Qbe Insurance Group Limited · ASX:QBE
Qbe Insurance — H1 2005 Earnings Presentation
115 slides from Qbe Insurance's earnings presentation, Aug 17, 2005
Slide 1: ASX cover letter: QBE results for half year ended 30 June 2005
Insurance Group 17 August 2005 The Manager Company Announcements Australian Stock Exchange Limited Level 6 Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, te: QBE results for the half year ended 30 June 2005 Further to the Company’s release to the market today, please find attached
Slide 2: QBE Insurance Group
ee | en i 2 ‘QBEINSURANCEGROUP
Slide 3: Results for the half year ended 30 June 2005 & outlook
| BE INSURANCE GROUP UMITED- RESULTS | for the half year ended 30 June 2005 | & outlook | All amounts i in Australian dollars unless otherwise stated. Comparative numbers for the half year ended 30 June 2004 and the year ended 31. December 2004 have been restaled under Australian Equivatents to. Int
Slide 4: Half year ended June 2005
ae half f year ended 30 June 2005 Record profit after tax, “UP 43% fo $491 milion (2004 $343 ~million)- Profit before tax up 57% to $675 million (2004 :$429 million) Insurance profit up 30% to $553 million (2004 : $425 million) with. aninsurance profit margin of 15. 8% of net earned premium. (2004 2
Slide 5: Highlights
_ Highlights | “halt year ended 30 June 2005: + Gross written premium up 8% to $5,123 million (2004: $4,763 million) due to.the acquisitions in the second half of 2004 Gross. written premium growth 9% adjusted for foreign: exchange movements : “Gross earned premium UP.9% to $4,331 million Net earned
Slide 6: Highlights
~ Highlights: halt year ended 30 tune: 2005 : Reinsurance costs decreased from 22% to. 19% of gross earned “premium.due mainly to synergies from ocauisitions and the UK ~ restructure in 2004. Net claims ratio reduced slightly. from 61 6% to 61.0% ; Improvements i in the claims ratio were achieved fr
Slide 7: Highlights
- Highlights | half year ended 30 June 2005 oe Outstanding claims = probability of adequacy slightly j in eXCess of ourinternal target range at 95%. «. Increase is warranted at half year due to cyclical nature of exposures and historically higher catastrophe activity | inthe- second half-of the year
Slide 8: Highlights
_Hightig hts | hall year ended a0: June 2005 Commission ratio was 17.0% (2004: 16.8%) reflecting a change in mix.of business and higher commissions from the ING joint venture acquisition in Australia’. ws Expense ratio increased from 12.1% to 12. 3% impacted by. costs associated with the consolidati
Slide 9: Highlights
“Highlights halt year ended 30 June 2005. © Gross investment. yield (before borrowing costs, fx ond expenses) Was 5.3%(2004 + 2.9%) o> Netinvestment income for. the half year increased to $337 million (2004 : $132 million). Investment income includes realised and unrealised equity and property gains
Slide 10: Shareholder returns
“Shareholder returns half year ended 30 June 2005 interim dividend 33.0¢ per share, 50% franked (2004: 24.0¢, 50% franked] --Ex dividend.date. 2.23 August 2005 - Record date ne 29 August 2005 = Payment date 16 September 2005. . Interim dividend payout $254 million, up 55% from the interim - dividend
Slide 11: Shareholder returns
"Shareholder returns half year ended 30 June 2005, Earnings per-share* os 2005 7 2004 -Basic sup. 27% 64.6 cents. 80.7 cents - Diluted** up 32%. 59.2 cents... 44.8 cents - Shares notified to ASX of 768 million (2004 : 683 million) Diluted earnings per share.includes. 68. million ordinary shares.’ -
Slide 12: Stronger average A$ in 2005
: Stronger average AS in 2005 : Major currency changes 30 June 2005 USD 0.82 0.80 0.78 0.76 0.74 0.72 0.70 0.68 0.66 0.64 0.62 @) 30 June 2005 closing rates: 0.60 USS up 2.8% 0.58 £ sterling down 4.0% 0.56 <= euro down 8.3% 054 0.52 0.50 12005 half year cumulative average rate: US$ down 4.3% £ sterl
Slide 13: Geographical diversification
