QBE Insurance first-half profit rises after streamlining

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QBE Insurance first-half profit rises after streamlining

QBE Insurance Group said on Thursday its first-half net profit rose, helped by an improved performance in several regions and a more streamlined structure after offloading several of its businesses over the past year.

The global insurance provider reported a net profit of $358 million for the six months ended June 30, compared to $345 million a year ago.

"With these appointments we are continuing to build on our depth of insurance reinsurance experience at board level," QBE chairman Marty Becker said.

"With these appointments we are continuing to build on our depth of insurance reinsurance experience at board level," QBE chairman Marty Becker said.Credit: Bloomberg

Australia's third-biggest insurer by market value said its adjusted combined operating ratio (COR) was 95.8 per cent, up slightly from 94.5 the previous year and within the lower range target the company set.

The COR denotes the percentage of claims payouts against premium income. The higher the figure, the greater the payouts versus premium income, and the bigger the burden on the insurer.

Its endeavour to streamline its business paid off, with it exiting areas of business that generated an underwriting loss of over $200 million in 2017, the company said, but added, the full implementation of all measures would take several years more.

Earlier in the year, QBE sold its Latin American operations to Zurish, shifting focus to its Asia-Pacific and North America units. Continuing to make good on its promise to be smaller and less complex, QBE recently offloaded its travel insurance business to health insurer NIB Holdings for $25 million.

With the company's operations and focus, now, narrowing to a handful of regions, the company posted improvements in North American, with an improved COR of 97.8 per cent from 98.2 per cent the prior year.

The insurer's struggling Asia-Pacific has been of particular concern, but measures to improve poor its underwriting performance started to show results with its COR dropping to 108.5 per cent from 109.1 per cent.

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It also reiterated its commitment to the three-year share buyback of up to $1 billion. Meanwhile, setting aside a interim dividend of 22¢, in line with last year.

With its divested Latin American operations no longer included, the company has revised its COR for 2018 marginally lower to 95 to 97 per cent.

Reuters

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