QBE's North American crop business rocked by claims blowout

QBE's North American crop business rocked by claims blowout | Insurance Business

QBE

QBE Insurance Group’s North American crop business is expected to pay claims of around 107%-109% on net earned premium of nearly $1.2 billion in 2019 due to the unusually cool season.

The ASX-listed insurance giant said a rise in crop damage claims would adversely impact the unit’s combined operating ratio, a key measure of profitability – sending it slightly above the top end of its 2019 target range of 94.5% to 96.5%.

The company’s net investment return in 2020 is also expected to drop, from 3% to 3.5%, to the range of 2.5% to 3%, reflecting lower global risk-free rates.

QBE said “the adverse weather conditions are also anticipated to contribute to slightly elevated attritional loss experience” in some of its North American property classes, Reuters reported.