In the nine months leading up to September 30, QBE reported a global average premium rate increase of just 1.5%. This figure marks a decline from the growth observed in the first half of the fiscal year, with the deceleration largely due to slower growth in business property insurance prices. Despite this, the company's gross written premiums rose by 6% to $18.6 billion, maintaining consistency with first-half growth rates. However, the data indicates reduced momentum in the third quarter.
In an effort to bolster investor confidence, QBE announced a substantial A$450 million share buyback program set to commence next month. Despite this initiative, the market reacted negatively, with shares falling by as much as 5.9% to A$18.62, positioning QBE among the worst performers on the ASX 200 index, which saw a 0.4% rise during the same period.
Industry experts suggest that the market's response reflects concerns over the significant slowdown in premium rate increases. Greg Smith, an investment specialist at Generate KiwiSaver Scheme, noted that insurers had become accustomed to strong premium increases in recent years, and the current slowdown appears to be impacting investor sentiment.
Looking ahead, QBE has maintained its forecast, expecting a combined operating ratio of around 92.5% for fiscal 2026. This metric, which measures underwriting profitability, indicates that the company anticipates sustained profitability despite the current challenges.
In a related development, competitor Suncorp also faced market pressures, with shares dropping over 3% after the company anticipated approximately A$350 million in costs from recent severe thunderstorms in Queensland and northern New South Wales. These events have resulted in over 10,000 claims, highlighting the ongoing impact of natural disasters on the insurance industry.
For policyholders, these developments underscore the importance of staying informed about market trends and understanding how such factors can influence insurance premiums and coverage options. As insurers navigate these challenges, customers should remain proactive in reviewing their policies to ensure they continue to meet their needs effectively.
