QBE braces for reinsurance pricing at 1.1 ’23, may rejig programmes

QBE may seek to adjust its reinsurance structures at the January 2023 renewals where strong reinsurance pricing momentum is likely to exert pressures, a top company official has acknowledged.

While QBE group CFO Inder Singh expects “an orderly renewal of our programme,” he devoted most of his comment to discussing hopeful mitigants to what he indicated is a challenging reinsurance price environment.

“Reinsurance pricing has seen improved momentum this year, a function of higher primary demand and tightening capacity,” Singh told his company’s Q2 investor call, acknowledging that the trend had proven “quite evident” when QBE sought renewals at the mid-year.

QBE can’t be sunk by a single renewals season, regardless the price, Singh offered in retort. The group sports “a diversified worldwide risk profile that helps mitigate pricing pressure on any one specific market.”

Some one half of the core cat risk programme is placed on a rolling two-year basis, in part to avoid price traps at any single renewal period, he added.

Adjustments may nonetheless be in the works for the coming January renewals as QBE works to the defend the core of its programmes.

“We are progressing with a review of our programme ahead of the 2023 renewal with the primary goal of assuring the medium-term sustainability of key elements of the programme and possibly we are looking to simplify our structure,” Singh said.

QBE will benefit on the flip side of the coin in its own reinsurance unit QBE Re, where the group has overhauled leadership in the second quarter as it works to align and unify the global structure of the business.

QBE Re laid claim to 27% premium growth in H1 2022 “supported by mature improvement in market conditions” with strong new business gains though “what was quite a disruptive January renewal season.” That included the first “active” deployment of capital to property reinsurance “for the first time in many years,” Singh said.

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