Summary
The fund managers believe that QBE Insurance Group Ltd has reached a significant turning point after years of headwinds, positioning the company for improved performance and growth. In their opinion, QBE's underwriting profits have shown consistent growth, with a 30% increase attributed to premium rate trends and disciplined management. They note that the North American business has turned profitable for the first time in years, reflecting a successful exit from underperforming lines and enhanced operational focus. The fund managers emphasize that QBE's investment portfolio is benefiting from rising bond yields, contributing to a more balanced earnings profile. They also express confidence in QBE's management under CEO Andrew Horton, who has implemented a strategy of simplification and capital discipline. Despite the positive outlook, they highlight that QBE continues to trade at a valuation discount compared to its peers, suggesting potential for further re-rating. Overall, the consensus is that QBE is well-positioned to deliver stronger margins, dividends, and return on equity in the coming years.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Source: Trading View
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Commentary From The Managers
First Sentier Investors
1 Aug 2025
$22.90
Summary
- First Sentier Investors acknowledges the effective leadership of CEO Andrew Horton in enhancing QBE's performance.
- QBE has transitioned from a challenging period (2010-2020) marked by poor acquisitions.
- There has been a systematic and patient improvement in QBE's earnings, particularly in North America.
- Return on Equity (ROE) has improved significantly, rising from 6%-9% to 15%-18%.
- First Sentier Investors sees continued potential for growth in QBE's stock moving forward.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Commentary From The Managers
First Sentier Investors
1 Aug 2025
$22.90
Summary
- First Sentier Investors acknowledges the effective leadership of CEO Andrew Horton in enhancing QBE's performance.
- QBE has transitioned from a challenging period (2010-2020) marked by poor acquisitions.
- There has been a systematic and patient improvement in QBE's earnings, particularly in North America.
- Return on Equity (ROE) has improved significantly, rising from 6%-9% to 15%-18%.
- First Sentier Investors sees continued potential for growth in QBE's stock moving forward.
Montgomery Investment Management
21 May 2025
$22.80
Summary
- Montgomery Investment Management continues to hold QBE due to its long-term potential and recent transformation under current management.
- The company has focused on profitability, discipline, and simplification, leading to significant internal improvements.
- Recent changes include more disciplined underwriting and portfolio simplification, which are gaining market recognition.
- The environment of rising insurance premiums and higher bond yields supports QBE’s strengths and earnings momentum.
- A strategic exit from non-core and underperforming business lines has redirected capital towards competitive markets.
- QBE’s combined operating ratio (COR) has improved due to disciplined underwriting and reduced exposure to losses.
- U.S. short-term bond yields have elevated investment income from QBE's A$30 billion portfolio.
- QBE’s profitability is now more balanced and resilient, supported by both underwriting and investment returns.
- Capital management has improved, with an increase in dividend payout ratio reflecting confidence in earnings quality.
- Despite progress, QBE trades at a valuation discount compared to peers, suggesting potential for growth.
- The market has yet to fully recognize the structural improvements in underwriting quality and investment income.
- With a clear strategy and favorable conditions, Montgomery Investment Management sees potential for further earnings growth and a multiple re-rating.
Maple-Brown Abbott
31 Mar 2025
$21.90
Summary
- Maple-Brown Abbott continues to hold QBE Insurance Group due to its positive performance.
- The company's earnings were ahead of market expectations, demonstrating strong financial health.
- There is a relatively upbeat outlook for premium growth, indicating potential for future profitability.
- Overall, the holding in QBE Insurance Group contributed positively with a gain of 18%.
Yarra Capital Management
31 Dec 2024
$19.20
Summary
- QBE Insurance Group Ltd has outperformed following its third quarter trading update.
- The company reiterated guidance and demonstrated sound underlying trends.
- Yarra Capital Management continues to own the stock due to its transition to a simpler and lower risk business model.
- There is a belief that its strong underlying momentum is not fully reflected in the current valuation.
- Valuation reflects a 10.9-times P/E for FY25 and a 4.8% dividend yield.
Cooper Investors
31 Dec 2024
$19.20
Summary
- Cooper Investors sold their investment in QBE Insurance (QBE) amid significant portfolio changes.
- QBE has been one of the portfolio's largest active weights in recent years.
- The original investment was based on a low-risk turnaround focused on improving performance in the long underperforming North American division.
- Management actions and improved industry conditions have significantly enhanced the business outlook.
- The market is now expecting a recovery to a low-90s combined operating ratio in the coming years.
- The stock price doubled since purchase two and a half years ago.
- The turnaround opportunity is now realized and no longer considered latent.
- Risk-Adjusted Latency appears less compelling, prompting the exit.
Wilson Asset Management
30 Nov 2024
$19.94
Summary
- QBE Insurance Group is identified as a global commercial insurer.
- The recent rally in global bond yields, following Trump's election win, has positively impacted QBE's implied investment income.
- This rally is attributed to expectations of sustained fiscal deficits, a proposed tariff regime, and potential inflation surprises.
