General financial services corporation QBE Insurance Group [ASX:QBE] saw its share price rising 8.5% on Friday, its shares worth $14.54 at the time of writing.
The surging share performance comes off the back of a positive report from the group. QBE broadcasted the $770 million gained in net profit and forecasted higher gross written premium growth for the 2023 financial year.
QBE also declared a final dividend of 30 cents, up from the previous declaration of 19 cents.
QBE’s stock has been trending strongly in all metrics, having been boosted by 15% in the last full year, more than 8% so far in 2023 and 10% in the last week alone.
Even in its sector, it is doing well by rising above the industry 12-month average by more than 17%.
QBE’s annual report speaks growth and profit
Reporting from Sydney this morning QBE provided a positive report. The company declared a 3% rise in net profit to a total of $770 million for the full financial year of 2022.
Revenue increased by 15% from US$20.7 million in 2021 to US$23.8 million in the latest fiscal year. Risk-free rates increased across all major currencies throughout the year as central banks made aggressive decisions to combat inflation.
Many of these actions positively affected QBE’s business, as they benefitted QBE’s underwriting results, which were already offset by a $1,343 million adverse mark-to-market impact on its fixed income portfolio.
QBE stated its gross written premiums came to US$20,000 in FY2022, up from US$18,457 reported in FY2021. The company experienced gross written premium growth of 13%, with its adjusted combined operating ratio improving by 1.3 percentage points to the total ratio of 93.7%.
More good news followed when the group’s expense ratio decreased from 13.6% to 12.8%. QBE’s investment loss came to a total of $776 million, offset by positive returns of $122 million. The group was able to include these positive returns after balancing unrealised losses from its bond sell-off throughout 2022.
Mike Wilkins, QBE’s Chairman, stated:
‘We are living in extraordinary times. After the global pandemic, we are faced with heightened geopolitical tensions, global inflationary pressures, significant market volatility and supply chain challenges.
‘Against this backdrop, QBE has maintained its focus and its commitment to delivering improved profitability and growth. We are pleased with our statutory net profit after tax of $770 million and the growth across our divisions. Our capital position and balance sheet remain prudently positioned.’
To reinforce its confidence going forward, QBE’s board declared a final dividend of 30 cents, up from the previous declaration of 19 cents in 2021, both partially franked.
The company has now forecast an uptick in single-digit gross written premium growth for the current financial year and believes there will be a significant improvement in running exit yield from 2022 of 4.1%.
Australia’s next commodity boom is coming
Turning aside from the financial sector for a moment, we’d like to talk to you about the hot topic that is the Australian commodities market.
Like QBE forecasts, Australian commodities are set to pull some serious growth and higher profit moves that will see companies — and their investors — benefitting in a big way.
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James Cooper, trained geologist turned commodities expert, is convinced ‘the gears are in motion for another multi-year boom in commodities’…and the best part is that Australia and its stocks are in a prime position to reap great benefits.
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