Insurer QBE has elected not to declare a final dividend, recording a statutory net loss after tax of $US1.5 billion ($A1.93 billion) following last year’s $US550 million profit.
The company put the somewhat expected result down to Australia’s Black Summer bushfires, significant hail and storm claims, US wildfires and a record number of Atlantic hurricanes as well as business interuption claims triggered by COVID-19.
“The headline result includes a disappointing underwriting result, a significant reduction in investment income, impairment of goodwill and deferred taxassets in North America and charges related to rationalisation of legacy IT platforms and our real estate footprint,” it said in a statement.
The 135-year-old insurer’s adjusted net cash loss after tax was $US863 million, which compares with an adjusted net cash profit after tax of $US733 million for 2019.
Premium rates continued to harden. Group-wide premium renewal rate increases averaged 9.8 per cent compared with 6.3 per cent the previous year.
QBE’s combined operating ratio – the difference between premiums received and claims paid – was 104.2 per cent, compared with 97.5 per cent last year and reflected “COVID-19impacts, adverse prior accident year claims development and elevated catastrophe claims”.
A ratio of more than 100 per cent constitutes an underwriting loss.
“In light of the substantial 2020 statutory loss, the board has elected not to declare a final dividend,” the insurer said.
“Subject to global economic conditions not deteriorating materially, the board expects to resume dividend payments – of up to 65 per cent of adjusted cash profits – in conjunction with the 2021 interim result.”