SYDNEY: Global insurer QBE Insurance Ltd, with few of the tumbling share investments that have hurt its peers, topped market forecasts for its calendar 2002 profit yesterday and tipped profit growth of above 50% for 2003.
QBE, recovering from a loss in the prior year when it was hit by a A$252mil exposure to the Sept 11 terror attacks on the United States, said its premium growth had outstripped expectations in 2002 and it was on track for further strong growth ahead.
The company registered a net profit of A$279mil for 2002 as a low exposure to equities protected it from weak financial markets, compared with a loss of A$25mil in 2001.
Its 2002 insurance profit, which strips out investment income, was A$406mil against a loss of A$119mil a year earlier.
Insurers around the world have been hit by a stock market slump that has eroded their capital and put pressure on their ability to meet policy-holders’ claims, leading them to slash dividends and seek extra capital.
But QBE’s exposure to listed equities was just 7.9% of total investments and cash last year, helping the group to achieve a margin on its insurance business of 7.2% compared with its own target of 6% to 6.5%. The combined ratio, a key indicator of profitability, improved to 97.7% from 109.6%. A level of 100 indicates break-even.
Gross written premiums, the money people pay for insurance cover, rose 14% to A$7.72bil and net earned premium rose 22% to A$5.64bil.
QBE declared a final dividend of 18.5 Australian cents per share to take the total for 2002 to 35 cents. – Reuters