QBE sells ‘attractive’ $375m US insurance agency; maintains ‘limited’ exposure to Ukraine war

Re/insurer  QBE has decided to sell its wholly owned North American agency, Westwood Insurance Agency, to Baldwin Risk Partners for a total consideration of $375 million. The company's chief executive said the business, albeit “attractive”, no longer aligns with its future strategy.

QBE will no longer own any agency businesses in North America. The move forms part of its strategy to shift focus on building its commercial, specialty and crop insurance portfolios in the region.

Westwood is a full service personal lines agency, specialising in builder sourced homeowners’ insurance. In financial year 21, QBE underwrote nearly $200 million of gross written premium placed through Westwood, predominantly in homeowners. Westwood reported pre-tax profit of around $30 million, which was recorded as agency fee income within North America underwriting expenses of QBE.

QBE will continue to provide underwriting capacity to Westwood for a period of at least three years post-sale. The company expects the transaction to result in a “modest post-tax accounting gain” on sale, as well as increase QBE’s APRA PCA multiple by ~0.05x which, it hopes, will help support growth and investment portfolio repositioning.

The transaction is subject to regulatory approval and is expected to complete on 1 May 2022.

QBE group chief executive Andrew Horton, said: “ QBE’s strategy in North America is focused on building its Commercial, Specialty and Crop insurance portfolios. Whilst an attractive franchise, the Westwood business does not align with this strategy, and following this transaction QBE will no longer own any agency businesses in North America.”

Separately, the insurance group expressed its concerns about the events unfolding in Ukraine. However, it maintained that QBE has “limited exposure” to the country and any insured losses associated with the conflict “would not have a material impact” to the group.

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