QBE records $1.2bn loss for 2017
Australia headquartered QBE has reported a net loss of $1.25 billion for 2017 driven by record catastrophes in the second half of 2017 together with deterioration in its emerging markets businesses and two significant non-cash items.
The 2017 loss compares to a net profit of $844 million in 2016. Despite reinsurance protections, the net cost of catastrophes for QBE was $1.23 billion in 2017 compared with $439 million in 2016.
The group’s adjusted combined operating ratio was 104.1 percent in 2017 compared with 93.7 percent in the prior year.
The 2017 results also included a non-cash impairment of goodwill ($700 million) and write down of the deferred tax asset following the reduction in the US corporate tax rate ($230 million) in the North American Operations.
The North American operations’ performance was heavily impacted by second half catastrophes including Hurricanes Harvey, Irma and Maria and the Californian wildfires, resulting in a combined operating ratio of 109.1 percent, up from 98.5 percent in the prior year. Large individual risk and catastrophe claims in excess of the division’s aggregate reinsurance protection added 6.9 percent to North American operations’ combined operating ratio.
QBE wants to reposition its North American operations to improve underwriting results.
In Latin American operations, a heightened incidence of large individual risk and catastrophe claims coupled with deterioration in legacy portfolios and adverse prior accident year claims development contributed to a 113.1 percent combined operating ratio. As part of a broader strategy to simplify its global footprint and enhance the quality and consistency of the results, QBE has decided to exit the region.
Join us at Intelligent Automation in Insurance - London 2018. Book Now.
More of today's news