Daily Roundup

QBE.ASX CEN.ASX MEZ.ASX

QBE Insurance Group delivered a solid first-half performance, with the company comfortably exceeding its medium-term targets. The insurer reported a return on equity of 17.7%, well above its 15%+ outlook, while adjusted net profit after tax climbed to $1,033 million. Gross written premium expanded 6% on a constant currency basis, keeping the company on track with its mid-single-digit growth expectations.

The combined operating ratio held steady at 92.8%, positioning QBE nicely to hit its full-year target of around 92.5%. Revenue from ordinary activities jumped 10% to $11.95 billion, underpinned by targeted growth across its International and North America divisions. Catastrophe costs came in below allowance, though the company did face modest impacts from the Middle East conflict. The results also benefited from favourable prior year development as QBE continues strengthening its reserving practices across the group.

On the capital front, QBE's position remains robust. The company increased its interim dividend per share by 6% to 33 cents, maintaining a 33% payout ratio. Investment income totalled $828 million, delivering a 2.3% return. The company also completed a A$450 million on-market share buyback, reflecting confidence in its balance sheet and commitment to disciplined capital management.

One headwind worth noting: the effective tax rate ticked up to 24.9% from 23.1%, primarily because International and Australia Pacific operations—which carry higher average tax rates—contributed more to group earnings than North America.

Looking ahead, QBE expects to maintain its disciplined approach, focusing on high-return segments and continuing to build resilience in its reserving practices to offset ongoing challenges in Accident & Health and large claim activity.

In the energy sector, both Contact Energy and Meridian Energy reported strong operational momentum in July. Contact Energy saw mass market electricity and gas sales rise to 579GWh, while wholesale electricity sales reached 1,079GWh. More impressively, the company's unit generation cost dropped to $36.99 per megawatt-hour, down sharply from $47.40 the year prior. Hydro storage levels remain above average with inflows running at 132% of the historical mean, providing a solid foundation as the company pushes forward with renewable projects expected to come online between Q3 2026 and Q1 2028.

Meridian Energy, meanwhile, capitalised on record electricity demand in New Zealand during July—the highest on record. The company's retail sales volumes climbed 2.3% year-on-year, with gains across residential, small-to-medium business, large business, and agricultural segments. Though hydro storage levels dipped from 136% to 128% of historical average by mid-August, July inflows came in at a robust 162% of the historical mean, keeping water reserves well-stocked in key catchments.