Geographical diversification ~ gross earned premium ~ half yeare ended 30 June 2005 Lloyd's division eee oor "23% (27%) “Australia 7 os 28% (23%) Pacific Asia “Central Europe QBE Insurance (Europe) - 8% (8%) the Americas 15% (16%)
Slide 14: Worldwide portfolio mix
Worldwide portfolio mix. <~ gross earned premium half year ended 30 June 2005. Professional indemnity Workers’ compensation 9% (11%) ee . . 9% (9%) | Financial and credit 2% (3%) Marine.and aviation a 6% (6%) Liability 23% (19%) i : -Property 29% (32%) Other 1% (2%) Motor and motor- Pinte casually A
Slide 15: Worldwide operations
Worldwide operations | : HALF. YEAR - Bes FULL YEAR wee Dec Dec 2004 2003*** G66 00-8388. 8571. 7,816 6,781 6,036 tous written premium Si Gross.earned premium $M Net.earned.premium $M Claims ratio %. 61.3 63.3. Commission ratio% 17.5 18,2 -Expense ratio Jo* 12.4 12.3 Combined eperding ratio % 91 a P
Slide 16: Worldwide operations
GWP*~ Worldwide operations halt year ended 30 June 2005 Growth: COR --. Insurance Net profit after - : ; profit margin tax and we : minorities 2005 2005 2005 .-..2004-| 2005 -.. 2004 2005. 2004 SM Oo % Foo Ny % Fo | SM SM Austratia 1.255.032 99.3 89.3 | 18.1149] 138 135 ‘Pacific. Asia Central Europe
Slide 17: Key Australian equivalents to AIFRS impacting QBE Group
Key Australian equivalents to AIFRS impacting QBE Group | Standard Change Impact AASB.119: Employee benefits Deficits and surpluses on defined benefit superannuation schemes fo be included on the balance sheet Total equity reduced by $142 million - affer.tax at. 31. December 2004 ~ AASB 2: Shore-bas
Slide 18: Reconciliation of total equity under previous AGAAP to AIFRS
Reconciliation of total equity under previous AGAAP to that under AIFRS | 7 Brought forward equity-under AIFRS 31 December 30 June 1 January 2004 ~ 2004 ~~ 2004 $M $M $M . Brought forward equity under previous AGAAP 4,480 3,677 3,368 Defined benefll superannuation scheme obligations : (142) qa 22} “
Slide 19: Balance sheet
Balance sheet - “31 Dec 2004.” 30 June 2004 - $M ~ SM ASSETS... : : Financial assets and cash 14.975 14,338 Receivables 3,188 : 4,286 Recoveries on outstanding claims 3,143 3.319 Deferred insurance costs 1,341 1,680 Jntangibles 1,039. oa 872 ABC financial assets pledged for funds at. Lloyd's s 998 7
Slide 20: Balance sheet
Balance sheet “oo 30 June 2005 - Net invested funds increased by $809 million since 31 December 2004. due to the impact-of improved fixed interest : and cash yields, higher equity markets and Positive cashflow in the period Approximately. 84% of fixed interest and cash i is AA rated or better Approx
Slide 21: Balance sheet
Balance sheet -. Net invested funds. 31 Dec 2004 30 June 2005. SMH SMH Cash and cash equivalents “1,492 9.5 1,121 75 Short term money. 5,362. 34.1. 5,482 - 36.6 > Fixed interest secutities and other TAG2 - ALT 6,957 46.5 Equities 1344-0 8.5. 1,383. 9.2 Property 3] 0.2 32 0.2 Total financial. assets
Slide 22: Balance sheet
“Balance sheet | 30. June 2005. Receivables. aver.90 days have reduced with conservative provisions held for doubtful premium debtors. Reinsurance recoveries on outstanding claims increased from $3.1 billion to, $3.2 billion, Included | is $1 .5 billion for incurred but not reported claims. Provisio
Slide 23: Balance sheet
Balance sheet 30 June 2005 ms ~ Group. policy of matching assets and liabilities i inlocal currency:and using borrowings and hedges to protect... shareholders’ funds in overseas subsidiaries was maintained Borrowings reduced to $1,742 million from $1, 805 million at-3] ~.December 2004. due mainly to
Slide 24: Capital adequacy June 2005
| Capital adequacy 30 June 2005 -.QBE estimates the Group capital adequacy multiple is around - 1.8.times the minimum capital requirement unchanged from 31 December 2004 - - Subordinated debt and some.of the hybrid securities are included. as tier 2 capital for determining the.Group's capital ~ adeq
Slide 25: Australia Pacific Asia Central Europe (APACE)