- Investment income significantly drives QBE's earnings, contributing over 40% of the company's pre-tax profit.
- In their recent quarterly update, QBE confirmed it is on track to meet earnings guidance, with global catastrophe costs below their allowance.
- Wilson Asset Management remains positive about QBE's outlook, anticipating a reduction in the valuation discount and potential capital management activities, such as a buyback.
L1 Capital
30 June 2024
$17.06
Summary
- L1 Capital identified QBE Insurance as a leading contributor to their Catalyst Fund, showcasing their contrarian investment philosophy.
- Initial Investment Thesis: QBE was viewed as an undervalued business with improving operating conditions and strong catalysts for growth.
- Realized Catalysts: Key catalysts identified by L1 Capital have materialized, prompting the decision to exit the position.
- Stock Performance: Achieved a ~45% return during the holding period, significantly outperforming the ASX benchmark.
- Stronger Underwriting Profits: Improved operational performance led to underwriting profits exceeding market expectations, with premium increases of 9.7% in 2023.
- Higher Investment Income: QBE's investment earnings rose ~70% due to increased fixed income yields amid low interest rates.
- Improved Earnings Stability: FY23 earnings growth of 100% and consistent guidance for FY24, reflecting enhanced management performance.
- Leadership Impact: Appointment of Andrew Horton as CEO contributed to improved operational consistency and profitability.
- Strengthened Reserves: QBE's conservative reserving practices provided flexibility for consistent earnings growth, reducing volatility risks.
- Reduced Volatility Exposure: Management's initiatives to lower exposure to weather-related claims minimized potential negative surprises.
- U.S. Market Exit: QBE's decision to exit underperforming U.S. segments is seen as crucial for improving North American returns.
- Conclusion: While L1 Capital views QBE as a quality business, they exited the position to pursue alternative investment opportunities.
Cooper Investors
30 June 2024
$17.06
Summary
- Cooper Investors acknowledges QBE's decision to close its North American middle-market business as a favourable move.
- The closure addresses ongoing losses and dilutive effects on divisional and group margins.
- This exit is expected to enhance the group’s financial profile and lower property catastrophe exposure.
- It aims to eliminate distractions for management, simplifying operations.
- Achieving a 95% Combined Operating Ratio for the North American business is more attainable post-closure.
- QBE's guidance remains confirmed, although civil unrest impacts in New Caledonia may incur costs between $175-225mn.
- This news surprised some in the market, but it reflects QBE's risk assessment strategies.
- QBE demonstrated resilience by absorbing the civil unrest hit alongside other major events without significant disruption.
- The investment thesis remains underpinned by strong operating trends in the global insurance industry, showcasing minimal irrational market behaviour.
- Despite some challenges, QBE's North American turnaround is on track, based on insights gained from recent trips to the UK and US.
L1 Capital
31 Mar 2024
$18.04
Summary
- QBE shares rallied by 22% after reporting solid FY23 results, with earnings doubling year-over-year.
- Insurance profits met company guidance, indicating significant progress in achieving stronger and more consistent earnings.
- L1 Capital sees QBE as well positioned to exceed expectations going forward.
- Current consensus estimates reflect minimal improvement in insurance margins, despite positive industry trends.
- QBE has increased its weather claims budget and divested higher-risk portfolios, providing protection against future claims volatility.
- After a challenging 15 years, QBE is believed to have reached a turning point toward stronger margins, dividends, and return on equity.
- Shares have rallied over 100% since early 2021, yet trade at only 10x FY24 consensus P/E, below the pre-COVID average of approximately 13x.
Airlie Funds Management
30 Sept 2023
$15.55
Summary
- QBE is a holding in the portfolio.
- Airlie Funds Management met with competitors in the North American market: Chubb, The Hartford, Arch Capital, and Travelers.
- QBE is working on improving profitability in their North American division by exiting underperforming lines of business.
- The focus is on returning the “middle market” franchise to profitability.
- Competitors view their middle market business as a “crown jewel” with attractive economics and a fragmented competitive landscape.
- Questions remain about QBE's ability to build a quality middle market business.
- Competitors praised QBE’s new CEO Andrew Horton and his previous success at Beazley.
- Concerns exist regarding QBE’s scale and broker relationships in the middle market segment.
- Airlie Funds Management plans to address these concerns directly with QBE management.
- The commercial insurance environment is favorable with strong premium growth and improved investment portfolio yields.
- Airlie Funds Management continues to see QBE as a core holding in this positive backdrop.
L1 Capital
31 Mar 2023
$14.59
Summary
- QBE shares rose by 9% after reporting strong FY22 results, exceeding consensus estimates for cash NPAT by 15-20%.
- The results indicate significant progress in delivering stronger and more consistent earnings.
- QBE is improving the performance of its historically struggling North American business.
- The company has strengthened its reserving, positioning itself to achieve consistent earnings growth in the coming years.
- Despite past caution regarding QBE due to industry-specific issues, L1 Capital believes the company has reached a turning point after 15 years of challenges.
