QBE plans earnings review after 'strong' Q1

QBE is looking to review its full-year earnings outlook after the business recorded a 19% jump in gross written premium in the three months to March and group-wide renewal rate increases averaged 7.9% during the period.

Group CEO Andrew Horton, in his first annual general meeting (AGM) since taking up the role last September, says the business continues to see “positive momentum” despite a number of catastrophes and “significant” geopolitical events from the Russia-Ukraine conflict.

“I have been pleased with QBE’s resilience in this turbulent operating environment,” Mr Horton said.

“We have had a strong start to the year for gross written premium growth and will review FY22 outlook at the half-year result following the key mid-year renewal period.”

QBE recovered last year with a net profit of $US750 million ($1.04 billion) after losing $US1.52 billion ($2.1 billion) in 2020.

Mr Horton says natural catastrophe claims for the first quarter were in line with the allowance the business has set for the period, despite elevated catastrophe experience including the NSW/Queensland floods and storms in the UK and Europe.

On the Russia-Ukraine war, Mr Horton says QBE currently expects to have some exposure to the broader conflict through a number of lines such as political violence, political risk and aviation.

While the situation remains dynamic, he says the potential net impact is currently estimated at around $US75 million ($103 million), and the ultimate impact from the conflict will be reported in catastrophe costs.

At the AGM, a majority of QBE shareholders again struck down a climate resolution co-filed by investor Australian Ethical.

The resolution, similar to ones made at recent AGMs, wants the insurer to disclose fossil fuel reduction targets and plans for moving away from underwriting of oil and gas assets.

Chairman Mike Wilkins, who was repeatedly questioned by a number of pro-climate action shareholders, says he disagrees “very significantly” with the suggestion that QBE is only supporting the Paris Agreement and net-zero targets in words, not actions.

“QBE certainly supports Paris,” Mr Wilkins said. “And we are moving towards a net-zero approach in our own operations through our investments… [and] also in our underwriting portfolios by 2050.”

He says QBE signing up to the Net-Zero Insurance Alliance and being the only Australian-based insurer to do so shows “we are definitely on a pathway to net-zero in all of our underwriting portfolios by 2050”.

“So I do not agree with your assessment that we are paying lip service only,” Mr Wilkins said. “We believe that we have made significant efforts and will continue to make those efforts towards a net-zero future.”