QBE Insurance Group has raised its premium growth outlook for 2023, based on the global insurer’s performance in the first quarter 2024. QBE’s gross written premium for January to March 2023 increased by 11% compared to Q1 2022. On a constant currency basis, this rise to $7.6 billion represents a 14% change.
Due to the strong start to the year and the expectation that rating conditions will remain stable, QBE has raised its FY2023 growth outlook.
The company in Q1 2024 anticipates group constant currency GWP growth of approximately 10%.
Previously, the guidance for constant currency GWP growth was in the mid-to-high single digits. The group-wide renewal rate hikes averaged 10% in Q1.
QBE is forecasting a combined operating ratio of approximately 93.5% for the full year.
Our strategic priority of bringing the enterprise together sits at the core of our strategy, and our objective is to unlock the value of QBE through initiatives that help us leverage capabilities across all markets
Andrew Horton, QBE chief executive
“We are seeing more collaboration across product committees, driving consistency across classes of business where we have a global footprint”.
The group boasted robust investment returns for the quarter, attributing this success to favorable returns in the risk asset portfolio and favorable interest rates. QBE reported a total investment income of $406 million for Q1.
The insurer released a statement, saying: “Group-wide renewal rate increases of 7.3% were in line with expectations, and reflected reduced rate increases across certain property and reinsurance lines compared to the prior corresponding period.
The 10% increase in group-wide renewal rates for the first quarter reflects an improvement over the same period last year across all divisions—North America, International, and Australia Pacific.
This increase was driven by a reacceleration in rate hikes across property classes.
In relation to portfolio optimisation, we have focused on developing multi-year enterprise portfolio mix targets, which will be embedded into planning process. These targets have been calibrated to our ambition for sustainable growth and to be a less volatile business.
Excluding rate increases, premiums declined by 2% in constant currency due to lower Crop premium, and property portfolio exits in North America and Australia. Excluding Crop, group gross written premium and ex-rate growth was 9% and 3%, respectively.
In Crop, organic growth is expected to partially offset the impact of lower commodity prices, and QBE currently estimates that Crop gross written premium will be ~$3.9B in FY24.
In the four months to April 2024, the net cost of catastrophe claims is ~$300 million, which compares to QBE’s catastrophe allowance for 1H2024 of $609 million.
Catastrophe costs were underscored by a number of storm events, predominantly in Australia and North America.
QBE has also made significant strides in reward and performance, leadership and capability, and workforce planning, aligning with people priority. Focus on culture has strengthened the alignment and connection to QBE’s purpose.
