QBE ups 2017 claims allowance

QBE has increased its 2017 large individual risk and catastrophe claims allowance in the wake of what it describes as a period of extreme global catastrophe experience.

“The catastrophic events over the past month have caused a tragic loss of life and substantial and widespread property and infrastructure damage,” said John Neal, CEO of QBE. “Our thoughts are with those affected by these devastating events including our customers, business partners and employees.”

QBE stated that given catastrophe losses to date, 2017 will likely prove to be the costliest year in the history of the global insurance industry. The company stated that it had been impacted by Cyclone Debbie in Australia, Hurricanes Harvey, Irma and Maria in the Gulf of Mexico, Caribbean and Florida, and also the earthquake in Mexico.

As a result, QBE said that it has increased its 2017 allowance for large individual risk and catastrophe claims to A$1.75 billion, including allowances for large individual risk and catastrophe claims in the fourth quarter of 2017. The company said that there was also a pre-tax impact to earnings of approximately A$600 million.

QBE added that its combined operating ratio target has now moved to 100.0 – 102.0 percent.

“Whilst it is too early to speculate how much reinsurance and primary insurance pricing will rise as a result of recent catastrophe experience, QBE is well placed to benefit from price rises with much of our reinsurance programs already purchased for 2018,” Neal concluded.

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