With Brit’s UK business under its belt, QBE must now make its offering clear to the mid-market
QBE is finally turning from teenager into adult. It reckons in today’s half-year results that the recently acquired Brit business will now add £175m gross written premium to its UK book.
That will take QBE’s UK regional book to between £500m and £600m, meaning that, in the UK regions, it is a little bigger than Groupama, but nowhere near the top tiers of Aviva, RSA, Zurich, Allianz and AXA.
The Brit deal will also inject QBE with more property business, acting as a balance to its previously heavily skewed liability book. Moreover, it will give QBE the option to write more package business and help bring down its combined ratio, which at 105.6% for the UK regions and parts of Europe, along with a £74m underwriting loss, is not good. (Below: Results are for 2010. QBE’s COR for UK regions and parts of Europe has improved slightly from 106% in 2010 to 105.8%in 2011. However, in 2011, the main UK insurers improved much more rapidly thanks to personal lines growth, something QBE does not have)
Convincing the brokers
QBE will certainly need UK brokers onside, and there is still work to do. Brokers will want to see that QBE is not swanning around with a big London market mentality.
Sure, it must communicate that it has a highly effective London market operation but, at the same time, that it can meet different needs within the UK mid-market sector. That means quick response times, claims paid and on time, new innovation and product ideas, and clear communication.
The interesting thing about QBE is that, although it still has convincing to do in the UK, its global operation is strong. It has a nice blend of business in emerging markets, and a balance between the volatility of catastrophe and the stability of smaller churn-type business. (Below: QBE’s group combined ratio from today’s released accounts)
The goal now is for QBE is to replicate that global success within the UK regions, one of the most challenging marketplaces in the world.