The QBE Insurance Group Limited (ASX: QBE) share price has surged 28.1% in 2019 to be the top insurance stock in the S&P/ASX200 Index (ASX: XJO) – so why has it outperformed its peers?
What's happened so far this year for QBE?
The QBE share price neared its 52-week low of $9.28 per share in mid-December 2018 as the Financial Services Royal Commission wrapped up its final hearings and the company completed the sale of its insurance operations in Puerto Rico, Indonesia and the Philippines.
The insurer released its full-year FY18 results on 25 February and recorded growth in gross written premiums (GWP) of 2.5% on the prior corresponding period to $13.66 billion.
QBE's attritional claims ratio fell from 51.3% in 1H18 to 49.1%, while its cash return on equity (ROE) moved back into the black at 8% for the full year. The company recorded positive half-on-half pricing momentum on a global basis, up 90 basis points (bps) to 5.5%, with upwards trends in its North America, Australia & New Zealand and Asia-Pacific segments.
On the back of the strong results, QBE management announced a significant increase in its final dividend, which increased by 24 cents per share (cps) to 50 cps in FY18.
What about QBE's insurance peers?
QBE has a market cap of $16.8 billion which is comparable to fellow insurers including Insurance Australia Group Ltd (ASX: IAG) with a $17.6 billion market cap and the $17.2 billion Suncorp Group Ltd (ASX: SUN).
Suncorp's share price has climbed 6.8% this year to trail both QBE and IAG (10% year-to-date). Suncorp and IAG were both hit by extraordinary events, with IAG recording a $607 million provision for the December 2018 Sydney hailstorm and Suncorp estimating the cost of the Townsville floods to be more than $90 million.
While QBE inevitably had some exposure to such events as a large Australian insurer, its greater diversification across insurance products and geographies ultimately saw its share price largely unaffected by these events which has been a key factor in its continue share price appreciation.
Is the QBE share price a Buy?
Despite the strong start to the year and QBE's strategic positioning in the insurance market, the QBE share price is trading near its 52-week high of $12.79 per share and I'd be wary of future growth given potential headwinds for insurers in the next 6-12 months.
In the meantime, Fools should consider adding one of these top growth shares to boost portfolio returns in the medium- to long-term.
