QBE, the Sydney headquartered global insurer, has delivered one of its strongest underwriting showings in years, pairing it with resilient investment income and using the combination to lift profit and step up shareholder returns. The results were presented at a briefing this morning by group CEO, Andrew Horton (main picture) and group CFO, Chris Killourhy. They will likely be closely analysed by industry stakeholders for learnings around pricing discipline, capacity and appetite across key commercial lines.

The global insurer posted statutory net profit after tax of US$2,157 million, up from US$1,779 million in FY24. On an adjusted basis, profit rose to US$2,132 million from US$1,729 million, translating to an adjusted return on equity of 19.8%.

The higher earnings and underwriting capacity could provide brokers with even more capacity and competition in the already soft or softening insurance market.

Underwriting: better than guidance, helped by a lighter cat year

One positive signal from the result is QBE’s combined operating ratio (COR), which improved to 91.9% from 93.1% a year earlier and came in ahead of the group’s 92.5% guidance. This suggests QBE is not relying solely on price momentum, but is also benefiting from mix, portfolio actions and, importantly, lower catastrophe costs.

Catastrophe claims were US$751 million, equal to a 4.1% catastrophe claims ratio, down sharply from US$1,048 million (a 5.9% ratio) in the prior year and below QBE’s FY25 catastrophe allowance of US$1,160 million. That improvement is a significant part of the year-on-year underwriting lift and will be a reminder to the market that “normalised” catastrophe assumptions still leave room for volatility - particularly in property lines.

Outside catastrophe experience, QBE’s underlying claims performance was broadly stable, with an ex-cat claims ratio of 59.8% (from 59.7%). The company noted that, stripping out risk adjustment and Crop, the ex-cat claims ratio rose to 54.9% from 53.0%, citing adverse experience in some portfolios, elevated large losses and business mix shift. That commentary is a useful reality check for brokers: even as premium rates moderate, loss trends and large-loss activity remain a live issue, and insurers are likely to keep scrutiny tight around risk selection, limits, deductibles and risk improvement evidence.

Commissions and expenses nudged higher as a proportion of premium. The net commission ratio increased to 18.1% from 17.7%, while the expense ratio rose to 12.4% from 12.2%. For intermediated markets, the commission line will attract attention: it can reflect changing mix (more broker-distributed business and specialty lines), and it underscores that distribution remains central to growth - but also that cost-to-serve is still a battleground, particularly as insurers invest in technology and operational change.

Premium growth: above guidance, led by International

QBE reported gross written premium (GWP) of US$23,959 million, representing 7% growth, or 8% excluding exited portfolios, beating its mid-single-digit growth guidance. Ex-rate GWP growth was 6% at group level, with North America up 4%, International up 11%, and Australia Pacific flat (0%).

The strong International growth alongside a flat Australia Pacific result may feed different appetite and pricing behaviours depending on the local loss environment and capacity conditions.

QBE also pointed to progress in areas including QBE Re, accident & health, portfolio solutions and cyber. According to industry sources, these are lines where product development, wording detail and risk information quality can be decisive and where insurer growth ambitions often come with tighter underwriting frameworks rather than broad-based loosening.

Investment income: steady core, strong risk assets

QBE’s result was also supported by continued investment performance, with total investment income of US$1,633 million, equating to a 4.9% return (unchanged from FY24’s 4.9%). Core fixed income returned 4.2% (US$1,184 million), while risk assets generated an exceptional 9.6% return (US$461 million).

Strong investment income can reduce pressure on insurers to “chase” underwriting margin, but it could also enable more competitive positioning. However, the core message from QBE’s underwriting result could be that profitability is being earned in the book and that tends to support more sustainable capacity decisions across the cycle.

Capital, dividends and what it signals to brokers

QBE’s indicative APRA PCA multiple was 1.87x, slightly up from 1.86x and above its 1.6–1.8x target range. The insurer declared a final dividend of 78 Australian cents per share, taking the full-year dividend to A$109c, up 25%, with a 50% payout ratio.

The combination of strong profit, a sub-92 COR and rising dividends sends a clear message: QBE believes its portfolio optimisation and performance stabilisation are working, and it expects conditions to remain constructive. For brokers, the near-term implication is not necessarily cheaper premiums - competition may increase “in some classes,” as management noted - but potentially a more predictable underwriting partner with clearer appetite, less volatility from legacy problem segments, and a willingness to grow where risk quality stacks up.

Looking ahead, QBE reaffirmed a FY26 outlook that includes a 92.5% combined operating ratio, mid-single-digit GWP growth on a constant currency basis, and 15%+ adjusted ROE. The market takeaway is that QBE is trying to hold the line on discipline while still expanding - a balance brokers will be testing in placements throughout 2026 as clients push back on pricing and coverage constraints, and insurers weigh growth against the ever-present threat of large-loss and catastrophe surprises.