The QBE Insurance Group Ltd (ASX: QBE) share price is having another strong session.
In morning trade, the insurance giant's shares are up 3% to $15.77.
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Why is the QBE share price charging higher?
The catalyst for the rise in the QBE share price has been the release of a first-half update.
According to the release, recent momentum has continued, with the company delivering constant currency gross written premium growth of ~13% during the half. This has been underpinned largely by group-wide premium rate increases, which are expected to be ~10% in both the first half and second quarter.
In light of this, the first half gross written premium and net insurance revenue are expected to be ~US$12.8 billion and ~US$7.9 billion, respectively.
Another positive is that QBE's investment performance has been strong. This is expected to result in first-half investment income of ~US$660 million, which includes a ~US$50 million benefit from changes in credit spreads.
Management advised that higher interest rates have supported core fixed income returns, with the first half exit running yield improving to ~4.9%.
Offsetting some of this good news is that a series of North American convective storms through the second half of June has resulted in additional pressure on catastrophe costs beyond those previously outlined. QBE currently expects first-half net catastrophe costs of ~US$700 million.
Outlook
The release reveals that, based on its preliminary view of the first-half result, QBE continues to expect to achieve its prior FY 2023 guidance.
This is for constant currency gross written premium growth of ~10% in FY 2023 and a combined operating ratio of ~94.5%. However, the latter now includes a revised FY 2023 catastrophe budget of ~US$1,330 million, which is up from US$1,175 million previously.
The QBE share price is now up over 34% since this time last year.
