QBE Insurance Group (ASX:QBE): Is this the 4-decade long Sydney Swans sponsor the ASX insurer to buy?

If you’re a fan of sport, you’d know that QBE Insurance Group (ASX:QBE) have been a sponsor of the Sydney Swans for over 40 years – one of the longest-running sponsorships in global sport.

One not knowing anything else about the company would have to assume it must be doing something right to survive as long as it has in such a volatile industry as insurance. We thought for the sake of those investors, it was time to take a deep dive into this company.

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Overview of QBE Insurance Group (ASX:QBE)

In many respects, QBE is little different to its peers. It generates revenue by underwriting insurance policies, collecting premiums upfront, paying claims over time and investing the float until claims are settled. Profitability is driven by underwriting discipline, measured primarily through the combined operating ratio, and by investment income generated from the insurance investment portfolio.

Nonetheless, we reckon QBE is a standout among insurers because of its scale, geographical reach, long operating history, as well as a company in corporate insurance.

The company’s origins date back to 1886, when it was established in Townsville as the North Queensland Insurance Company to insure marine and trade risks. The modern QBE group was formed in 1973 following the merger of Queensland Insurance, Bankers’ & Traders’ Insurance Company and Equitable Life and General Insurance Company.

From the 1980s onwards, QBE pursued a long-running strategy of international expansion, primarily through acquisitions, transforming itself from a regional insurer into a global underwriting group with a strong presence in Australia, North America, Europe and Asia. It has not all been smooth though – there has been a significant portfolio reshaping in the US and Canada following the exit of underperforming lines.

2024 a good year, now for its 2025 results

QBE follows the calendar year, so is set to report 2025 results next month (i.e. February 2026). For the 2024 calendar year, the group delivered statutory net profit after tax of approximately US$1.8bn and adjusted net profit of around US$1.7bn, both materially higher than the prior year.

Gross written premium growth was modest but positive, supported by pricing actions and improved risk selection. Importantly, the combined operating ratio improved to just over 93%, reflecting better underwriting profitability. Investment income was also strong, benefiting from higher interest rates and disciplined asset allocation. Return on equity was in the high teens, highlighting improved capital efficiency.

Investors do have reason to be optimistic for its 2025 result as there was a US$1bn profit. Management reaffirmed guidance for mid-single-digit premium growth on a constant currency basis and a full-year combined operating ratio around the low 92% range.

Capital management remains a key focus, with QBE targeting a regulatory capital ratio that supports both organic growth and shareholder returns. The group has also signalled confidence in its balance sheet through dividends and, more recently, share buyback activity.

Analysts have some confidence

We’d imagine management will have a word or two to say at its 2026 results and that will provide more clarity. Analysts are optimistic about the company with a mean price of $22.20, more than 10% ahead of the current price. They expect a 2025 profit of almost $2bn and revenue of $18.8bn (mere 1% growth). But 2026 is anticipated to be a better year for the top line with $19.8bn revenue, although earnings are predicted to be flat.

The difficulty is that it could take just one catastrophic incident, whether a real-world catastrophe or downturn in the markets, for everything to change. Analyst estimates put the company at a modest 10.6x P/E but a 3.7x PEG. The P/E multiple is a discount compared to peers including Suncorp, IAG and Medibank.

What about the longer term

Looking ahead, QBE’s outlook is broadly constructive but not without challenges. Management has highlighted that premium rate increases in some markets are moderating after several years of strong pricing momentum, which may place pressure on top-line growth. At the same time, the company continues to prioritise underwriting discipline, portfolio optimisation and exits from lower-quality or subscale lines.

Exposure to natural catastrophes remains an inherent risk, particularly as climate-related volatility increases, but QBE has sought to mitigate this through reinsurance and tighter risk selection. Investment income should remain supportive so long as interest rates stay above long-term averages.

Conclusion

Overall, QBE enters the remainder of FY25 and into FY26 in a position of improved financial strength, with better underwriting performance, solid capital buffers and a clearer strategic focus than in prior years. While growth may be more measured than during peak hard-market conditions, the company’s emphasis on profitability, disciplined risk management and shareholder returns underpins a stable medium-term outlook.