QBE Insurance Group is off to a strong start in 2025, maintaining its full-year guidance despite facing challenges like high catastrophe-related losses and market volatility. The company reported an 8% increase in gross written premiums for the first quarter, which ended in April. This growth is attributed to a combination of rate increases and a rise in the volume of business, particularly in its International and North America divisions.
However, the company did face a setback from the run-off of non-core operations in North America, which impacted overall gains by about $100 million. Excluding this and crop insurance, QBE’s underlying growth remained steady at 8%. In the crop insurance segment, QBE expects moderate growth for the remainder of the year but anticipates that net insurance revenue will align closely with 2024 figures due to increased participation in the U.S. federal crop reinsurance pool.
The insurer reported net catastrophe claims of approximately $420 million in the first four months of the year, against a budgeted allowance of $549 million for the first half. These claims were driven by natural disasters like wildfires in Southern California, floods in Queensland, and storms across North America. QBE’s exposure to the California wildfires remains unchanged, and the company is closely monitoring geopolitical and trade risks, though their immediate impact on underwriting appears limited.
On the investment front, QBE saw an increase in investment income, reaching about $410 million for the quarter. This success was driven by favorable interest rates and strong performance in risk assets. The total funds under management rose to $31.6 billion, with risk assets now making up 15% of the portfolio.
Looking ahead, QBE has reiterated its expectations for the year, aiming for mid-single-digit growth in gross written premiums. This forecast takes into account a $250 million impact from ongoing portfolio exits in North America. The company is also targeting a combined operating ratio of around 92.5% for the year.
During a recent annual general meeting, QBE’s chair, Michael Wilkins, emphasized the need for a collaborative approach to disaster mitigation, highlighting that a disproportionate amount of funding is currently spent on recovery rather than prevention. He also raised concerns about the tax burden on insurance customers, noting that taxes add significantly to premiums and that reducing these taxes could provide immediate relief.
QBE’s CEO, Andrew Horton, expressed confidence in the company’s operational and strategic progress, highlighting strong growth, solid underwriting margins, and a robust balance sheet. He emphasized the importance of continued investment in modernization and customer-focused strategies.
In governance news, QBE announced changes to its board, with longtime member Rolf Tolle stepping down and Neil Maidment joining. These changes are part of QBE’s efforts to refresh its leadership and align with long-term growth strategies, including the integration of AI in underwriting and sustainability reporting.