QBE makes 'strong start' to year as Q1 GWP rises 19%

QBE says the business has made a “strong start” to the new financial year, as first quarter gross written premium (GWP) rose 19% in the three months to March from a year earlier.

Group-wide renewal rate increases averaged 7.9% in the March quarter and the business is looking to review its earnings outlook, CEO Andrew Horton said.

The insurer provided the performance update today as it held its annual general meeting (AGM) where Chairman Mike Wilkins defended the business’s climate stance, fending off activist shareholders who questioned QBE’s commitment to meet the Paris Agreement carbon emissions goal.

Mr Horton, in his first 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 March 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 this morning, a majority of QBE shareholders voted against 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.

Mr 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.”

He says QBE is “very clear” regarding its climate position.

“We acknowledge climate change is a material risk to our business and we take it seriously,” Mr Wilkins said. “Climate change is a significant global challenge that requires the collaborative efforts of many stakeholders to deliver an orderly transition to a net zero emissions economy.”