QBE shrugs off dour market conditions to grow its FY22 net profit by $20m

Nick Sundich Nick Sundich, February 17, 2023

QBE (ASX:QBE) managed to grow its FY22 NPAT by $20m in spite of difficult market conditions. It isn’t an easy time to be an insurer, but the company’s premium growth was enough to counter the market. 

 

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QBE records a solid result

QBE’s FY22 NPAT was US$770m, up from US$750m in FY21, and it recorded a 10.5% cash Return on Equity. 

The company paid a total dividend of 3c per share, representing a payout ratio of 48% of adjusted cash profit and a 2.9% yield at yesterday’s closing share price. 

 

QBE (ASX:QBE) 1-year share price chart, log scale (Source: TradingView)

 

Premiums make up for difficult conditions

There were difficult economic conditions during 2022 with heightened inflation, geopolitical tensions, elevated catastrophic activity and poor financial market conditions.

Indeed, QBE recorded an investment loss of $776m after a $122m return in FY21. This was due to unrealised losses associated with the significant increase in bond yields.  

However, the insurer’s customers see the need for its service more than ever and were willing to pay more for an additional layer of protection. 

The company recorded gross written premium growth of 13% and a groupwide renewal increase of 7.9%. 

Looking to FY23, the company promised gross written premium growth of mid to high single digits. 

 

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