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QBE Insurance H1 net profit after tax up YOY on stronger investment returns

QBE Insurance Group Ltd. logged higher statutory net profit after tax for the half year ended June 30 at US$463 million, compared with US$358 million in the year-ago period, due to significantly stronger investment returns.

Net investment and other income was US$755 million, up from US$287 million in the year-ago period.

"Fixed income returns benefited from significant mark-to-market gains from lower sovereign bond yields and narrower credit spreads while growth assets also significantly outperformed during the period," the group said in a news release.

The company's first-half profit after income tax attributable to ordinary equity holders totaled US$463 million, or 34.7 cents per share, up from US$358 million, or 26.3 cents per share, in the prior-year period. Cash profit after tax was US$520 million, up 35% from US$385 million in the prior-year period.

The group reported an underwriting loss of US$24 million for the half year ended June 30, compared with underwriting profit of US$260 million in the year-ago period.

Combined operating ratio was 100.4%, compared with 95.4%. The current-period result reflects a material reduction in risk-free rates used to discount net outstanding claims liabilities and the impact of the Ogden decision in the U.K., which added 4.1% and 1.1%, respectively, to the combined operating ratio. Excluding the impacts of changes in risk-free rates in both periods, the Ogden decision in the current period and the Hong Kong construction workers' compensation reinsurance transaction in the prior period, the combined operating ratio was 95.2%, compared with 95.8% in the prior period.

First-half adjusted net profit after tax climbed 35% year over year to US$531 million.

Gross written premium for the period was US$7.64 billion, down slightly from US$7.89 billion in the prior-year period. Net earned premium slightly increased to US$5.67 billion in the first half from US$5.65 billion in the prior-year period.

The group's insurance profit was US$495 million, up from US$477 million in the prior-year period, reflecting marginally improved underwriting profitability.

QBE Insurance also proposed an interim dividend of 25 Australian cents per share, up 14% from the prior period. The interim dividend will be paid Oct. 4 to shareholders of record as of Aug. 23.