The QBE Insurance Group Ltd (ASX: QBE) share price is starting the week positively.
In morning trade, the insurance giant's shares are up 2% to $15.64.
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Why is the QBE share price rising?
Investors have been buying the company's shares this morning after responding positively to the release of its third-quarter performance update.
According to the release, third quarter gross written premium (GWP) growth was 7% over the prior corresponding period on both a reported and constant currency basis.
A key driver of this was its group-wide renewal rate increases, which averaged 9.6% for the quarter.
Ex-rate growth was broadly flat due to the continuation of portfolio exits, alongside the large first-half bias for written premium across a number of growth focus areas.
Another positive potentially lifting the QBE share price today is that its retention has remained at favourable levels. This bodes well for its performance in 2024.
The above means that in the year to September, QBE's GWP growth was 10% on the prior corresponding period or 11% in constant currency.
Claims update
QBE notes that natural catastrophe activity has continued over recent months. This includes multiple storm, flood, and wildfire events in Europe and North America, along with hurricanes Idalia, Otis and Hillary.
However, catastrophe claims through the period have trended favourably relative to QBE's revised FY 2023 catastrophe cost assumption of ~US$1.3 billion.
The net cost of catastrophe claims in the four months to October is expected to be ~US$250 million, resulting in catastrophe costs of ~US$950 million in the year to October.
Guidance
The sum of the above is that QBE remains on track to achieve its guidance in FY 2023.
It continues to expect group constant currency GWP growth of around 10%. It also expects the supportive premium rate environment to continue into 2024.
In addition, it has reaffirmed its FY 2023 Group combined operating ratio guidance of around 94.5%. This continues to exclude the upfront impact of the reserve transaction completed in the first half.
