Why is the QBE (ASX:QBE) share price outperforming IAG lately?

The insurance companies' stock has been trending in different directions lately.

The QBE Insurance Group Ltd (ASX: QBE) share price has performed relatively well over the last 6 months.

However, the insurance company's competitor, Insurance Australia Group Ltd (ASX: IAG), hasn't been so lucky.

The QBE share price is currently $11.98, 12% higher than it was 6 months ago. In the same timeframe, the value of IAG's stock has slid 7% to $4.71.

Additionally, over the last 30 days, the IAG share price has dropped 9% while QBE's has recorded a 2% dip.

So, what's caused the QBE share price to outperform IAG's? Let's take a look.

A little girl holds a colourful umbrella under a chalk rainbow drawn on the ground.

Image source: Getty Images

Federal Court findings

One event that has recently affected both QBE and IAG was a court case brought about by policyholders. The case was the second of a business interruption test case against numerous insurance providers.

The last 6 months have seen the second test case finalised. This time, the Federal Court ruled in favour of the insurance companies in 8 of 9 matters.

It was brought by business owners seeking legal action against insurance companies that didn't cover pandemic-related business interruptions.

What else has driven the QBE share price lately?

The other major news to drive the QBE share price in the last 6 months was the company's half-year results, released in August.

Within them, QBE reported its return to profitability. In fact, it boasted an underwritten result of US$642 million for the 6 months ended 30 June – up from a US$189 million loss.

After such a strong result, the company boosted its dividend from 4 cents to 11 cents.

The QBE share price gained 8.1% on the back of its results.

IAG's struggles

While IAG also reported increased profits in August from its financial year 2021 results, the company's stock tumbled.

The IAG share price fell 2.6% on the day it released its FY2021 earnings.

IAG's stock was also hit hard in October when the Australian Securities and Investments Commission (ASIC) announced it was taking IAG's subsidiary to Federal Court for failing to fully apply some customers' loyalty and 'no claim' discounts.

Finally, the company lowered its financial year 2022 guidance last week after storms caused damage across much of Australia in October.

Thus, IAG's share price has performed far worse than its ASX peer over the last 6 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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