Insurance giant boss says it’s been a ‘tough year’

Insurance giant boss says it’s been a ‘tough year’ | Insurance Business

Insurance giant boss says it’s been a ‘tough year’
QBE Group CEO John Neal yesterday admitted that it has been a “tough year” for both the company and its investor after revealing a net loss after tax of AUS$280m.

It attributed the net loss to large one off costs primarily associated with its North American operations.

In a briefing yesterday, Neal said 2013 had been challenging. “Clearly 2013 was a particularly tough year for our investors and for QBE,” Neal added. “We have taken the right actions. We have put in place a very experienced leadership around the world […] We have not hesitated to shed the top line to ensure we can get sustainable short and medium term profitability going forward.

“Frankly, it would have been easy to have deferred our operational transformation program in a pretty tough year but the early benefits of that program are remarkable and well worth the effort so the program has continued through 2013 and 2014.”

He praised the Australian and New Zealand operation for producing “absolutely sparkling” results. Australian and New Zealand GWP reported a GWP of $5.3m and the combined operating ratio was 87.4%. He added that it is the first division where the operational transformation plan has been completed.

Looking to the future of the Australian and New Zealand operation, Neal forecasted moderate rate increases in 2014 but targeted top line growth of six to seven percent.

Turning to the overall outlook for 2014, Neal said market conditions look stable. The forecasted premium rate increases are expected to be 2.5% overall “largely driven by rate increases in Australia and North America”.
 “We are not focussed at all on premium or top line in 2014,” Neal continued. “We are continuing to ensure that we improve the combined operating ratio and the insurance margin and it is for that reason that you are seeing GWP and net earned premium fall 2013/2014.”

The COR is expected to be 93% and insurance profit margin, 10%.

In other news, the group has appointed of Sir Brian Pomeroy as a non-executive director effective 1 June 2014.

Sir Brian is based in the United Kingdom and is currently the non-executive Chairman of QBE Insurance (Europe) Limited and QBE Underwriting Limited. He is also a member of the board of the Financial Conduct Authority in the UK. Sir Brian has extensive experience in the insurance industry, including in his previous role as a nominated member of the Council of Lloyd's. He was the senior partner of Deloitte Consulting in the UK until 1999 when he took up a number of public, private and voluntary sector appointments.

Belinda Hutchinson AM, chairman of QBE said: “Sir Brian Pomeroy has been a member of the boards of QBE’s European operations for several years. He has a strong understanding of global insurance markets, as demonstrated by his long- standing involvement with the Council of Lloyd’s. In his time with QBE in Europe he has made a valuable contribution to debates at both strategic and operational levels. We are delighted that Brian has agreed to join the QBE Group board.”

QBE's figures were in American dollars. The figures in this story were converted to Australian dollars using an online currency converter on Wednesday 27th February.