S&P/ASX 200 Index (ASX: XJO) stock QBE Insurance Group Ltd (ASX: QBE) is slipping in early trade today.
Shares in the $29 billion insurance company closed yesterday trading at $19.34. In morning trade on Wednesday, shares are changing hands for $19.24 apiece, down 0.4%.
For some context, the ASX 200 is up 0.4% at this same time.
However, this still sees QBE shares up a healthy 31% in 2024. The stock also trades on a partly franked 3.7% trailing dividend yield.
Today's dip comes on the heels of QBE's third quarter (Q3 2024) performance update.
Here's what we know.
(Note: share price quotes above are in Aussie dollars. All figures below are in US dollars.)
ASX 200 stock slips on Q3 update
Investors are mixed on the QBE share price after the ASX 200 stock reported year-on-year gross written premium (GWP) growth of 2% for the nine months to 30 September. That was on both a reported and constant currency basis.
Management attributed the continued growth to group-wide renewal premium rate increases of 5.9%. In the third quarter, however, renewal premium rate increases dipped to 4.9%.
The ASX 200 stock also noted the sizeable impact that North American storms have had on catastrophe claims.
According to the release:
Following an active hurricane season and a number of notable secondary perils over recent months, 2024 industry insured losses are expected to be significant, and track well in excess of $100B.
QBE expects a calmer second half for catastrophe experience, with its net cost of catastrophe claims in the four months to October coming in at around $425 million. The company's 2H 2024 catastrophe allowance is $671 million.
As for North American Crop, the company expects an FY 2024 Crop combined operating ratio of approximately 94%.
Management noted that, "Current indications suggest yields will not be as favourable as pre-harvest projections, but still strong enough to broadly offset the impact of lower commodity prices."
On a positive note, the ASX 200 stock cited "excellent results in both fixed income and risk asset portfolios" for the investment performance achieved in the third quarter.
Total investment funds under management (FUM) for 3Q 2024 was $33.4 billion, up from $30.5 billion at 1H 2024.
Now what?
Looking at what might impact the $29 billion ASX 200 stock in the months ahead, the insurer reiterated its full-year outlook.
Management anticipates constant currency GWP growth of around 3%. This includes the $600 million hit from exited portfolios, which is about $50 million more than previously expected.
QBE expects an FY 2024 combined operating ratio of around 93.5%. That figure assumes that catastrophe experience tracks in line with the company's 2H 2024 catastrophe allowance and that Crop is broadly in line with management's expectations.
