QBE Insurance Group Ltd (QBEIF) Full Year 2025 Earnings Call Highlights: Record Profits and …

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Fri, February 20, 2026 at 2:04 PM GMT+9 4 min read

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QBEIF

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**Return on Equity (ROE):** Just shy of 20%.

**Gross Written Premium (GWP) Growth:** 7%, ahead of mid-single-digit guidance.

**Combined Ratio:** 91.9%, better than the 92.5% guidance.

**Investment Return:** 4.9%, contributing to a record year of income.

**Post-Tax Profit:** USD 2.1 billion, up around 25% for the year.

**Earnings Per Share (EPS):** Increased by approximately 25%.

**Capital Position:** Improved to 1.7x, comfortably above targets.

**Final Dividend:** $0.78, taking the full-year dividend to $1.09, a 50% payout.

**Catastrophe Costs:** $400 million below budget.

**Reserve Development:** Favorable, with a modest central estimate release of $40 million.

**Expense Ratio:** 12.4%, with an investment envelope of around $300 million.

**North America Crop Business:** Combined ratio of 88%, strongest performance in 7 years.

**Investment Income:** Around $1.6 billion.

**Tax Rate:** 24%, slightly better than the expected 25%.

**Debt to Capital:** Increased by around 4 points to 24%.

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Release Date: February 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

QBE Insurance Group Ltd (QBEIF) reported a strong return on equity (ROE) of nearly 20%, indicating robust financial performance.

Gross written premium (GWP) growth was 7%, exceeding the company's mid-single-digit guidance, with underlying growth close to 8% excluding exits.

The combined ratio improved to 91.9%, better than the previous year's and ahead of the outlook of 92.5%, driven by prudent reserving and portfolio optimization.

Investment income reached a record $1.63 billion, representing a return of 4.9%, with risk assets returning almost 10%.

The company announced a final dividend of $0.78, bringing the full-year dividend to $1.09, with a payout ratio of 50%, demonstrating strong shareholder returns.

Negative Points

The U.S. Specialty business faced challenges, with a combined operating ratio over 100% due to claims activity in Accident & Health (A&H) and Aviation.

The Accident & Health segment experienced increased claim severity due to rising treatment costs and demand for new drugs, necessitating a rate increase of over 20%.

The company noted that inflation is expected to outpace rate increases, which could pressure margins if not managed effectively.

The North American division's core business, excluding crop, faced challenges, with a combined ratio close to 100%, indicating areas needing improvement.

The company is exiting its global trade credit and surety business, which, while performing well, is leveraged to macroeconomic settings, indicating a strategic shift.

 






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Q & A Highlights

Q: Can you clarify how QBE approaches the payout of the first half dividend? A: Andrew Horton, CEO, explained that QBE follows a 1/3, 2/3 payout approach rather than paying 50% of the first half profit. This method helps manage volatility by basing the payout on the forecasted end-of-year results rather than the mid-year figures.

Q: Is there any expected benefit to the FY26 combined ratio from the roll-off of the North American non-core portfolios? A: Andrew Horton, CEO, stated that there is no expected benefit or negativity from the roll-off of the North American book. It is now considered an all-inclusive number and is relatively small, allowing it to be absorbed within the North American numbers.

Q: Can you provide details on the casualty sidecar and its financial impact? A: Christopher Killourhy, CFO, mentioned that the sidecar is valued at approximately $450 million. The ratio of premium to capital is roughly 1 to 3, with potential capital benefits expected in the out years as reserves build up.

Q: How do facilities contribute to efficiency, especially in the context of Lloyd’s market costs? A: Andrew Horton, CEO, highlighted that facilities are efficient for brokers and clients, reducing costs for both. QBE writes about $1.5 billion of premium with a small team, keeping costs low. Facilities benefit all parties involved, including the buyer, intermediary, and QBE.

Q: What is the outlook for the North American combined ratio, excluding crop and non-core areas? A: Andrew Horton, CEO, noted that the North American commercial business performed well, while specialty areas like Accident & Health and aviation faced challenges. The overall combined ratio, excluding crop, is close to 100%, but improvements are expected in 2026.

Q: Can you elaborate on the expected reinsurance savings and their impact on the combined ratio? A: Christopher Killourhy, CFO, stated that reinsurance savings are expected to be in the mid-teens percentage range. The reduction in attachment points and the placement of a catastrophe bond have helped lower the overall cost of the program.

Q: How does QBE view reserve releases and their impact on ROE guidance? A: Andrew Horton, CEO, explained that while reserve releases are not explicitly factored into guidance, the prudent reserving strategy is expected to lead to some releases over time, contributing positively to ROE.

Q: Is there potential to reduce the catastrophe loading further in the future? A: Andrew Horton, CEO, indicated that while QBE is not actively seeking to lower the catastrophe loading, the focus remains on maintaining a balanced portfolio and ensuring adequate reinsurance coverage to manage volatility.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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