QBE embraces cyber insurance to drive growth and customer retention

QBE Insurance hosted its H1’23 earnings call on Aug 9, 2023. Select highlights:

  • Underwriting Performance: Impacted by catastrophe costs, leading to a combined operating ratio of 98.8% (97.6% when excluding February’s reserve transaction costs).
  • Return on Equity: Managed to sustain a double-digit return despite setbacks, but disappointed by high catastrophe volatility and North American results.
  • AI Enthusiasm: QBE is optimistic about AI’s potential to streamline extensive document processing, enhancing QBE’s operations.
  • Employee Satisfaction: Pride themselves on high employee engagement and well-being; goal is to make QBE a top-choice employer with ample growth opportunities.
  • Gross written premium growth of 13% is consistent with the result achieved in 2022, though much less reliant on crop.
  • During this time, several unexpected events happened. The US had a big winter storm called Elliot that affected almost 40 states. In New Zealand, events in February cost around 30 times more than usual for non-earthquake events. Also, North America had more insured losses than normal because of many severe storms.
  • At the start of the year, QBE had two main goals for its property strategy – to make property underwriting better and to use market changes to get better rates. Regarding new opportunities,
  • QBE hired a new Head of Cyber, indicating potential growth in that sector. The demand for cyber insurance is notably rising. If they remain on the sidelines, it may hinder their customer retention and growth prospects. “You need cyber as an offering.”