QBE First Half Profits Jump 19 Per Cent

Post by NeilMc on August 20, 2009 · Under Business News, Capital Markets, Company News, Equities, insurance · Comment

Australian insurance major and the country’s largest general insurer posted a 19 per cent jump in net profit for the half year ending June 30th. Profits rose to $1.02 billion from $859 million in the same time period of the previous year, which was just above market expectations.

Shares in the insurer rallied by as much as 8.3 per cent immediately after the announcement compared with a slight rise in the broader ASX 200 index.

GBE generates almost 80 per cent of its revenues internationally in more than 40 countries.

Net earned premium, a key measure of revenue for insurance companies, rose by 21 per cent to $6.19 billion from $5.11biliionn helped by a weaker Australian dollar. The recent rally in the value of the dollar though, meant that the insurance major cut its expectation of full year gross written premiums from $16.2 billion to $12.5 billion at year end.

The volatility in the foreign exchange markets resulted in a gain in currency positions of $282 million, up from $8 million in the previous year.

QBE said the strong results were achieved despite weak economic conditions and volatility in financial markets.

“The strong underwriting profits from our four insurance divisions, together with overall average premium rate increases of around 4 per cent and the expectation of higher interest rates as economic conditions improve, give us confidence about the outlook for the insurance profit margin going forward. Higher interest rates on our $24 billion of high quality, short duration cash and fixed interest investments will also benefit our capital adequacy. This, and our low debt levels and strong capital position, provide considerable flexibility to convert further bolt-on acquisitions.” QBE chief executive Frank O’Halloran said.

The group has completed around 120 acquisitions in the past 25 years

Compare Health Insurance Deals