QBE Issue Performance Update | Insurance Business Canada

“QBE continues to expect group constant currency GWP (gross premiums written) growth of around 10% in 2022 and expects a supportive premium rate environment to persist through 2023.”

The company further states: As outlined in the H1 2022 (H1) results, QBE’s FY22 combined ratio outlook excludes the impact of the revised Australian pricing commitments. ”

Sydney-based QBE referred to an investigation into pricing practices in Australia. The study found instances where policy pricing promises were not fully realized and millions of dollars were spent on customer remediation.

Regarding GWP, the insurance group reports:

“The Group-wide renewal rate increased by an average of 8.4% in the third quarter of 2022, an 8% decrease in growth compared to the first half of 2022. Following terminations and a significant first half bias in premiums written across a number of growth focus areas, persistence remains at a good level.

“In the year to September, the Group’s gross premiums written grew 12% q/q, 16% at constant currency, and exchange rate growth was 11%. Excluding crops, the Group’s gross premiums Premiums written increased 12% at constant currencies, with exchange rate growth of 6%.”

QBE’s operations are divided into North America, International and Australia Pacific. Rates increased in all three regions. Premium rate changes exclude North American crops and/or Australian compulsory third-party motors, but premium growth rates are quoted on a constant currency basis.

Regarding underwriting performance, QBE highlighted the impact of catastrophe and inflation.

“With catastrophe activity picking up in the second half of the year, global catastrophe costs for the insurance industry in 2022 are likely to again exceed USD 100 billion,” the insurers shared. “By October, the net cost of catastrophe claims for the second half of the year will reach $430 million, and the total net cost of catastrophe claims through October will reach $880 million.

“QBE Catastrophe Benefits for November and December are $180 million. In addition to previous experience, QBE currently assumes a net catastrophe cost of $1.06 billion for FY22. , which includes US$75 million for exposure to the Russian/Ukrainian conflict, exceeding the US$962 million 2022 catastrophe benefit.”

Meanwhile, risks related to the persistence of inflation remain high, according to QBE, and the company hopes to strengthen its long-tail reserves in the second half to build resilience against a more protracted inflation environment. I’m here. However, the release of the COVID risk margin largely offsets the residual risk associated with business interruption claims.

In terms of investment performance, QBE says risk assets and credit continue to perform well.

“Interest rates continue to rise across our major markets, resulting in a negative impact on the Asset Risk Free Rate of USD 461 million in Q3 2022, which represents an increase of USD 413 million. was broadly offset by the impact of favorable billing liability discounts of USD 10,000,” Global Business declared.

“As a result of higher risk-free interest rates, the exit bond running yield was 3.7% in Q3 2022, continuing to outperform the exit running yield of 2.5% in the first half of 2022. Total investment FUM in Q3 2022 (funds under management) was USD 26.3 billion, down from USD 26.7 billion in the first half of 2022.”

The numbers come amid continued volatility in financial markets.