Andrew Horton has his work cut out when he starts in September as QBE Group CEO, according to analysts who cover the listed insurer.

The possibility of a blowout in business interruption (BI) claims estimates from the pandemic is not the only challenge facing Mr Horton. He also has to find a way to reinvigorate the insurer after it reported the business made a $US1.52 billion ($1.97 billion) net loss last year.

Despite the massive hurdles ahead, analysts say Mr Horton has the credentials to steer the insurer out of its current state of affairs. As reported last week by insuranceNEWS.com.au, the current CEO of UK-listed insurer Beazley was named to take up the position, replacing interim chief Richard Pryce.

QBE has been searching for a permanent Group CEO since Pat Regan left suddenly last September after an external investigation concerning workplace communications with a female colleague revealed he exercised poor judgment.

“It ticks all the right boxes,” Mark Tomlins, an Insurance Analyst with institutional brokerage Hunter Green, told insuranceNEWS.com.au, referring to Mr Horton’s appointment.

“He is so experienced in many of the regions and business lines that QBE writes so in that regard, it’s quite good.

“With an external appointment and a fresh set of eyes, you’d expect him to come in and start a bit of a strategy review.

“His most pressing task is to get familiar with the company and all its operations, to be aware of all the risks QBE underwrites because what you don’t know you don’t know is what blows you up.”

Morningstar analyst Nathan Zaia says while it would have been nice for an internal candidate to take up the position, he points out Mr Horton’s experience will certainly come in handy at this time.

“I think the big question is if Mr Horton can turn around the group’s fortunes in North America,” Mr Zaia told insuranceNEWS.com.au. “QBE noted his success in building Beazley into a market leader in many of their chosen lines of insurance, and at the same time Beazley grew profits.

“QBE has been saying the right things around only writing policies where the insurer will make an adequate return. It now comes down to Mr Horton to execute.”

An analyst with a foreign investment bank who did not want to be named says it was a “good” choice by QBE. “Mr Horton has quite a good reputation in the market,” he told insuranceNEWS.com.au. “He does have a good track record. He was very successful at Beazley.”

Morgan Stanley has released a client note outlining what it believes should be Mr Horton’s priorities when he takes charge in September.

According to the US investment bank, he should reduce earnings volatility and restore growth simultaneously, capitalise on a strong pricing environment to improve margins, seek out pockets of targeted volume growth and deliver stability on reserve development.

Mr Horton should also look at managing COVID and BI claims to current ultimate cost estimates, evaluate QBE’s portfolio composition and gearing levels as well as deliver on cost out targets.

JP Morgan, another US investment bank, told clients in a note it believes Mr Horton’s appointment “will not cause undue concern to the equity markets, given the history of the candidate chosen and the fact that management change was already anticipated”.