‘Australia Pacific Asia Central Europe ~ (APACE) ~ halt year ¢ ended 30 June 2005 | Pacific Asia Australia | Central Europe Total APACE 2005... 2004 2005....2004 2005. 2004 : Gross. written premium $M. 1,255 95) 358 2 333. ] 1613 1,284 Gross earned premium $Me 1,199 899 348 323. 1,547.00 04,222.> “N
Slide 26: Australia Pacific Asia Central Europe (APACE)
"Australia Pacific Asia Central Europe | (APACE) halt year ended 30 June.2005 ‘ ~ Gross written premium for Australio Up 32% from acquisition of ING!s share in «the QBE Mercantile Mutual joint venture, Gross written. premium for Pacific;. Asia, Central Europe (PACE) increased. by 8% Weighted average
Slide 27: European operations
_ European operations half year ended 30. June 2005 QBE insurance Lioyd's division Total European (Europe) (Limit) operations 2005 --2004. 2005 --2004 - 2005... 2004 “Gross written premium $M. | 1,407 1,285 | 1,393. 1,502..} 2,800 2,787 : Gross earned premium.$M . 1.138 “ 1,037 1,015 - 1,082. 2ASS B
Slide 28: The Americas
the Americas half year ended 30 June 2005 2005 2004 Gross. written premium $M o> oe TIO 692 ‘Gross earned premium $M ene oe 631 6d Net earned premium $M. — Ss a 2390 “380 Claims ratio % a : a 61.3 62.0- “Commission ratio % SAE NN oe a ae “23.2 Expense ratio % ere vas oS ae 6.4 : 6.1 “Combined operal
Slide 29: Investment income
Investment income — 2005 2004 $M $M ‘Dividends. 25 30- Interest. 281. 220 - Other income 9 7 ee 85 957 Realised gains (losses) .on fixed interest securities - ZS BPs -. Realised gains on equities and properties Pee 38. 236" Unrealised gains (losses) on fixed interest securities . 22: : (39) ; Unreal
Slide 30: Comparison of fixed interest and cash yields versus actual yields
Comparison of fixed interest and - _cash yields versus actual yields — ; ; : Actual Cee sap kona -| Average. AAA | “yields Investment mix -| Portfolio) Current cash yields || achieved 30 June.2005....| mix by ~| cash rate % | by QBE~ ; cs currency % % % “| 2001 “4.63 : 5.83 Australian dollar 30 5.50
Slide 31: Investments currency mix
Investments currency. mix. at 30 June 2005 Market value of financial assets and cash — a Other = Sterling ~ 13% (13%) 35% (37%) AUD ~ USD.” 22% (21%) 30% (29%) Market value of listed equities Other 12% (19%) aA Sterling 27% (21%) 4 AUD 34% (37%) ~ USD 27% (23%)
Slide 32: Acquisitions
_Acavisitions | half year ended 30 june 2005 Acquisitions made in the period were: ~~ Greenhill underwriting agency in Western Europe. = Central de Seguros in Colombia ot National Farmers Union Property and Casualty company in the US. These acquisitions will add approximately $400. million of annual
Slide 33: 2005 outlook
2005 outlook ‘Subject to no material movement in current exchange rates; large losses and catastrophes not exceeding the allowance.in our. >... ~-business plans; and no major fallin equity. markets or interest rates: ‘* Target-range for insurance profit margin upgraded to 15% 16% through 2005 from t
Slide 34: 2005 projected gross written premium
2005 projected gross —wiifien. premium — ee -$ABn ‘Australia. . - . A$2.4 billion eee DAR OO - PACE (24 countries) - A$0.8 billion 0.8 >. US/Latin America ea ~ US$1.2 billion 15° European operations £20 billion eA * Assumes A§.to US$ 79c and A$ to £42p, average rates :
Slide 35: 2005 outlook
2005 outlook 7 Our-capital adequacy is expected to remain strong with sufficient shareholders’ funds to cover.current acquisition activity. ; Commission ratios are expected to.remain unchanged ‘Continue focus on expense management - expense ratio. ‘target-12.3% or less Target tax.expense rate of 27%
Slide 36: 2005 outlook
2005 outlook ~ Increase net invested funds from $14 billion at 30 June 2005 to. “$15 billion by the end of 2005 . Recent increases in interest yields on our substantial US cash - and fixed interest-portfolios will assist investmenti income in ~-second half and through 2006. : Maintain borrowing and.
