QBE UPDATE ON 2017 PERFORMANCE QBE will report its 2017 interim...

QBE UPDATE ON 2017 PERFORMANCE

QBE will report its 2017 interim result on 17 August as previously advised. While the Group’s three large operating divisions are currently on track to report results in line with budget, Emerging Markets has experienced significantly higher than expected claims activity during the first five months of the year which is expected to cause that division to report a first half combined operating ratio of around 110%.

The heightened claims activity in Emerging Markets is due to a combination of increased frequency of medium sized risk claims in Asia, weather related claims in Latin America and adverse experience in legacy portfolios in Latin America. This is likely to add around 1% to the Group’s interim and FY17 combined operating ratio resulting in an expected interim and FY17 combined operating ratio of 94.5%-96.0%.

Premium income is consistent with previously advised targets and in line with expectations. The interim investment return is currently above expectations thereby increasing the likelihood that the FY17 investment return will be at the top end of the Group’s previously advised 2.5%- 3.0% target range.

Reflecting the above, the interim insurance profit margin is expected to be 8.5%-9.5%.

QBE’s Group Chief Executive Officer, Mr John Neal, said: “We are encouraged by the improvement in the combined operating ratio in Australia & New Zealand as well as North America while Europe continues to perform well. Nonetheless, heightened claims activity in our Emerging Markets division will increase the Group’s interim and FY17 combined operating ratio by around 1%.”