QBE's (ASX:QBE) 1H21 profit rebounds with a dividend jump

Company News

by Melissa Darmawan

QBE’s (ASX:QBE) profit has bounced back from a loss in the first half of the year, with a 175 per cent boost to their interim dividend from a year ago thanks to a material turnaround in both underwriting and investment returns.

A statutory net profit after tax of US$441 million was posted from a net loss after tax of US$712 million in the prior period smashing analyst's expectations while their revenue rose 14 per cent to $US9.1 billion in the first half of the year from US$7.9 billion.

Gross written premium grew by 20 per cent to US$10.2 million reflecting the strong premium rate environment as well as improved customer retention and new business growth across all regions.

Their net catastrophe claims came in at US$462 million or 7.0 per cent of net earned premium compared with 5.5 per cent in the first half of 2020. The spillover in their allowance was over by 1.6 per cent of net earned premium.

Catastrophe costs included the winter storm Uri in Texas, widespread flooding on the east coast of Australia, Cyclone Seroja and bush fires in Western Australia and storm and flood damage in Melbourne.

The company’s net investment income clocked in at US$58 million from a net loss of US$90 million underpinned by narrower credit spreads and increased returns on growth assets partly offset by the higher risk-free rates amid market volatility due to Covid-19.

An interim dividend of 11 Australian cents per share, up 6 cents Australian cents set to be paid on 24 September this year.

Shares in QBE are trading 7.9 per cent higher at $12.482.

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