Here's why the QBE (ASX:QBE) share price is up 27% so far in 2021

The insurance group's shares appear to be making something of a comeback in 2021.

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The QBE Insurance Group Ltd (ASX: QBE) share price continued its positive run yesterday, up another 1.41% to $10.78.

This means the insurance group's shares are now up 27% in 2021, reflecting optimistic investor sentiment.

With no news out of the company, we take a closer look at what could be pushing QBE shares higher.

QBE in recovery mode?

A possible catalyst for the rise in QBE shares this year could be the release of the company's annual general meeting (AGM) address to shareholders.

During late April, QBE revealed the global economic outlook has improved, with growth expected to be at 6% this calendar year.

This is a stark contrast to 2020, during which COVID-19, along with higher-than-normal catastrophe events around the world, impacted the business. QBE reported a disappointing statutory loss of US$1.5 billion for FY20.

However, fast forward to FY21, the company stated that pricing momentum has accelerated, particularly in the northern hemisphere. QBE improved gross written premium (GWP) by 28% in the first quarter, compared to 23% in Q1 FY20 on a constant-currency basis. The increase reflected continued growth in select areas of QBE's global portfolio coupled with a substantial uplift in crop premiums.

Pleasingly, the company reported that the overall first-quarter combined operating ratio is in line with expectations. It further noted that the net cost of COVID-19 remains unchanged.

In addition, QBE updated investors earlier this month in respect to a representative proceeding from Strand Fitness Pty Ltd "and others".

The allegations state that QBE Insurance Australia denied cover to certain policyholders during COVID-19 for losses from business interruption. QBE said the allegations will be defended, and that business interruption claims remain robust. Despite the reassurance, the QBE share price fell by 1.7% on the day of the update.

What do the brokers think?

A broker note from Macquarie two weeks ago advised the broker was raising its price target by 1% to $10.10 for QBE shares. Goldman Sachs and Citi followed suit but provided different outlooks.

Both brokers increased their rating on QBE shares, adding 4.3% to $12.49, and 2.9% to $12.35, respectively. Based on the last closing price of the QBE share price, this implies an upside of around 15% to 16%.

QBE share price snapshot

QBE faced a turbulent couple of months during early 2021, with the company's shares hitting a 52-week low of $7.88. Since then, the QBE share price has recovered to post a healthy gain of 27%. In comparison, the S&P/ASX 200 Financials Index (ASX: XFJ) is up roughly 18% year to date.

QBE commands a market capitalisation of around $15.9 billion, making it the 28th largest company on the ASX.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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