Moody’s is also optimistic about insurance company pricing trends.
Moody’s Ratings expects QBE to maintain strong capitalization, low financial leverage and improved underwriting profitability as it makes strategic adjustments in its North American operations to reduce exposure to non-core lines.
The stable outlook reflects these expectations, subject to the company maintaining strong financial metrics and benefiting from favorable premium pricing trends.
The approval reflects QBE’s strong capitalisation, low financial leverage and solid asset risk profile, offset by global catastrophe underwriting risks that could lead to earnings volatility.
QBE benefits from a high degree of product and geographic diversity, with each of its four major product lines accounting for close to or more than 10% of gross written premiums across three divisions across multiple countries.
QBE recorded net profit after tax of $1.36 billion and insurance operating profit of $1.3 billion in financial year 2024 (FY24), up 73% from the previous year.
These results were supported by improved investment returns and stronger underwriting performance due to increased premium rates and strong customer retention.
QBE maintains a conservative investment portfolio centred around high quality fixed income assets, with 88% of invested assets made up of high credit quality assets.
The Group is strongly capitalised with a pro forma regulatory capital ratio of 1.74x and debt to total capital ratio of 21.9% as at December 2023, in line with regulatory requirements and internal targets.