QBE Insurance Group has issued its 2021 full year results, reporting a net profit after tax of US$750 million for the year ended 31 December 2021, compared with a net loss after tax of US$1.52 billion in the prior year.
Adjusted cash profit after tax improved to US$805 million from a loss of US$863 million in the prior year, equating to a return on equity of 10.3 per cent. The company reported an underwriting profit of US$1.14 billion compared with a loss of US$869 million in the prior year, and an insurance profit of US$1.22 billion (US$727 million in 2020).
Gross written premium increased 22 per cent to US$18.5 billion as a result of premium rate increases, improved retention, and strong new business growth. Net earned premium was US$13.4 billion, up 10 per cent from 2020.
QBE Independent Chair Mike Wilkins said he is pleased with QBE’s statutory profit and the significant level of growth in each of the Group’s divisions.
“This growth and operating performance were achieved while also maintaining our strong capital position. Delivery against strategic priorities and an unrelenting focus on the fundamentals of the business were critical to this improved performance,” Wilkins said.
The Australia Pacific business reported a 17 per cent increase (US$5.22 billion) in gross written premium, reflecting “healthy premium rate increases” of 8.3 per cent across the majority of portfolios (5.4 per cent in 2020), coupled with improved retention (87 per cent, up from 86 per cent in 2020) and new business that increased 32 per cent relative to the prior year. Growth in commercial lines, home, motor, and LMI was partly offset by moderation in CTP and the impact of the economic slowdown in the Pacific Islands. Net earned premium was US$4.27 billion, up eight per cent from 2020.
Andrew Horton, Group Chief Executive Officer, said Australia Pacific delivered a strong performance in 2021.
“The business maintained its focus on supporting customers, partners and people through the evolving and challenging COVID-19 backdrop while continuing to progress digital capability, develop go-to-market propositions, and maintain ‘Brilliant Basics’ operating disciplines. This helped to deliver a material improvement in customer retention and new business volumes which, together with the recovering economy and sustained strong rating environment, supported encouraging business momentum.”
Looking ahead, Horton said the 2022 economic outlook remains encouraging, although QBE remains conscious of the risks associated with inflationary pressures, ongoing disruption to global supply chains, and the withdrawal of emergency stimulus measures in many key economies.
“Following another year of elevated natural catastrophe claims costs, building inflationary signals, and continued low interest rates, the premium pricing environment is expected to remain supportive in 2022. With such a degree of uncertainty in the outlook for the global economy, the industry should remain pragmatic about both building financial resilience and improving returns,” Horton said.
Wilkins is also optimistic about the future. “While some uncertainty surrounds the global economic outlook for 2022, we start the year expecting supportive trading conditions across the major markets in which we operate. Noting the strong momentum across the Group, we remain confident of further growth and margin improvement in 2022,” Wilkins said.