The RBA's 0.5% lift in interest rates adds to the wind in QBE's sails.
QBE's $28 investment portfolio is ~90% in interest bearing assets. While spread globally by currency, all CB's are raising rates. Using the 0.5% as a simple proxy, net interest income would rise $140m.
The emergency low interest rates of recent times have been agony for insurers. QBE has endured this, keeping maturities relatively short and earning a mere 1.52% on the interest bearing portfolio. Rebalancing maturities will be slow work, yet there are encouraging gains ahead.
Looking forward to the 1H release in mid-August. I would hope to see continued premium gains, though at a lesser rate, and at last, some interest income.
The lack of commentary here from other HC contributors suggests limited attention to insurers. Y'all will come to regret this.
Ash
QBE Price at posting:
$12.35 Sentiment: Buy Disclosure: Held
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