Slide 37: 2006 outlook
2006 outlook | -¢ Premium rate. expectations and ine strength. of our insurance liabilities give us. confidence for. continuation of.a strong level of. insurance : profitability : Premium growth will be driven by “ acquisitions" made in 2005. ~ Currently assessing 15 opportunities around the world.
Slide 38: Historical share price performance
Historical share - price performance "An investment in QBE has outperformed the Austratian All Ordinaries Index - -and inflation with.a.compound average annual growth rate.of 17. 3% ¢ over s years, 21.1% over 10 years and 22.2% over 20 years Sees : www QBE Share Price Performance —QBE Share Price Pe
Slide 39: Internet - www.qbe.com
Internet — - www.qbe.com
Slide 40: QBE Insurance Group
ee | en i 2 ‘QBEINSURANCEGROUP
Slide 41: Results for the half year ended 30 June 2005 & outlook
| BE INSURANCE GROUP UMITED- RESULTS | for the half year ended 30 June 2005 | & outlook | All amounts i in Australian dollars unless otherwise stated. Comparative numbers for the half year ended 30 June 2004 and the year ended 31. December 2004 have been restaled under Australian Equivatents to. Int
Slide 42: Half year ended June 2005
ae half f year ended 30 June 2005 Record profit after tax, “UP 43% fo $491 milion (2004 $343 ~million)- Profit before tax up 57% to $675 million (2004 :$429 million) Insurance profit up 30% to $553 million (2004 : $425 million) with. aninsurance profit margin of 15. 8% of net earned premium. (2004 2
Slide 43: Highlights
_ Highlights | “halt year ended 30 June 2005: + Gross written premium up 8% to $5,123 million (2004: $4,763 million) due to.the acquisitions in the second half of 2004 Gross. written premium growth 9% adjusted for foreign: exchange movements : “Gross earned premium UP.9% to $4,331 million Net earned
Slide 44: Highlights
~ Highlights: halt year ended 30 tune: 2005 : Reinsurance costs decreased from 22% to. 19% of gross earned “premium.due mainly to synergies from ocauisitions and the UK ~ restructure in 2004. Net claims ratio reduced slightly. from 61 6% to 61.0% ; Improvements i in the claims ratio were achieved fr
Slide 45: Highlights
- Highlights | half year ended 30 June 2005 oe Outstanding claims = probability of adequacy slightly j in eXCess of ourinternal target range at 95%. «. Increase is warranted at half year due to cyclical nature of exposures and historically higher catastrophe activity | inthe- second half-of the year
Slide 46: Highlights
_Hightig hts | hall year ended a0: June 2005 Commission ratio was 17.0% (2004: 16.8%) reflecting a change in mix.of business and higher commissions from the ING joint venture acquisition in Australia’. ws Expense ratio increased from 12.1% to 12. 3% impacted by. costs associated with the consolidati
Slide 47: Highlights
“Highlights halt year ended 30 June 2005. © Gross investment. yield (before borrowing costs, fx ond expenses) Was 5.3%(2004 + 2.9%) o> Netinvestment income for. the half year increased to $337 million (2004 : $132 million). Investment income includes realised and unrealised equity and property gains
Slide 48: Shareholder returns
“Shareholder returns half year ended 30 June 2005 interim dividend 33.0¢ per share, 50% franked (2004: 24.0¢, 50% franked] --Ex dividend.date. 2.23 August 2005 - Record date ne 29 August 2005 = Payment date 16 September 2005. . Interim dividend payout $254 million, up 55% from the interim - dividend
