Qbe Insurance Group Limited · ASX:QBE
Qbe Insurance — FY2024 Earnings Presentation
25 slides from Qbe Insurance's earnings presentation, Feb 21, 2025
Slide 1: ASX cover letter: QBE Presentation on the 2024 results
QBE Insurance Group Limited ABN 28 008 485 014 Level 18, 388 George Street, SYDNEY NSW 2000 Australia GPO Box 82, Sydney NSW 2001 telephone + 612 9375 4444 • facsimile + 612 9231 6104 www.qbe.com 21 February 2025 The Manager Market Announcements Office ASX Limited Level 4 Exchange Centre 20 Bridge S
Slide 2: 2024 Result
@OBE 2024 Result 21 February 2025 QBE INSURANCE GROUP LIMITED Enabling amore resilient future — i, 4
Slide 3: Important notice and disclaimer
no material change to key inflation and economic growth forecasts; in each case, materially from the expectations described in this presentation. Should one or more of these assumptions prove This presentation contains general background information about the Group’s activities current incorrect, ac
Slide 4: 2024 key metrics
9.7% 95.2% 7.9% 95.9% 1,729 175 87 1,362 138 62 664 65 39 18.2 1.82 1.86 11.5 15.8 1.79 9.8 8.8 8.3
Slide 5: 2024 result highlights
Average rate increase Catastrophe claims Total investment income Capital above S&P ‘AA’ 50% payout ratio +5.5% below allowance of $1,488M level Ex-rate growth Stable prior year 4.3% exit yield Debt to total capital 19.9% 20% franked (0%) development
Slide 6: Enabling a more resilient future, through sustainable growth and portfolio optimisation
Uniquely positioned international carrier with strong presence and relationships across key markets Launching purpose, vision and With an established track record of strategic priorities consistent performance Portfolio balance and diversification drive stable and predictable underwriting performanc
Slide 7: Much improved earnings quality with greater breadth, diversification and visibility
~$1.2B 2% Consumer 8% 87% Crop & LMI 82% Much improved earnings quality with 13% Reinsurance 74% greater breadth, diversification and 68% 13% visibility 2% 27% Specialty Profitable 33% Portfolio exits to meaningfully reduce drag from underperforming cells 37% Commercial 28% Unprofitable (13%) (18%)
Slide 8: Combined operating ratio, returns and outlook trends
220 AASB 17 98 impact 10.5 15.8 18.2 10.3 8.3 (83) (232) FY21 FY22 FY23 FY24 54.4 54.4 53.8 53.0 1.4 1.4 0.9 95.0 95.9 95.2 0.1 93.1 ~92.5 FY211 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY25 Outlook Note: 1. FY21 excludes the impact of COVID-19 and the reinsurance loss portfolio transf
Slide 9: Growth strategy and premium growth
10% 6% 6% GWP 8.3 8.6 5% $7.2B 7.5 6.1 5.4 4.3 4.7 2.2 2.6 1.6 1.9 Inclusive of >$1B of portfolio exits FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 21.7 22.4 18.5 20.0 ▪ Deepen core franchises through targeted investment ▪ Build differentiating capability in data and technology ▪ Exp
Slide 10: Near term capital flexibility remains key
Near term capital flexibility remains key, given profitable growth opportunities and strong financial returns Potential for improved organic capital generation going forward, as Aspiration to deliver sustainable mid-single strain from high inflationary environment moderates Sustainable digit volume
Slide 11: Financial performance
Financial performance
Slide 12: Improvement in profitability underscored by more resilient underwriting result and strong investment returns
Improvement in profitability underscored by more resilient underwriting result and strong investment returns FY23 FY24 Gross written premium $M 21,748 22,395 Net insurance revenue $M 16,599 17,807 Net claims ratio % 65.1 63.2 95.2 93.1 59.1 59.7 4.7 4.9 Net commission ratio % 18.3 17.7 Ex-cat Ex-cat
Slide 13: Organic growth continues across breadth of opportunities
