QBE North America announces 2014 half-year results

In the Aug. 19 release of QBE Insurance Group's 2014 half-year results (qbe group), QBE North America’s performance showed improvement over 2013 in two key financial metrics:

  • Our net combined operating ratio (NCOR) was 98.4% compared to 99.3% in 2013
  • Our return on equity (ROE) was 6.6% compared to 6.2% in 2013

“QBE’s half-year results reflect the progress we’re making to transform QBE North America into a more competitive, sustainable organization that can be counted on for consistent profitability,” says Dave Duclos, North America President and CEO.

QBE NA business unit highlights

Standard Lines P&C Business Group

Our Standard Lines business incorporates our Program Division, Middle Market Business, Large Account/Risk Management business and Personal Lines business. Performance was on or close to plan in the first-half for these lines of business. The outcome was driven by a higher loss ratio due to winter and spring storms and prior year reserve charges on several run-off programs. Given the obstacles, we’re encouraged by our remediation efforts and the progress we’ve made to date.

We announced that QBE would be divesting from the agency business in the U.S. To clarify, QBE owns three MGAs (Deep South, CAU and SIU), and it is these three agencies that will be sold, with QBE retaining the underwriting revenue stream. This decision is in line with our strategic direction to be an underwriter, and it does not affect A&H platform, led by Bob Lang, Accident and Health Underwriting, or our Middle Market business led by Jeff Post.

Specialty Business Group

Our Specialty business consists of a variety of products including D&O, E&O, Accident and Health, Surety and Trade Credit, Medical Stop Loss and Aviation. Performance was very strong in the first half of the year, with an NCOR several percentage points below plan. This was driven by higher-than-plan premium due to strong organic growth.

Crop

Results were driven by highly unusual adverse prior year claims that affected the entire industry. However, individual policies are up 3.8% year over year, which are partially offsetting lower commodity prices.

Stock market reacts positively to QBE’s performance

On Aug. 20, the day after the results were announced, QBE’s stock rose from A$10.71 to A$11.24.

QBE North America is a division of QBE Insurance Group Limited, one of the world’s 20 largest insurance and reinsurance companies. We are rated A+ by Standard & Poor’s and A (Excellent) by A.M. Best.* Located in 43 countries with 13,500 employees worldwide, we’re operational in all key global insurance markets and considered a leading underwriter within our chosen markets.

Review the full results

*Learn more about ratings guidelines at standardandpoors.com and ambest.com.

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