QBE Insurance : 2016 Financial Results

QBE Insurance Group Limited ABN 28 008 485 014 Level 27, 8 Chifley Square, SYDNEY NSW 2000 Australia GPO Box 82, Sydney NSW 2001‌

telephone + 612 9375 4444 • facsimile + 612 9231 6104 www .qbe.com

27 February 2017 The Manager

Markets Announcements Office ASX Limited

Level 4

Exchange Centre 20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam,

Report on results and financial statements for the year ended 31 December 2016

QBE Insurance Group Limited announces to the market the financial results for the year ended 31 December 2016.

The following documents are attached:

1. Appendix 4E - Preliminary Final Report;

2. QBE's 2016 Annual Report including financial statements for the year ended 31 December 2016;

3. Appendix 4G for the year ended 31 December 2016; and

4. QBE's Annual Review, which includes QBE's Sustainability Report. Yours faithfully,

I

Carolyn Scobie

Company Secretary

Encl.

UP / DOWN % CHANGE

2016

US$M

2015

US$M

Net profit after tax for the year to 31 December 2016 was $844 million, up 23% compared with a net profit of $687 million last year.

The Group's underwriting result was a profit of $668 million compared with a profit of $629 million last year, reflecting a combined operating ratio of 94.0% compared with 94.9% last year. Excluding the impact of lower risk-free rates used to discount claims liabilities, the statutory combined operating ratio would have been 93.2%, lower than our target range of 94%-95%.

Net investment income was $746 million compared with $665 million last year. The overall net return was 2.4%, slightly below target and impacted by mark to market losses on longer duration fixed income securities.

The tax rate was 21% of net profit, down from 27% last year, reflecting the mix of corporate tax rates in the countries in which QBE operates.

DIVIDENDS

AMOUNT PER SECURITY (AUSTRALIAN CENTS)

FRANKED AMOUNT PER

SECURITY (AUSTRALIAN CENTS)

Interim dividend 21 10.50

Final dividend 33 16.50

The Dividend Reinvestment Plan will be satisfied by the acquisition of shares on-market with no discount applicable. The Bonus Share Plan will be satisfied by the issue of new shares with no discount applicable.

The share issue price for the Dividend Reinvestment Plan and the Bonus Share Plan will be based on a volume weighted average price of the shares in the 10 trading day period from 14 March to 27 March 2017 (both dates inclusive).

The record date for determining shareholder entitlements to the dividend is 10 March 2017.

The last date for receipt of election notices applicable to the Bonus Share Plan and the Dividend Reinvestment Plan will be 13 March 2017.

The unfranked part of the dividend is declared to be conduit foreign income. The final dividend will be paid on 13 April 2017.

Additional disclosures

Additional Appendix 4E disclosure requirements can be found in the QBE Insurance Group Limited Annual Report for the year ended 31 December 2016 (Attachment A).

The Annual Report should be read in conjunction with any market or public announcements made by QBE Insurance Group Limited during the reporting year in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.

The independent Auditor's Report is included at pages 179 to 187 of the Annual Report.

Other information

During the year, QBE Insurance Group Limited held an interest in Pacific Re Limited (30.97%) and Raheja QBE General Insurance Company (49%). The Group's aggregate share of profits of these entities is not material.

Q B E I N SU R AN C E G RO U P LI M ITED