- L1 Capital anticipates stronger margins, dividends, and return on equity going forward.
- The market has not yet fully recognized this inflection point, with QBE trading at only 10x FY23 consensus P/E, compared to a pre-COVID average of ~13x.
Cooper Investors
31 Mar 2023
$14.59
Summary
- QBE delivered progress on a low-risk turnaround thesis.
- Improved returns in North America, profitable for the first time in FY22 in four years.
- Focus on deliberate portfolio optimisation to achieve higher and more consistent sustainable returns.
- Operating trends supported by pricing above claims inflation and rising investment yields.
- More rational industry behaviour as capital withdraws from the industry.
- Management demonstrates intentional focus on long-term value creation, even with short-term sacrifices.
- Example of sacrifices includes conservative reinsurance and quota share deals.
L1 Capital
28 Feb 2023
$15.08
Summary
- QBE shares have increased by over 10% following the release of robust FY22 results.
- The cash NPAT reported was 15-20% ahead of consensus estimates.
- This result reflects significant progress in delivering stronger and more consistent earnings.
- Improvements in the North American business are notable, which has historically struggled.
- The company has considerably strengthened its reserving, positioning it well for consistent earnings growth.
- After years of caution, L1 Capital believes QBE has reached a turning point for better margins, dividends, and return on equity.
- The market has yet to fully value this change, with QBE trading at only 10x FY23 consensus P/E, compared to a pre-COVID average of around 13x.
L1 Capital
31 Dec 2022
$13.08
Summary
- QBE shares rose by +16% during the quarter due to buoyant premium volumes and rates, alongside investment yields tracking ahead of market expectations.
- Improved performance in North American business, historically a struggle for the company.
- Considerable strengthening of reserving, positioning QBE for consistent earnings growth over the next few years.
- Long-standing caution on QBE has been evident due to industry and company-specific issues.
- Belief in a turning point for QBE after 15 years of headwinds, anticipating stronger margins, dividends, and return on equity.
- Market expectations may not yet reflect this inflection point, with QBE trading at ~8.4x FY23 consensus P/E compared to a 10-year pre-COVID average of ~13x.
L1 Capital
31 Aug 2022
$12.07
Summary
- QBE (Long +5%) shares rose in August after robust H1 results with underwriting profit 15% ahead of consensus.
- Significant growth illustrated by GWP, with a 21% increase in 2021 and 18% increase in H1 2022 (constant currency).
- Improvement in North American business, showing better operating trends and reserving, reducing chances of future issues.
- Beneficiary of rising interest rates, with ~$27b investment book expected to generate an additional ~$240m earnings.
- After 15 years of headwinds, QBE is at a turning point, poised for stronger margins, dividends, and return on equity.
- Market expectations not yet factored, with QBE trading at ~8.5x FY23 consensus P/E compared to ~13x pre-COVID average.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who has invested in QBE Insurance Group Ltd (ASX:QBE)?
Fund managers including L1 Capital, Cooper Investors, Maple-Brown Abbott, Yarra Capital Management, Airlie Funds Management, Wilson Asset Management, Montgomery Investment Management and First Sentier Investors have invested in QBE Insurance Group Ltd (ASX:QBE).
Why have investment managers invested in QBE Insurance Group Ltd (ASX:QBE)?
Fund managers are investing in QBE Insurance Group Ltd due to a significant turnaround in the company's performance, particularly in its North American division, which has historically struggled. Key factors driving this investment include:
1. **Strong Financial Performance**: QBE has consistently reported earnings that exceed market expectations, with substantial growth in underwriting profits and cash earnings. The company's recent results demonstrate a doubling of earnings and a solid outlook for continued growth.
2. **Positive Market Conditions**: The company is benefiting from rising insurance premiums and higher investment yields, which enhance its profitability. Fund managers note that QBE's investment portfolio is set to deliver increased earnings due to favorable bond yields.
3. **Strategic Business Transformation**: Under the leadership of CEO Andrew Horton, QBE has focused on simplifying its operations and exiting underperforming business lines, which has improved its combined operating ratio and overall financial health.
4. **Improved Risk Management**: QBE has strengthened its reserving practices and reduced exposure to volatile segments, enhancing its stability and resilience against market fluctuations.
5. **Valuation Opportunity**: Despite its strong performance, QBE continues to trade at a valuation discount compared to its peers, suggesting potential for further stock price appreciation as the market recognizes its improved fundamentals.
Overall, fund managers view QBE as well-positioned for future growth, with a robust strategy that aligns with positive industry trends.
What happened to QBE Insurance Group Ltd (ASX:QBE)?
In August 2025, First Sentier Investors expressed strong confidence in QBE Insurance Group Ltd, with the share price around $22.90. Fund managers praised CEO Andrew Horton for his patient approach in enhancing returns after a challenging decade marked by poor acquisitions. They highlighted a significant improvement in North American earnings, noting a rise in return on equity (ROE) from 6-9% to 15-18%. This systematic and measured progress positions QBE as a preferred investment with further growth potential.