Slide 49: Shareholder returns
"Shareholder returns half year ended 30 June 2005, Earnings per-share* os 2005 7 2004 -Basic sup. 27% 64.6 cents. 80.7 cents - Diluted** up 32%. 59.2 cents... 44.8 cents - Shares notified to ASX of 768 million (2004 : 683 million) Diluted earnings per share.includes. 68. million ordinary shares.’ -
Slide 50: Stronger average A$ in 2005
: Stronger average AS in 2005 : Major currency changes 30 June 2005 USD 0.82 0.80 0.78 0.76 0.74 0.72 0.70 0.68 0.66 0.64 0.62 @) 30 June 2005 closing rates: 0.60 USS up 2.8% 0.58 £ sterling down 4.0% 0.56 <= euro down 8.3% 054 0.52 0.50 12005 half year cumulative average rate: US$ down 4.3% £ sterl
Slide 51: Geographical diversification
Geographical diversification ~ gross earned premium ~ half yeare ended 30 June 2005 Lloyd's division eee oor "23% (27%) “Australia 7 os 28% (23%) Pacific Asia “Central Europe QBE Insurance (Europe) - 8% (8%) the Americas 15% (16%)
Slide 52: Worldwide portfolio mix
Worldwide portfolio mix. <~ gross earned premium half year ended 30 June 2005. Professional indemnity Workers’ compensation 9% (11%) ee . . 9% (9%) | Financial and credit 2% (3%) Marine.and aviation a 6% (6%) Liability 23% (19%) i : -Property 29% (32%) Other 1% (2%) Motor and motor- Pinte casually A
Slide 53: Worldwide operations
Worldwide operations | : HALF. YEAR - Bes FULL YEAR wee Dec Dec 2004 2003*** G66 00-8388. 8571. 7,816 6,781 6,036 tous written premium Si Gross.earned premium $M Net.earned.premium $M Claims ratio %. 61.3 63.3. Commission ratio% 17.5 18,2 -Expense ratio Jo* 12.4 12.3 Combined eperding ratio % 91 a P
Slide 54: Worldwide operations
GWP*~ Worldwide operations halt year ended 30 June 2005 Growth: COR --. Insurance Net profit after - : ; profit margin tax and we : minorities 2005 2005 2005 .-..2004-| 2005 -.. 2004 2005. 2004 SM Oo % Foo Ny % Fo | SM SM Austratia 1.255.032 99.3 89.3 | 18.1149] 138 135 ‘Pacific. Asia Central Europe
Slide 55: Key Australian equivalents to AIFRS impacting QBE Group
Key Australian equivalents to AIFRS impacting QBE Group | Standard Change Impact AASB.119: Employee benefits Deficits and surpluses on defined benefit superannuation schemes fo be included on the balance sheet Total equity reduced by $142 million - affer.tax at. 31. December 2004 ~ AASB 2: Shore-bas
Slide 56: Reconciliation of total equity under previous AGAAP to AIFRS
Reconciliation of total equity under previous AGAAP to that under AIFRS | 7 Brought forward equity-under AIFRS 31 December 30 June 1 January 2004 ~ 2004 ~~ 2004 $M $M $M . Brought forward equity under previous AGAAP 4,480 3,677 3,368 Defined benefll superannuation scheme obligations : (142) qa 22} “
Slide 57: Balance sheet
Balance sheet - “31 Dec 2004.” 30 June 2004 - $M ~ SM ASSETS... : : Financial assets and cash 14.975 14,338 Receivables 3,188 : 4,286 Recoveries on outstanding claims 3,143 3.319 Deferred insurance costs 1,341 1,680 Jntangibles 1,039. oa 872 ABC financial assets pledged for funds at. Lloyd's s 998 7
Slide 58: Balance sheet
Balance sheet “oo 30 June 2005 - Net invested funds increased by $809 million since 31 December 2004. due to the impact-of improved fixed interest : and cash yields, higher equity markets and Positive cashflow in the period Approximately. 84% of fixed interest and cash i is AA rated or better Approx
Slide 59: Balance sheet
