QBE shares fall on weaker returns, claims trends

Shares in QBE Insurance Group fell 2.1% in early trade on Tuesday after the insurer reported weaker investment returns and adverse claims trends that tempered profit growth.

The Australian insurer, which had reported a 5% rise in first-half net profit before tax to $1.2 billion, said claims costs had risen amid higher-than-expected natural catastrophe losses and inflation-driven repair expenses. Investment income also declined, reflecting lower returns from fixed-income securities amid rising global interest rates.

QBE maintained its full-year guidance but warned that claims trends remained volatile, particularly in its North American operations. The company’s underwriting margin narrowed to 12.4% from 13.1% a year earlier, as higher claims outpaced premium growth.

Analysts at Macquarie said the results were in line with expectations but highlighted the pressure from claims inflation and investment volatility. "The core underwriting performance remains robust, but the external environment is challenging," one analyst noted.

QBE’s shares, which had gained 1.8% year-to-date before Tuesday’s drop, were trading at A$14.95, down from A$15.25 at Monday’s close.