Australian insurer sets out reasons for decline
Australian insurer QBE’s UK-based Europe operations reported first half insurance pretax profit of US$83m, down from $278m a year ago.
The European operations saw gross written premium fall 6% to $2.51bn, while the combined operating ratio moved up to 88.3% from 88.0%.
Insurance profit margin narrowed to 5.2% from 16.7%.
”Trading conditions continued to challenge many areas of our business driven by surplus capacity putting additional pressure on renewal rates,” the company said.
Rates fell by 3% in the first half, which was more than the 2.4% the company had expected, but slower than the 3.3% rise seen in the first half of last year.
Net earned premium fell 6% to $1.56bn, principally due to actions to reinsure some of the company’s more volatile UK long-tail claim exposures.
QBE said that it had prepared for the UK’s Brexit vote, and now “we are well positioned to implement the requisite solutions at a relatively nominal cost in the event we can no longer access the single market from the UK”.