ASX:QBE

Stock Analysis Report

QBE Insurance Group

Executive Summary

QBE Insurance Group Limited underwrites general insurance and reinsurance risks worldwide.

Rewards

Trading at 33.5% below its fair value

Earnings are forecast to grow 6.46% per year

Became profitable this year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Undervalued with acceptable track record.


Similar Companies

Share Price & News

How has QBE Insurance Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: QBE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.6%

QBE

0.7%

AU Insurance

-0.07%

AU Market


1 Year Return

23.0%

QBE

16.0%

AU Insurance

19.1%

AU Market

Return vs Industry: QBE exceeded the Australian Insurance industry which returned 16% over the past year.

Return vs Market: QBE exceeded the Australian Market which returned 19.1% over the past year.


Shareholder returns

QBEIndustryMarket
7 Day4.6%0.7%-0.07%
30 Day-1.8%-1.8%-0.6%
90 Day1.3%-4.5%0.4%
1 Year28.3%23.0%22.5%16.0%25.0%19.1%
3 Year17.1%4.5%30.4%12.0%36.0%17.4%
5 Year50.2%23.7%55.0%19.9%63.2%26.5%

Price Volatility Vs. Market

How volatile is QBE Insurance Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is QBE Insurance Group undervalued compared to its fair value and its price relative to the market?

33.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QBE (A$12.64) is trading below our estimate of fair value (A$19)

Significantly Below Fair Value: QBE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: QBE is good value based on its PE Ratio (17x) compared to the Insurance industry average (20.2x).

PE vs Market: QBE is good value based on its PE Ratio (17x) compared to the Australian market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: QBE is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: QBE is good value based on its PB Ratio (1.4x) compared to the AU Insurance industry average (2.8x).


Next Steps

Future Growth

How is QBE Insurance Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

6.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QBE's forecast earnings growth (6.5% per year) is above the savings rate (1.1%).

Earnings vs Market: QBE's earnings (6.5% per year) are forecast to grow slower than the Australian market (9.3% per year).

High Growth Earnings: QBE's earnings are forecast to grow, but not significantly.

Revenue vs Market: QBE's revenue (1.3% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: QBE's revenue (1.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QBE's Return on Equity is forecast to be low in 3 years time (11.5%).


Next Steps

Past Performance

How has QBE Insurance Group performed over the past 5 years?

-16.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QBE has high quality earnings.

Growing Profit Margin: QBE became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: QBE has become profitable over the past 5 years, growing earnings by -16.7% per year.

Accelerating Growth: QBE has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: QBE has become profitable in the last year, making it difficult to compare its past year earnings growth to the Insurance industry (7.2%).


Return on Equity

High ROE: QBE's Return on Equity (8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is QBE Insurance Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: QBE has a low level of unsold assets or inventory.

Debt Coverage by Assets: QBE's debt is covered by short term assets (assets are 4.5x debt).


Financial Institutions Analysis

Asset Level: QBE's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if QBE has a sufficient allowance for bad loans.

Low Risk Liabilities: QBE reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if QBE has an acceptable proportion of non-loan assets held.

Low Risk Deposits: QBE has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if QBE has an appropriate level of bad loans.


Next Steps

Dividend

What is QBE Insurance Group's current dividend yield, its reliability and sustainability?

4.12%

Current Dividend Yield


Dividend Yield vs Market

company4.1%marketbottom25%2.4%markettop25%5.5%industryaverage4.3%forecastin3Years5.0%

Current dividend yield vs market & industry

Notable Dividend: QBE's dividend (4.12%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: QBE's dividend (4.12%) is low compared to the top 25% of dividend payers in the Australian market (5.55%).


Stability and Growth of Payments

Stable Dividend: QBE's dividend payments have been volatile in the past 10 years.

Growing Dividend: QBE's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72%), QBE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: QBE's dividends in 3 years are forecast to be covered by earnings (63.8% payout ratio).


Next Steps

Management

What is the CEO of QBE Insurance Group's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Pat Regan (53yo)

1.9yrs

Tenure

US$3,982,000

Compensation

Mr. Patrick C. Regan, also known as Pat, BSc, FCA, has been Group Chief Executive Officer of QBE Insurance Group Limited since January 1, 2018. Mr. Regan served Chief Executive Officer of Australian & New  ...


CEO Compensation Analysis

Compensation vs Market: Pat's total compensation ($USD3.98M) is about average for companies of similar size in the Australian market ($USD3.81M).

Compensation vs Earnings: Pat's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

51yo

Average Age

Experienced Management: QBE's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

5.2yrs

Average Tenure

66yo

Average Age

Experienced Board: QBE's board of directors are considered experienced (5.2 years average tenure).


