QBE Insurance Shares Hit Decades High: Has Resistance Flipped to Support?

QBE Insurance shares (ASX: QBE) has surged to its highest level in more than 15 years, with the A$25 mark emerging as a new support zone after Thursday’s intraday peak of A$25.61 capped a remarkable 29% rally in 2026 year-to-date.

QBE shares have established themselves as one of the standout performers in the financials sector this year, with the stock consolidating around A$25.00 following the multi-year high. The advance represents a dramatic turnaround for a company that spent much of the past decade working through legacy issues and portfolio restructuring.

The technical breakout has attracted momentum flows, with the A$25 level now functioning as a floor that has held through multiple tests in recent sessions. The final trading session of the week will see QBE shares kick off at A$25.58, the highest level since 2009.

Fundamentals Support the Rally at QBE

The rerating reflects a fundamental transformation in QBE’s earnings power and risk profile. The company’s full-year 2025 results, released on 20 February 2026, delivered adjusted net profit after tax of approximately US$2.1 billion, up from roughly US$1.7–1.8 billion in 2024. More significantly, the adjusted return on equity climbed to around 19–20%, marking the highest level in more than a decade and validating years of strategic repositioning.

The combined operating ratio improved to approximately 91.9% from 93.1% in the prior year, demonstrating better underwriting discipline and portfolio mix. Gross written premium growth of 7–8% exceeded management’s mid-single-digit guidance, reflecting both rate increases and organic volume expansion across key markets. Investment income benefited from higher yields, with the portfolio generating total returns of about US$1.6 billion and a yield of roughly 4.9%.

Catastrophe claims came in well below the company’s actuarial allowance for 2025, providing a meaningful earnings tailwind. Management attributed the benign experience partly to improved risk selection, reinsurance structuring, and portfolio mix rather than pure luck, though the inherent volatility of natural catastrophe losses remains a feature of the business model.

Capital Returns

QBE declared a final dividend of 78 Australian cents per share, bringing the full-year 2025 payout to A$1.09—approximately 25% higher than the prior year’s A$0.87. The payout ratio of around 50% of adjusted net profit after tax aligns with the company’s stated policy and signals management confidence in earnings sustainability. Markets have responded positively to the combination of yield and growth, with the current dividend representing an attractive income stream at prevailing share prices.

The company’s capital position remains robust, with solvency metrics supporting the potential for further shareholder returns through either increased dividends or share buybacks if current performance levels persist. The de-risking of legacy North American non-core lines has largely been completed, with residual impact becoming negligible from 2026 onward and simplifying the earnings profile going forward.

Simplification Strategy

In early 2026, QBE announced the divestment of its Global Trade Credit and Surety business to Swiss Re Corporate Solutions, continuing a multi-year strategy to sharpen focus on core operations. The transaction forms part of a broader portfolio rationalisation that has seen the company exit or run off businesses where it lacked scale or competitive advantage.

Markets have generally interpreted these moves as evidence of disciplined capital allocation, with management prioritising returns over revenue growth for its own sake. The strategy has reduced tail risk and improved the predictability of earnings, factors that typically support valuation multiples in the insurance sector.

Sector Tailwinds

QBE’s resurgence coincides with a favourable backdrop for global commercial property and casualty insurers. Pricing discipline across the industry, combined with elevated investment yields, has supported margin expansion. The company’s strong positioning in specialty lines and crop/agriculture insurance provides exposure to commodity-linked and climate-related pricing dynamics that some analysts view as structural rather than purely cyclical.

Trading updates through late 2025 and into 2026 have reinforced confidence that the earnings momentum is sustainable. Management has maintained guidance for a Group combined operating ratio in the low-90s range, with continued premium rate increases across key markets supporting the outlook. The net catastrophe allowance for 2026 remains conservative, though management acknowledges the inherent uncertainty in modelling natural disaster frequency and severity.

Valuation and Risk

The rally to two-decade highs has inevitably raised questions about valuation and cycle timing. At current levels, QBE trades at a material premium to its historical multiples, reflecting the market’s assessment that the company has fundamentally improved its risk-adjusted return profile. Bulls argue the stock is simply catching up to global peers after years of underperformance, while bears contend that much of the good news is now priced in.

The sustainability of current return on equity levels remains a key debate. Sceptics point out that below-allowance catastrophe experience is cyclical and mean-reverting, with climate-driven volatility potentially exceeding modelling assumptions in future years. Environmental and political pressures around insurance affordability could also constrain pricing power in personal lines, though commercial lines represent the bulk of QBE’s portfolio.

Leadership

The appointment of Chris Killourhy as Group Chief Financial Officer, succeeding Inder Singh, represents ongoing leadership evolution. Markets have interpreted recent management changes as continuity-friendly rather than disruptive, with no indication of strategic reversal from the current focus on underwriting discipline and portfolio simplification. Strong results around the time of the transition have supported confidence in governance and controls.

Outlook

QBE’s transformation from troubled underwriter to sector outperformer reflects years of strategic repositioning that have finally translated into sustained high-teens returns on equity and materially higher dividends. The establishment of A$25 as a support zone marks a psychological shift for a stock that struggled to escape the teens for much of the past decade. Further twists may lay ahead, but for now, bulls will be enjoying these decades high closes.