Patrick Regan, Group CEO and Executive Director of Australian re/insurer QBE, has said that the company is increasingly seeing opportunities to “selectively” write more reinsurance business.
Speaking shortly after the release of QBE’s results for the first half of 2020, Regan noted that the company has kept “a very tight watch” on reinsurance business over the last few years.
QBE posted an AU $712 million (US $510 million) loss for the first half of 2020, driven by underwriting impacts from COVID-19, large catastrophe losses, and a poor investment performance.
Over the past few years, Regan said that QBE had not seen the right conditions to justify growing its reinsurance business, but added “that’s changing now.”
While Continental Europe remains undesirable for expansion, QBE is seeing better rate conditions emerging in other parts of the world and potential areas for reinsurance growth.
“We’re not going to go gangbusters,” Regan said, “but there will be yet some more opportunities to write more reinsurance business.”
“Global reinsurance markets have finally started to see some price increases, which started with the Japanese wind renewals in April and developed further with the Florida wind renewals in June,” Regan continued.
“We expect QBE Re will enjoy improved pricing momentum going forward. There was also significant price momentum in North America, where we saw strong double-digit rate increases in property programs, accident & health, professional lines and aviation.”
However, notwithstanding the significant bushfire claims at the start of the year and expectations of ongoing levels of elevated climate-related cats, rate increases in Australia slowed down slightly during Q2.
That said, Regan partially attributes this trend to QBE’s decision to temporarily freeze those rate increases for SME, commercial motor and A&H renewals.