Underwriting at QBE will remain locally based as the company pursues a global “matrix” approach to improve costs and efficiency, according to CEO John Neal.

The insurer is moving functions such as procurement to a global centre in the Philippines as it targets annual savings of at least $US250 million ($279 million) a year.

But Mr Neal says the company must maintain local customer focus and responsiveness.

“For example, underwriting and distribution will always remain within the strong remit of the local organisation’s profit and loss,” he said in a speech to the Trans-Tasman Business Circle last week.

Mr Neal became Group CEO a year ago, and moved immediately to deal with the problems caused by rapid expansion through more than 100 acquisitions in two decades.

“Our era of acquisition-led growth has now been replaced by one of integration, where we seek to take advantage of synergies and economies of scale to improve our performance and reduce our expense ratio,” he said.

Too many processes are being duplicated and back-office tasks are undertaken from “the world’s most expensive real estate” in Sydney, London and New York.

“I have been guiding the established portfolio of QBE’s local businesses around the world along the globalisation path, taking it relatively slowly and treading carefully, on the basis that if you are eating an elephant, best do it one chunk at a time,” Mr Neal said.

He says the company is shifting from a “silo approach” to a matrix model that links the divisions, head office and the global services centre.