QBE Insurance Group saw a significant uptick in profitability for the year ended Dec. 31, with gains coming from better underwriting outcomes and favourable investment performance.
The company recorded a statutory net profit after tax of $2.16 billion, up from $1.78 billion in the prior year. On an adjusted basis, net profit rose to $2.13 billion from $1.73 billion, producing an adjusted return on equity of 19.8%, compared with 18.2% in 2024.
Investors responded positively to the results. QBE's Sydney-listed shares climbed as much as 8.5% to A$21.76, marking the stock's strongest level since early September.
Gross written premiums increased by 7% to $23.96 billion. When excluding exited portfolios, the rate of premium growth was 8%, outperforming the group's guidance for mid-single-digit expansion. QBE also posted an improvement in its combined operating ratio, which moved to 91.9% from 93.1% the prior year, and thereby beat the company's target of around 92.5%. Management cited lower catastrophe claims as a factor aiding the improvement in the operating ratio.
On the investment front, total investment income held steady at $1.63 billion, delivering a return of 4.9%. The result was supported by strong performance in risk assets.
Reflecting the stronger earnings and cash generation, QBE declared a final dividend of 78 Australian cents per share. That brings the full-year dividend to 109 cents per share, a 25% increase from the prior year.
Looking ahead, the insurer reiterated its 2026 outlook, maintaining expectations for a combined operating ratio of about 92.5% and mid-single-digit premium growth.
Contextual note - The information above is taken directly from the company’s reported financial results and guidance; the company singled out underwriting improvement and investment returns as the primary contributors to the year-on-year profit increase.