Organic growth continues across breadth of opportunities, partially offset by exited property lines and Crop or ~2% excluding property exits or ~13% of ~$200M North America (4) (6) 2 excluding non- core exits of 11% NA (ex-Crop) (2) (7) (4) ~$400M (1%) NA (ex-Crop & Exits) 13 10 17 (2%) Internationa
Slide 14: Combined operating ratio and premium rate trends
3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 % COR 95.2 93.1 15 10.0% 9.3% 4.9% Expenses 11.8 12.2 12.3% 6.7% 10.9% 6.9% 6.4% 3.0% 10 10 10 66% 64% 67% 68% 68% 68% 8 Commission 18.3 17.7 5.5% 4.2% 2.8% 6 Cat 6.6 5.9 5 6.0% 5.2% 4.4% 4.0% 2.9% 2.7% 84% 85% 88% 88% 88% 87% 13.2% 9.9% 7.0% FY21 FY22 FY23 FY24 12.5% 1
Slide 15: Divisional combined operating ratios
COR (%) 103.7 98.9 COR (%) 89.5 88.7 COR (%) 93.6 92.0 Expenses 9.1 9.0 Expenses 11.6 11.3 Expenses 13.9 13.8 Commission 21.6 20.5 Commission 17.9 17.5 Commission 15.7 15.1 Cat 4.9 4.6 Cat 6.6 5.7 Cat 8.4 7.5 Ex-cat 65.7 68.2 59.1 Ex-cat 54.3 55.1 Ex-cat 58.2 PYD 2.4 (3.4) (0.9) (0.9) (2.6) (3.5) PY
Slide 16: Go-forward business has a well-established track record of performance
Go-forward business has a well-established track record of performance, with attractive growth opportunities Commercial ~$1.1B Non-core other (~220) (~170) (~170) (~260) • Property programs 95% (~60) (~50) 93% 94% 94% • Workers’ compensation programs Middle-market (~80) (~230) (~220) (~90) • Special
Slide 17: 2025 reinsurance renewal completed broadly as expected
2025 reinsurance renewal completed broadly as expected • 2025 reinsurance program remains broadly consistent • Lower catastrophe retentions achieved on account of recent portfolio optimisation initiatives (from $400M to $300M) ~350 ~325 ~300 ~260 ~250 • 2025 catastrophe allowance set at $1,160M. Pro
Slide 18: Investment performance and portfolio composition
Credit Spread Contribution CFI return (ex-risk-free rate) 1,219 4.6 Weighted Average RFR 5.0% 4.9% 4.7% 18 Feb Credit spreads MTM 63 0.3 4.6% 4.6% 4.2% 4.3% 4.3% Risk assets 295 7.5 Expenses and other (89) (0.3) Corporate bonds Short-term money Growth assets Government bonds Other fixed income Enhan
Slide 19: Strong capitalisation and capital position
1.75 1.79 1.82 1.86 PCA 18% 0.15x 1.86x 1.10 1.16 1.23 1.31 CET1 1.82x 16% ~1.77x ~(0.09x) 24.1 23.7 21.8 19.9 FY21 FY22 FY23 FY24 (0.11x) 31.8 31.0 27.9 24.8 FY23 Dividends FY24 Final FY24 FY23 FY24 paid divi- pro dend forma • Strong capitalisation, with continued • Regulatory capital at the top en
Slide 20: Extending a track record of growth, strong returns and greater resilience
Extending a track record of growth, strong returns and greater resilience • Premium rate increases expected to remain supportive • 2025 constant currency GWP growth • Markets remain conducive to the execution of our growth strategy of around the mid-single digits • Portfolio exits to impact GWP by ~
Slide 21: Appendix
Appendix
Slide 22: Divisional financial results
FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 Gross written premium $M 21,748 22,395 7,555 7,277 8,802 9,837 5,392 5,281 Ex-cat claims $M (9,808) (10,625) (3,150) (3,336) (3,761) (4,368) (2,843) (2,948) Insurance revenue $M 20,825 21,778 7,529 7,220 8,000 9,101 5,29
Slide 23: QBE is an international P&C insurer organised over three divisions
QBE is an international P&C insurer focused on commercial and specialty (re)insurance, organised over three divisions Group Property Casualty Other 4% 5% 24% 18% 12% ~34% ~32% ~34% Commercial Commercial 32% 40% Specialty Specialty 12% 44% Reinsurance Reinsurance 12% North America Crop & LMI Crop & L
Slide 24: Reinsurance program structure
Main Cat XOL 1st layer • $1.6B xs $300M • NA & ANZ Cat Pacific Island buy down 2nd layer • $80M xs $20M • NA & ANZ: $900M xs $1.9B • Partial placement $2,500M xs $300M • ROW: $900M xs $200M NA and ANZ 1 reinstatement $900M xs $200M ROW 1 reinstatement Risk • Main cover $250M xs $50M • Clash section
Slide 25: Enabling a more resilient future
Enabling amore resilient future ® QBE