QBE Insurance Group Ltd (QBE)

Hi Sandeep,

We have already discussed the CTD debacle in detail earlier in today’s report so we will focus on QBE here. We’ve held QBE in the Hitlist of our Active Growth Portfolio over recent months but have refrained from pushing the “Buy Button” as the perception that the Fed will cut interest rates aggressively into/through 2026 weighed on the stock:

Insurers earn a big part of their profit from investing premiums in bonds and fixed-income assets hence with US interest rates set to fall 3-4 times into next Christmas it’s not surprising the stocks drifted lower in FY26 but ~23% is starting to feel overcooked on the downside. On 9.9x earnings, QBE is trading ~10% below its historical average plus it remains well below local peers, making it increasingly compelling in our view.

Our preferred scenarios re the RBA will not hike next year and the Fed will cut only 2-3 times which we feel net/net favours QBE here. The stock’s 5.3% part-franked dividend yield is also attractive for patient investors who share our view that QBE has entered an “accumulate” zone.

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QBE Insurance Group LTD (QBE)

LAST UPDATED 04/12/2025 14:19

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QBE Insurance Group LTD (QBE)

LAST UPDATED 04/12/2025 14:19