QBE says SME package business sold through brokers in Australia is a key area of opportunity for the insurer, which has refined its group-wide portfolio as it seeks less volatile earnings.

“We have a good product, a good claim service, we have good relationships with the brokers and I want to continue to build on it,” Group CEO Andrew Horton told insuranceNEWS.com.au after the company released its annual results. “We’ve been in it a long time and it works really well for us.” 

Mr Horton says the company is considering further efficiencies in the commercial business, including system changes and whether an element of artificial intelligence can be used in looking at submissions. 

“Our modernisation program in Australia is all about trying to make it easier to do business with brokers,” he said. 

The rating environment this year is “generally quite good” and growth opportunities exist across QBE’s divisions, Mr Horton says. “Here in Australia, we have a great position in the commercial market, both packages and farm. In international, we like the reinsurance business at this point in time, we like our UK regional business, so we want to continue to grow in those, and in the US, we do like financial lines, although the rating environment is quite tough at this point of time.” 

Mr Horton told an earnings briefing QBE has exited underperforming volatile property business in the US and two Australian third-party arrangements. 

“These initiatives are driving a meaningful reduction in exposure to global perils, particularly in the US and Australia,” he said. “From the actions currently in train, we see a 15-20% reduction in our exposure to peak wind events, which reduces even further in Australia after taking account of the cyclone pool. This means our potential property volatility is reducing.” 

QBE net profit surged to $US1.36 billion ($2.1 billion) last year from $US587 million ($902 million), with investment returns more than doubling and gross written premium rising 10%. 

The company has forecast gross written premium growth will slow this year to “mid-single-digit” gains, while it expects an improved combined operating ratio.