Press Releases
QBE Announces Record 2007 Result
QBE Group today announced that operating profit after tax for the year ended 31 December 2007 was up 30% to a record $1,925 million. Other key highlights for the year were as follows:
- Gross written premium up 20% to $12,406 million;
- Net earned premium up 25% to $10,210 million;
- Insurance profit up 27% to $2,262 million;
- Investment income, net of borrowing costs and investment expenses, up 38% to $1,132 million;
- Cash flow from operations up 16% to $2,374 million;
- Diluted earnings per share up 25% to 217.3 cents;
- Combined operating ratio (i.e. ratio of claims, commission and expenses to net earned premium) of 85.9%, compared with 85.3%;
- Insurance profit to net earned premium of 22.2%, compared with 21.9%; and
- Return on average shareholders’ funds of 26.1%, unchanged from last year.
In view of the excellent results and QBE’s strong capital adequacy, the Directors announced an increase of 18% in the final dividend to 65 cents. Due to the higher proportion of overseas profits, the dividend franking has been reduced from 60% to 50%. The total dividend payout for the year was up 38% to $1,069 million. Books close for the 2007 final dividend on 6 March 2008. The dividend will be paid on 26 March 2008. The Dividend Election Plan remains in place for the final dividend.
QBE Group Chief Executive Officer, Mr Frank O’Halloran, said “Our excellent underwriting, investment and operating results were ahead of our targets. This was despite the substantial appreciation of the Australian dollar, lower overall average premium rates, claims from twenty one insured natural catastrophes around the world compared with five last year and volatile investment markets. The substantial majority of the 45 countries in which we operate produced strong profits. The two US acquisitions completed in 2007 are on track to meet expectations in terms of underwriting profitability and we now expect to realise synergies of $100 million after tax compared with our preliminary estimates of $50 million after tax.”
Mr O’Halloran added “The further appreciation of the Australian dollar against the US dollar and sterling has had an adverse impact on our previously anticipated growth for 2008. Excluding any new acquisitions, we now expect net earned premium to grow by close to 10% and our insurance profit to be around 19% - 20% of net earned premium. These targets are subject to the usual caveats, particularly foreign exchange rates, equity markets, interest rates and large individual risk and catastrophe claims not exceeding the substantial allowance in our targets. We continue to investigate a number of acquisition opportunities for growth in 2008 and beyond.”
For further information, please refer to our 2007 annual report or phone +61 2 9375 4636 or email investor.relations@qbe.com.
26 February 2008