Australian insurer QBE has reported that 3Q 2023 gross written premium (GWP) growth was 7% on the prior corresponding period, on both a reported and constant currency basis.
The firm also disclosed that group-wide, renewal rate increases averaged 9.6% in 3Q 2023, while ex-rate growth was broadly flat due to the “continuation of portfolio exits, alongside the large first half bias for written premium across a number of growth focus areas.”
Meanwhile, for the first 9M of the year, GWP growth was 10% on the prior corresponding period, or 11% in constant currency, with ex-rate growth of 5%.
Turning to underwriting performance, QBE explained that natural catastrophe activity continued over recent months, underscored by multiple storm, flood and wildfire events in Europe and North America, alongside hurricanes Idalia, Otis and Hillary.
“Catastrophe claims through the period have however trended favourably relative to QBE’s revised FY 2023 catastrophe cost assumption of ~$1.3bn,” the firm said.
QBE added, “The net cost of catastrophe claims in the four months to October is expected to be ~$250m, resulting in catastrophe costs of ~$950m in the year to October.”
The firm observed that claims inflation trends remain broadly similar to those outlined in its 1H 2023 results.
QBE continued, “Whilst some early moderation is clear in certain lines, inflation has remained more persistent across a small number of portfolios including Australia Pacific personal lines, and North America non-core lines and Accident & Health.
“This is expected to result in some strain on the current year, and modest adverse prior-year development. These impacts, alongside a weaker North America Crop result, are expected to be offset by lower catastrophe costs in 2H 2023.”
As for the investment result in Q3 2023, QBE said that despite weaker risk asset performance, strong fixed income returns underpinned favourable investment performance.
The Australian firm noted that interest rates were relatively stable across its key markets, and the core fixed income running yield exited 3Q 2023 at 5.0%, slightly higher relative to the 1H 2023 exit running yield of 4.9%.
At the same time, the total investment FUM for 3Q 2023 was $28.2bn, increasing from $27.4bn at 1H 2023, with risk assets accounting for ~13% of the portfolio.
Looking forward, QBE said it anticipates FY 2023 group constant currency GWP growth of around 10%, adding that it expects the supportive premium rate environment should continue into 2024.
The Australian insurer also forecasts a FY 2023 group combined operating ratio of around 94.5%. QBE’s FY 2023 combined ratio outlook excludes the upfront impact of the reserve transaction completed in 1H 2023.
