Published on May 6th 2022 in

QBE makes a “strong start” to year

QBE says the business has made a “strong start” to the new financial year, as first quarter gross written premium (GWP) rose 19% in the March quarter year-on-year. Group-wide renewal rate increases averaged 7.9% and the business is looking to review its earnings outlook, said CEO Andrew Horton.

Horton, in his first AGM since taking up the role last September, said the business continues to see “positive momentum” despite a number of catastrophes and “significant” geopolitical events from the Russia-Ukraine conflict. “I have been pleased with QBE’s resilience in this turbulent operating environment,” he said. “We have had a strong start to the year for gross written premium growth and will review FY22 outlook at the half-year result following the key mid-year renewal period.”

Mr Horton added that natural catastrophe claims for the March quarter were in line with the allowance the business has set for the period, despite elevated catastrophe experience including the NSW/Queensland floods and storms in the UK and Europe.

On the Russia-Ukraine war, Mr Horton says QBE currently expects to have some exposure to the broader conflict through a number of lines such as political violence, political risk and aviation. While the situation remains dynamic, he said the potential net impact is currently estimated at around $103 million, and the ultimate impact from the conflict will be reported in catastrophe costs.

At the AGM, a majority of QBE shareholders voted against a climate resolution co-filed by investor Australian Ethical. The resolution, similar to ones made at recent AGMs, wants the insurer to disclose fossil fuel reduction targets and plans for moving away from underwriting of oil and gas assets.

In defending the business’ climate stance, Chairman Mike Wilkins, who was repeatedly questioned by a number of pro-climate action shareholders, said he disagrees “very significantly” with the suggestion that QBE is only supporting the Paris Agreement and net-zero targets in words, not actions. “QBE certainly supports Paris, and we are moving towards a net-zero approach in our own operations through our investments, and also in our underwriting portfolios by 2050. So, I do not agree with the assessment that we are paying lip service only. “We believe that we have made significant efforts and will continue to make those efforts towards a net-zero future.”

We acknowledge climate change is a material risk to our business and we take it seriously. It is a significant global challenge that requires the collaborative efforts of many stakeholders to deliver an orderly transition to a net zero emissions economy.” - added Wilkins

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