrophe claims ratio increased to 61.8% from 61.5%, the net commission ratio to 18.1% from 17.9% and the expense ratio to 12.4% from 12.1%. Prior accident year claims development was US$403 million, including favourable development of the central estimate of US$108 million against US$91 million a year earlier.

Total investment income, which QBE defines as excluding fixed income gains or losses from changes in risk-free rates, was US$828 million, a return of 2.3%, compared with US$788 million and 2.4% in the prior period, with the core fixed income portfolio returning 2.1% or US$635 million and risk assets 3.6% or US$192 million. Separately reported fixed income losses from changes in risk-free rates were US$171 million, against gains of US$141 million a year earlier. Funds under management rose 2% to US$36.6 billion from US$35.8 billion at 31 December 2025. Adjusted net profit equated to an annualised adjusted return on equity of 17.7%, down from 19.2% and above QBE's medium-term outlook of 15% or more. The interim dividend is A33 cents per share, representing a 33% payout ratio of adjusted net profit after tax, compared with A31 cents and 30%. The indicative APRA PCA multiple was 1.82x at 30 June 2026, down from 1.87x at 31 December 2025, and 1.78x on a pro forma basis allowing for the interim dividend, against the group's 1.6x to 1.8x target range. Debt to total capital was 24.1%, unchanged, reducing to 22.4% pro forma for the August redemption of a further A$500 million Tier 2 instrument, and the A$450 million on-market buyback was completed in April. QBE said additional capital efficiency initiatives are to complete in the second half of 2026, including the sale of its Trade Credit business alongside a loss portfolio transfer announced today. For full year 2026 QBE has an outlook of a combined operating ratio of about 92.5% and constant currency gross written premium growth in the mid-single digits.