QBE says catastrophe activity has remained elevated into this year, underscored by two “meaningful” New Zealand events, while it has also seen higher-than-expected claims costs from natural perils late last year. 
 
“The catastrophe events occurring at the end of 2022 and into the first quarter are going to have an adverse impact on QBE in 2023,” Chairman Mike Wilkins told the annual general meeting in Sydney on Friday. 
 
QBE has strengthened reserves by $US130 million ($193 million) for adverse development on events including winter storm Elliot in North America and certain Australian events and has revised combined operating ratio guidance for this year to around 94.5% from 93.5%. 
 
Year-to-April catastrophe costs are tracking around $US480 million ($713 million) compared to a first-half allowance of $US535 million ($795 million). The group has a full-year allowance of $US1.175 billion ($1.745 billion). 
 
QBE raised its guidance for gross written premium (GWP) growth to around 10% on a constant currency basis, compared to mid-to-high single digits previously following a strong start to the year. 
 
GWP grew 14% in the first quarter and the group-wide renewal rate averaged 10% supported by a re-acceleration across property class and higher increases for QBE Re, the company said. 
 
CEO Andrew Horton also told the annual meeting the group is making pleasing progress against strategic priorities, taking action to reduce volatility, driving greater consistency across classes where it has a global footprint, and modernising its business. 
 
QBE defended its oil and gas sector underwriting and net zero commitments following questions from shareholders during the meeting, including on whether the company could be accused of greenwashing. 
 
Mr Wilkins said QBE is working with oil and gas and other energy clients as they undertake strategies and commitments in making the transition to a greener future, and has ramped up its own sustainable energy unit as it looks at business opportunities. 
 
The company had set a new target to achieve net-zero emissions for its global operations by 2030 and is currently determining an interim target for the underwriting portfolio, aligned with the Net Zero Insurance Alliance protocol, he told the meeting. 
 
Morningstar says in a research note that QBE’s first quarter 10% GWP growth exceeded expectations, following an average gain over the last four quarters of 8%, but the price increases are needed given the natural hazard costs and reserve increases for prior-year events.