Highlights

  • Jefferies assigned a Buy rating on QBE with a target of AUD 24.55.
  • Macquarie Research issued an Outperform rating with a target of AUD 23.90.
  • The company reiterated FY25 guidance with expected mid-single-digit premium growth and a combined operating ratio of ~92.5%, alongside a AUD 450 million share buyback.

QBE Insurance Group (ASX:QBE) received a pair of positive analyst ratings this week. Jefferies has assigned a Buy rating with a target price of AUD 24.55, while Macquarie Research issued an Outperform rating, setting a target of AUD 23.90. The announcements coincide with QBE’s update on recent trading conditions and reiteration of its FY25 outlook, alongside the launch of a substantial on-market share buyback program.

Premium Growth Maintains Momentum

QBE reported gross written premium growth of 6% for the nine months ending 30 September, on both a reported and constant currency basis. Excluding the $250 million impact of non-core run-offs in North America, premium growth rises to 7%, or 6% when also excluding Crop. The company’s group premium rate increases averaged approximately 1.5% over the period, slightly below first-half results, largely due to commercial property lines. Excluding commercial property and Lloyd’s segments, rate increases remain consistent with earlier trends at around 4%. QBE continues to highlight targeted premium growth as a key driver for its high-teens return on equity forecast for FY25.

Underwriting Performance Remains Resilient

The insurer anticipates claims to track broadly in line with its plan for FY25, with catastrophe costs in the first ten months coming in below allowance at approximately $700 million, compared to the $950 million planned. The remaining allowance for November and December is set at $200 million. This marks the third consecutive year of catastrophe claims remaining below allowance. Prior-year releases from short-tail lines such as property and Crop, as well as CTP and LMI in the Australia Pacific region, are expected to modestly enhance results. Ex-catastrophe claims are anticipated to be slightly higher than plan due to industry-wide activity in North American Accident and Health lines, with normalization expected in the year ahead.

Investment Portfolio Shows Positive Returns

QBE’s investment portfolio demonstrated favorable returns in 3Q25, supported by both fixed income and risk asset performance. Core fixed income yields remained steady at 3.7%, while risk assets benefited from strong equity and enhanced fixed income returns. Total funds under management increased to AUD 34.8 billion from AUD 34.0 billion in 1H25, with risk assets comprising 15% of the portfolio. Asset-liability management activities had a neutral impact on third-quarter results.

Outlook for FY25 and FY26

The company reaffirmed its full-year FY25 outlook, expecting mid-single-digit constant currency gross written premium growth, a Group combined operating ratio of approximately 92.5%, and continued high-teens return on equity. Planning for FY26 is advanced, with a focus on portfolio balance, premium growth, and maintaining stable underwriting performance. The company aims to sustain its combined operating ratio near 92.5% and anticipates further constructive growth as earnings visibility improves. QBE also announced an on-market buyback of AUD 450 million in ordinary shares, set to occur over the coming year.