Australian insurer QBE has announced the closure of its North America middle-market segment to “refocus its strategy in the region on those businesses which hold more meaningful market position, relevance and scale.”
The segment represented a gross written premium of ~$500M in the final year results of 2023 (FY23), and has experienced performance challenges over several years.
“The closure will have no incremental impact on appetite or strategy for North America’s three core businesses, Specialty, Crop and Commercial,” QBE stated.
Adding: “QBE will begin non-renewing middle-market policies in accordance with applicable state regulations, with gross written premium expected to begin reducing in FY24, before falling more substantially in FY25. A restructuring charge of ~$100M before tax will be recorded in the FY24 result to account for costs associated with the business closure.”
The insurer also noted that the closure of the segment is expected to have limited impact on QBE’s FY24 Group combined operating ratio.
Meanwhile, ahead of its 1H24 result, the Group expects ~$13.1B 1H24 gross written premium; a figure that represents constant currency growth of ~3% on the prior corresponding period, with net insurance revenue expected to be ~$8.4B.
Group catastrophe costs in the five months to May-2024 are estimated at ~$500M, relative to the 1H24 catastrophe budget of $609M.
Recent events have included US convective storms, the Dubai floods and an initial estimate of $175M-$225M to account for QBE’s net exposure to the ongoing civil unrest in New Caledonia.
Total investment income in the five months to May-2024 was $643M, an improvement from $406M in the first quarter of 2024. The result included a favourable credit spread impact of $76M, and a risk asset result of $104M.
To May-2024 the net impact from asset-liability management activities remained neutral.
Additionally, QBE continues to expect a modest level of adverse prior year development, a conclusion that was forecasted following the completion of recent 1H24 reserve reviews.
“Based on its preliminary view of the 1H24 result, QBE continues to expect FY24 Group constant currency gross written premium growth in the mid-single digits, and a FY24 Group combined operating ratio of ~93.5%,” the insurer concluded.
Source link : https://www.reinsurancene.ws/qbe-to-close-its-north-america-middle-market-segment/
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Publish date : 2024-06-19 09:32:45
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