QBE Insurance shares fell 5.5 per cent on Friday following the release of first-half FY26 results. Return on equity came in at 17.7 per cent, well above the company's stated target.
The insurer has been guiding to a combined operating ratio of around 92.5 per cent for FY26. That is expected to be supported by constant currency gross written premium growth in the mid single digits.
QBE issued a notice of redemption for approximately A$500 million of Tier 2 notes on 25 August 2026. The redemption would reduce the debt-to-total-capital ratio to a pro-forma 22.4 per cent and lower the APRA prescribed capital amount multiple by around 4 percentage points.
Following payment of the interim dividend, the pro-forma PCA multiple stood at 1.78 times. That sits near the middle of the company's 1.6 to 1.8 times target range.
The presentation focused on growing the book while carrying less catastrophe exposure. Net insurance revenue excluding crop and lenders mortgage insurance rose 18 per cent from FY23 to FY26 estimates, while catastrophe risk measured by probable maximum loss declined 11 per cent over the same period.
QBE Re was identified as a key growth engine, targeting $6 billion in gross written premium by 2030. The reinsurance platform has delivered a three-year average combined ratio below 90 per cent and return on allocated capital above 15 per cent.
Business mix within QBE Re has shifted materially. Proportional business now accounts for 70 per cent of the book on FY26 estimates, up from 51 per cent in FY21, while property has fallen to 27 per cent from 40 per cent.
QBE Portfolio Solutions, the broker facilities platform, has expanded from 2 facilities in 2021 to more than 20 in 2026. The share price response reflected a broader pattern across the week, in which results meeting or exceeding expectations were still met with selling.