Balance sheet -. Net invested funds. 31 Dec 2004 30 June 2005. SMH SMH Cash and cash equivalents “1,492 9.5 1,121 75 Short term money. 5,362. 34.1. 5,482 - 36.6 > Fixed interest secutities and other TAG2 - ALT 6,957 46.5 Equities 1344-0 8.5. 1,383. 9.2 Property 3] 0.2 32 0.2 Total financial. assets
Slide 60: Balance sheet
“Balance sheet | 30. June 2005. Receivables. aver.90 days have reduced with conservative provisions held for doubtful premium debtors. Reinsurance recoveries on outstanding claims increased from $3.1 billion to, $3.2 billion, Included | is $1 .5 billion for incurred but not reported claims. Provisio
Slide 61: Balance sheet
Balance sheet 30 June 2005 ms ~ Group. policy of matching assets and liabilities i inlocal currency:and using borrowings and hedges to protect... shareholders’ funds in overseas subsidiaries was maintained Borrowings reduced to $1,742 million from $1, 805 million at-3] ~.December 2004. due mainly to
Slide 62: Capital adequacy June 2005
| Capital adequacy 30 June 2005 -.QBE estimates the Group capital adequacy multiple is around - 1.8.times the minimum capital requirement unchanged from 31 December 2004 - - Subordinated debt and some.of the hybrid securities are included. as tier 2 capital for determining the.Group's capital ~ adeq
Slide 63: Australia Pacific Asia Central Europe (APACE)
‘Australia Pacific Asia Central Europe ~ (APACE) ~ halt year ¢ ended 30 June 2005 | Pacific Asia Australia | Central Europe Total APACE 2005... 2004 2005....2004 2005. 2004 : Gross. written premium $M. 1,255 95) 358 2 333. ] 1613 1,284 Gross earned premium $Me 1,199 899 348 323. 1,547.00 04,222.> “N
Slide 64: Australia Pacific Asia Central Europe (APACE)
"Australia Pacific Asia Central Europe | (APACE) halt year ended 30 June.2005 ‘ ~ Gross written premium for Australio Up 32% from acquisition of ING!s share in «the QBE Mercantile Mutual joint venture, Gross written. premium for Pacific;. Asia, Central Europe (PACE) increased. by 8% Weighted average
Slide 65: European operations
_ European operations half year ended 30. June 2005 QBE insurance Lioyd's division Total European (Europe) (Limit) operations 2005 --2004. 2005 --2004 - 2005... 2004 “Gross written premium $M. | 1,407 1,285 | 1,393. 1,502..} 2,800 2,787 : Gross earned premium.$M . 1.138 “ 1,037 1,015 - 1,082. 2ASS B
Slide 66: The Americas
the Americas half year ended 30 June 2005 2005 2004 Gross. written premium $M o> oe TIO 692 ‘Gross earned premium $M ene oe 631 6d Net earned premium $M. — Ss a 2390 “380 Claims ratio % a : a 61.3 62.0- “Commission ratio % SAE NN oe a ae “23.2 Expense ratio % ere vas oS ae 6.4 : 6.1 “Combined operal
Slide 67: Investment income
Investment income — 2005 2004 $M $M ‘Dividends. 25 30- Interest. 281. 220 - Other income 9 7 ee 85 957 Realised gains (losses) .on fixed interest securities - ZS BPs -. Realised gains on equities and properties Pee 38. 236" Unrealised gains (losses) on fixed interest securities . 22: : (39) ; Unreal
Slide 68: Comparison of fixed interest and cash yields versus actual yields
Comparison of fixed interest and - _cash yields versus actual yields — ; ; : Actual Cee sap kona -| Average. AAA | “yields Investment mix -| Portfolio) Current cash yields || achieved 30 June.2005....| mix by ~| cash rate % | by QBE~ ; cs currency % % % “| 2001 “4.63 : 5.83 Australian dollar 30 5.50
Slide 69: Investments currency mix