Insider Trading

Insider Buying: QBE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$15,43718 Sep 19
Brian Pomeroy
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,235
Max PriceUS$12.50
BuyUS$16,51218 Sep 19
Rolf Albert Tolle
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,321
Max PriceUS$12.50
BuyUS$15,25018 Sep 19
Kathryn Lisson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,220
Max PriceUS$12.50
BuyUS$17,57518 Sep 19
Stephen Fitzgerald
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,406
Max PriceUS$12.50
BuyUS$10,40018 Sep 19
Michael Wilkins
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares832
Max PriceUS$12.50
BuyUS$14,17518 Sep 19
Frederick Eppinger
EntityIndividual
Shares1,134
Max PriceUS$12.50
BuyUS$33,82518 Sep 19
William Becker
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares2,706
Max PriceUS$12.50
BuyUS$14,19013 Jun 19
Frederick Eppinger
EntityIndividual
Shares1,217
Max PriceUS$11.66
BuyUS$15,43813 Jun 19
Brian Pomeroy
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,324
Max PriceUS$11.66
BuyUS$16,51113 Jun 19
Rolf Albert Tolle
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,416
Max PriceUS$11.66
BuyUS$15,25113 Jun 19
Kathryn Lisson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,308
Max PriceUS$11.66
BuyUS$33,83713 Jun 19
William Becker
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares2,902
Max PriceUS$11.66
BuyUS$17,58313 Jun 19
Stephen Fitzgerald
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,508
Max PriceUS$11.66
BuyUS$10,40113 Jun 19
Michael Wilkins
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares892
Max PriceUS$11.66
BuyUS$107,27510 Jun 19
BlackRock, Inc.
EntityCompany
Shares30,198,384
Max PriceUS$14.43
SellUS$010 Jun 19
BlackRock, Inc.
EntityCompany
Shares23,047,648
Max PriceUS$13.59
SellUS$55,544,04426 May 19
The Vanguard Group, Inc.
EntityCompany
Shares4,272,987
Max PriceUS$13.04
BuyUS$131,707,05826 May 19
The Vanguard Group, Inc.
EntityCompany
Shares10,072,963
Max PriceUS$13.08
BuyUS$33,01413 Mar 19
Brian Pomeroy
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,671
Max PriceUS$12.36
BuyUS$9,44313 Mar 19
Frederick Eppinger
EntityIndividual
Shares764
Max PriceUS$12.36
BuyUS$33,01413 Mar 19
Rolf Albert Tolle
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,671
Max PriceUS$12.36
BuyUS$30,50413 Mar 19
Kathryn Lisson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,468
Max PriceUS$12.36
BuyUS$35,16413 Mar 19
Stephen Fitzgerald
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,845
Max PriceUS$12.36
BuyUS$20,80213 Mar 19
Michael Wilkins
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares1,683
Max PriceUS$12.36
BuyUS$67,65913 Mar 19
William Becker
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares5,474
Max PriceUS$12.36

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Richard Pryce (59yo)

    Chief Executive Officer of International

    • Tenure: 6.2yrs
    • Compensation: US$3.42m
  • Peter Grewal

    Group Chief Risk Officer

    • Tenure: 1.4yrs
    • Compensation: US$1.07m
  • Carolyn Scobie

    Group General Counsel & Company Secretary

    • Tenure: 3.9yrs
  • Pat Regan (53yo)

    Group CEO & Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$3.98m
  • Tony Jackson

    Group Head of Investor Relations

    • Tenure: 0yrs
  • Jason Brown (49yo)

    Group Chief Underwriting Officer

    • Tenure: 0.9yrs
    • Compensation: US$1.48m
  • Vivek Bhatia

    Chief Executive Officer of Australia Pacific

    • Tenure: 1.8yrs
    • Compensation: US$3.03m
  • Margaret Murphy (46yo)

    Group Executive of People & Change

    • Tenure: 3.2yrs
    • Compensation: US$1.37m
  • Inder Singh

    Group Chief Financial Officer

    • Tenure: 1.7yrs
    • Compensation: US$1.44m
  • Matt Mansour

    Global Chief Information Officer

    • Tenure: 1.7yrs

Board Members

  • Marty Becker (66yo)

    Independent Chairman of the Board

    • Tenure: 5.7yrs
    • Compensation: US$595.00k
  • Mike Wilkins (62yo)

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: US$271.00k
  • John Green (66yo)

    Deputy Chairman

    • Tenure: 4.9yrs
    • Compensation: US$339.00k
  • Stephen Fitzgerald (55yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: US$302.00k
  • Kathy Lisson (67yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: US$268.00k
  • Pat Regan (53yo)

    Group CEO & Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$3.98m
  • Rolf Albert Tolle (71yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: US$290.00k
  • Brian Pomeroy (74yo)

    Independent Non-Executive Director

    • Tenure: 5.5yrs
    • Compensation: US$290.00k
  • Jann Skinner (61yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: US$286.00k

Company Information

QBE Insurance Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: QBE Insurance Group Limited
  • Ticker: QBE
  • Exchange: ASX
  • Founded: 1886
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: AU$16.537b
  • Shares outstanding: 1.31b
  • Website: https://www.qbe.com

Number of Employees


Location

  • QBE Insurance Group Limited
  • 8 Chifley Square
  • Level 27
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
QBEI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
QBEASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
QBEDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
QBECHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
QBIE.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 2008

Biography

QBE Insurance Group Limited underwrites general insurance and reinsurance risks worldwide. It operates through North American Operations, European Operations, Australian & New Zealand Operations, Asia Paci ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 10:34
End of Day Share Price2019/12/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.