Here’s why the QBE (ASX:QBE) share price surged 30% in 2021

A happy woman in an office puts her hands in the air as if to celebrate while looking at computer.

Last year was an eventful one for the QBE Insurance Group Ltd (ASX: QBE) share price as it rebounded from a disappointing 2020 to finish up 33%.

In late trading today, the QBE share price is down 0.25% at $11.97.

Let’s take a look at the year that was for the insurer…

2021 off to a rocky start

After falling around 34% in 2020, the QBE share price got off to a rocky start in January 2021, before finding its stride in February.

The lower share price coincided with QBE announcing the renewal of its 2021 reinsurance program — arming itself with the help of other insurers in the protection of larger claims made.

The company increased its main retention to $3.4 billion — up by $1 million from its 2020 plan.

Its North America plan was cut in half, down to $200 million, due to COVID-19.

The QBE share price shifted slightly in mid-February after the insurer released its FY 2020 results.

In the presentation, the company reported a net cash loss (after tax) of US$863 million. This compared to an adjusted net profit (after tax) totalling US$733 million the year before.

QBE also did not declare a dividend for FY 2020.

QBE share price overcoming internal struggle

From 27 April to 6 May, shares in the insurer jumped by 17%. However, the company was expected to endure a pushback from shareholders at its AGM on 5 May.

The memo on the shareholders’ agenda? QBE’s remuneration report and its overall financial performance.

QBE chair Michael Wilkins AO cited COVID-19 and “heightened catastrophe activity” as reasons for the losses, though acknowledged the “unacceptable level of prior year reserve deterioration”.

However, Wilkins remained firm that QBE would make a comeback — and in the days following the AGM, QBE became one of the best performing ASX 200 shares.

The QBE share price continued to rise through August, before hitting its 52-week-high mid-month.

Strong prices to end the year

In the remainder of the year, the insurer’s shares dropped by 10% to end the year trading for $11.35 apiece.

The QBE share price saw a small rise after Melbourne’s 5.9 magnitude earthquake on 22 September.

It also saw a small drop following a Federal Court decision that businesses could not be compensated for losses due to government lockdowns.

So what’s on the 2022 agenda for the Australian insurer? Well, we spoke to a number of advisors who have their own predictions — you can read it here.

The company has a market capitalisation of more than $17.7 billion and almost 1.5 billion shares issued.

The post Here’s why the QBE (ASX:QBE) share price surged 30% in 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin 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 has no position in any of the stocks mentioned. 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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