QBE reported the best claims ratio, and the best combined operating ratio, seen for a number of years. This is very pleasing.
We’ve been long QBE given our expectations of an improving premium cycle, and the normalisation of loss ratios, both of which would lead to an improved share price outcome.
The premium cycle has now likely peaked, but continues to lift QBE’s revenues, and will likely continue to remain strong in absolute terms, as the industry needs to uplift profitability, via continued repricing of premiums, to reflect the higher incidence of natural catastrophes due to climate change.
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