QBE is achieving above-market increases as its premium rate momentum continues to accelerate.
Group premiums rose an average 5.9% in the third quarter, up from 5.1% in the preceding three months and 4% in the first quarter, CEO Pat Regan told the UBS Australasian Conference yesterday.
For the nine-months to the end of September rate increases have averaged 5% compared to 1.4% at the same time last year.
“While market conditions are certainly a little more supportive, we believe our forensic approach to portfolio analysis and increasingly sophisticated assessment of premium rate adequacy by class of business is contributing to above market-average premium rate increases,” Mr Regan said.
In the Australian business, commercial property rates have risen 17.7%, while gains of 14.2% were reported for aviation and 10% in strata.
Other highlighted gains include 10.6% in international property for the European operations and a 10.1% rise in reinsurance accident and health in North America.
“Just as pleasing as the level of premium rate increases being achieved is that retention levels have continued to hold up,” Mr Regan said.
Australia and New Zealand rates rose 6.9% overall in the third quarter, excluding compulsory third party, outpacing gains of 4.3% in North America, 4.6% in Europe and 1% in the Asia-Pacific.
Mr Regan, who took up the CEO role in January, says QBE aims to have global underwriting standards in place by the end of the year as part of its “Brilliant Basics” program.
“Very, very few international insurers even try a common standard of underwriting, pricing and claims across their group,” he said. “We are aiming for a common level of excellence in every portfolio in every country where we do business.”
QBE is also pursuing advancements through technology and insurtech partnerships in areas such as pricing, risk selection and data analytic techniques.
Mr Regan says the company recently appointed Tim Pitt from XL Catlin in the new role of Global Head of Pricing to help accelerate its efforts.
It also announced two weeks ago it was restructuring its divisions as a simplification program continues, with Australian and New Zealand operations to incorporate the Pacific and India while European operations will merge with the rest of Asia to make a new International division.
Mr Regan earlier this year sold the group’s Latin American business and QBE is exiting North American personal lines
A sale agreement for the remainder of the North American personal lines operations is “imminent”, Mr Regan told the conference.
QBE will update the market on December 11 on its cost reduction program and finalised details of its 2019 reinsurance program.