QBE unveils A$200m cost cutting programme
Australia-based insurer QBE is implementing measures targeting more than A$200 million ($144 million) in gross cost savings by 2021.
The group plans to make its operations more effective and streamlined, consolidating technology tools, reducing IT run costs and re-engineering and automating processes.
As part of the plan, QBE expects to generate more than A$200 million in gross cost savings by 2021 before underlying inflation and further investment in its underwriting and claims programme, technology and digitisation. In addition, the insurer is targeting a net reduction of expenses of around A$130 million by 2021 from around A$1.8 billion currently. The group is aiming to reach an expense ratio of around 14 percent by 2021 representing an improvement of around 1.5 percent, inclusive of very modest and selective premium growth. The plan will incur around A$95 million of restructuring costs over 2019-2020.
“As part of this programme, we are investing in our people and ways of working to ensure we operate more efficiently,” the company said in a statement. “At the same time, we are investing in technology initiatives, such as the consolidation of underwriting platforms in North America and a more advanced workflow tool for our European underwriters”.
Investments in technology are expected to help improve pricing, risk selection and claims management. The investment are also set to allow QBE to retire legacy applications, thereby reducing our IT run costs.
“We have a clear set of initiatives to achieve the targeted efficiency outcomes and, most importantly, to ensure that our people are engaged, accountable and will be measured on their performance,” QBE noted.
In November 2018 QBE had already unveiled plans to consolidate its Asian and European operations into a "large and better resourced" international division while merging its Pacific business with its Australian & New Zealand operations.
For 2017 QBE had reported a net loss of $1.25 billion driven by record catastrophes in the second half of 2017 together with deterioration in its emerging markets businesses and two significant non-cash items.
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