2023 pre-tax profit from QBE Insurance rose to US$1.84bn, marginally missing forecasts, with Ord Minnett pointing out the sharp turnaround is courtesy of double-digit premium growth, an improved claims ratio and the doubling of investment income on policyholder/shareholder funds.

The company has guided to single-digit premium growth in 2024 with the combined operating ratio improving to 93.5%. The broker considers the target achievable despite a slowdown in premium rate increases. An $0.80 dividend is assumed for 2024.

The broker also expects stronger industry profitability will lead to heightened price competition and weaker returns over 2024 and retains a Lighten rating. Target rises 4% to $14.00.

Sector: Insurance.

Target price is $14.00.Current Price is $16.44. Difference: ($2.44) - (brackets indicate current price is over target). If QBE meets the Ord Minnett target it will return approximately -17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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