Investments currency. mix. at 30 June 2005 Market value of financial assets and cash — a Other = Sterling ~ 13% (13%) 35% (37%) AUD ~ USD.” 22% (21%) 30% (29%) Market value of listed equities Other 12% (19%) aA Sterling 27% (21%) 4 AUD 34% (37%) ~ USD 27% (23%)
Slide 70: Acquisitions
_Acavisitions | half year ended 30 june 2005 Acquisitions made in the period were: ~~ Greenhill underwriting agency in Western Europe. = Central de Seguros in Colombia ot National Farmers Union Property and Casualty company in the US. These acquisitions will add approximately $400. million of annual
Slide 71: 2005 outlook
2005 outlook ‘Subject to no material movement in current exchange rates; large losses and catastrophes not exceeding the allowance.in our. >... ~-business plans; and no major fallin equity. markets or interest rates: ‘* Target-range for insurance profit margin upgraded to 15% 16% through 2005 from t
Slide 72: 2005 projected gross written premium
2005 projected gross —wiifien. premium — ee -$ABn ‘Australia. . - . A$2.4 billion eee DAR OO - PACE (24 countries) - A$0.8 billion 0.8 >. US/Latin America ea ~ US$1.2 billion 15° European operations £20 billion eA * Assumes A§.to US$ 79c and A$ to £42p, average rates :
Slide 73: 2005 outlook
2005 outlook 7 Our-capital adequacy is expected to remain strong with sufficient shareholders’ funds to cover.current acquisition activity. ; Commission ratios are expected to.remain unchanged ‘Continue focus on expense management - expense ratio. ‘target-12.3% or less Target tax.expense rate of 27%
Slide 74: 2005 outlook
2005 outlook ~ Increase net invested funds from $14 billion at 30 June 2005 to. “$15 billion by the end of 2005 . Recent increases in interest yields on our substantial US cash - and fixed interest-portfolios will assist investmenti income in ~-second half and through 2006. : Maintain borrowing and.
Slide 75: 2006 outlook
Premium rate expectations and the strength of our insurance liabilities give -us confidence for. continuation of a strong level of i insurance : profitability Premium growth will be driven. by “acquisitions” made in 2005. Currently assessing 15.small to medium. opportunities around the world «Premiu
Slide 76: Historical share price performance
Historical share - price performance "An investment in QBE has outperformed the Austratian All Ordinaries Index - -and inflation with.a.compound average annual growth rate.of 17. 3% ¢ over s years, 21.1% over 10 years and 22.2% over 20 years Sees : www QBE Share Price Performance —QBE Share Price Pe
Slide 77: Internet - www.qbe.com
Internet — - www.qbe.com
Slide 78: QBE Insurance Group
ee | en i 2 ‘QBEINSURANCEGROUP
Slide 79: Results for the half year ended 30 June 2005 & outlook
| BE INSURANCE GROUP UMITED- RESULTS | for the half year ended 30 June 2005 | & outlook | All amounts i in Australian dollars unless otherwise stated. Comparative numbers for the half year ended 30 June 2004 and the year ended 31. December 2004 have been restaled under Australian Equivatents to. Int
Slide 80: Half year ended June 2005
ae half f year ended 30 June 2005 Record profit after tax, “UP 43% fo $491 milion (2004 $343 ~million)- Profit before tax up 57% to $675 million (2004 :$429 million) Insurance profit up 30% to $553 million (2004 : $425 million) with. aninsurance profit margin of 15. 8% of net earned premium. (2004 2
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