QBE plots property client beauty contest; won’t grow into hard market

Re/insurance group  QBE can’t be tempted by record sweet terms and pricing to increase its property stance, but will rather leverage the hard market to improve its property footprint, CEO Andrew Horton has indicated.

“We see property around our long-term portfolio mix target and don’t intend to actively grow into this market,” Horton told his company’s fourth quarter earnings call with analysts and investors. Hesitance comes despite “one of the hardest property markets in many years” and “high demand” for QBE capacity.

QBE, which now has some 25-30% of its book in property the group, would prefer to leverage the hard market to shift towards property exposures towards clients with greater cross-sell, all while controlling possible earnings volatility.

“Our focus this year will be to hold exposure broadly steady, albeit continue to drive improvement in quality,” Horton said.

An excess proportion of property exposures are stand-alone deals across the regions where QBE operates with little or no cross-sell into other lines.

“We can capitalise on market dislocation to shed more of this exposure this year and replace it with higher quality relationships while embedding further rate and better terms,” Horton said.

For FY2022, QBE claimed $933 million in underwriting profit, excluding $1.2 billion in positive risk-free rate impact. The sum was up 34% on the prior year period. Gross written premium was up 13% in constant currency terms. the group combined ratio of 93.7% was down from the prior year’s 95%, despite higher loss ratios for both cat and non-cat claims , chiefly on account of reduced expenses and commissions.

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