The QBE share price is marching higher on Friday. Here's why

ASX 200 investors are bidding up the QBE share price on Friday. But why?

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The QBE Insurance Group Ltd (ASX: QBE) share price is marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) insurance company closed yesterday trading for $17.59. At the time of writing in the early morning trade on Friday, shares are changing hands for $17.78 apiece, up 1.1%.

For some context, the ASX 200 is 0.3% at this same time.

This comes following the release of QBE's performance update for the first quarter of 2024 (Q1 2024).

Here are the highlights.

What did the ASX 200 insurer report?

The QBE share price is marching higher after the company announced a 2% year on year increase in gross written premium for the three months in both a reported and constant currency terms.

Renewal rate increases of 7.3% were in line with the company's expectations. Management said this "reflected reduced rate increases across certain property and reinsurance lines compared to the prior corresponding period".

Excluding rate increases, premiums fell 2% in constant currency terms. This was due to lower Crop premium along with property portfolio exits in its North America and Australia operations.

The ASX 200 insurer said it expects organic growth to partially offset the impact of lower commodity prices in its Crop segment. QBE forecasts Crop gross written premium will be around $3.9 billion in FY 2024.

On the claims front, the company had a net cost of catastrophe claims of approximately $300 million in the four months to April. QBE's catastrophe allowance for 1H 2024 is $609 million.

Management noted that catastrophe costs were driven by a number of storm events, mostly in Australia and North America.

The QBE share price could also be getting some support with the ASX 200 insurer reporting that supportive interest rates and favourable returns in its risk asset portfolio delivered strong investment returns in Q1.

QBE's first quarter exit core fixed income running yield of 4.7% ticked up from the 4.6% FY 2023 exit running yield.

Total investment funds under management (FUM) of $30.3 billion was up $200 million from FY 2023. Management said risk assets now accounted for some 15% of the portfolio.

The company also noted that higher risk-free rates resulted in a $130 million unrealised loss on its core fixed income securities. Although this was broadly offset by the company's claims liability discount benefit. The final result was a neutral impact from QBE's asset-liability management activities for the quarter.

As for what's ahead for QBE shares, management reaffirmed full-year guidance of constant currency gross written premium growth in the mid-single digits. Premium rate increases are expected to remain supportive.

QBE's FY 2024 group combined operating ratio is forecast to be approximately 93.5%.

The company is scheduled to release its first half results on 9 August.

QBE share price snapshot

The QBE share price has been a strong performer in 2024, up about 22% year to date.

Motley Fool contributor Bernd Struben 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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