QBE Insurance

A portfolio holding in focus is QBE, global general insurer. QBE is expected to benefit from a number of fundamentals supporting the company including:  

• Strong premium inflation and moderating cost inflation, driving strong margin expansion over FY24 and FY25. This trend has been demonstrated this reporting season by QBE’s offshore peers, providing support to our thesis.
• QBE's earnings are leveraged to their investment returns which will be benefit from materially higher bond yields.
• Continued improvement in North American business.

QBE is currently trading at a valuation that reflects cyclical lows. The convergence of these favourable market dynamics positions QBE for multiple expansion and hence is a conviction position in the Portfolio.

Source : Solaris Investment Management