First Impression: QBE Insurance- QBE- Interim result

PCA multiple 1.69x (BP 1.73x); ROE 5.6% (BP 6.5%); and ROTE 8.5% (BP 9.9%) | Reported insurance margin 5.8% (BP 7.8%) | COR 99.0% comprising loss ratio 64.8%, expense ratio 34.2% (BP 95.4% comprising loss ratio 61.9%, expense ratio 33.5%) | This was a disappointing miss to our numbers with higher claims arising from $283m adverse risk-free rate movements (vs. $45m benefit pcp). This largely explains the variance to our forecast, and excluding this would have resulted in a much better 94% COR, all else largely in line. As a global insurer, QBE continues to face pricing pressures and adverse FX movements and 2016 guidance has been rebased slightly: GWP US$13.7-14.1bn (was US$14.2-14.6bn); NEP US$11.5-11.9bn (was US$11.6-12.0bn, immaterial change); COR 94-95% (unchanged); and Insurance profit margin 8.5-10% (unchanged).