QBE Insurance Group has announced a substantial drop in its reinsurance costs over 2024, with expenses lowering to $3,971 million from $4,226 million in 2023.
This decrease came despite modest cost increases in parts of their reinsurance program, which the company successfully countered through initiatives such as non-core property exits and the implementation of the new Australian cyclone pool.
One of the notable developments in the reinsurance approach of the company was the realization of a $1.6 billion reserve deal in October 2024 that cost the company an initial sum of around $40 million. The company further gained from decreasing crop reinsurance expenses due to lower premiums as well as diminishing external quota share reinsurance.
The reinsurance optimization was among the factors that supported QBE's good financial results, with the insurer posting a profit after tax of US$1.779 billion and gross written premium of US$22.395 billion. This is an improvement from 2023's net profit of US$1.355 billion.
Group CEO Andrew Horton described the financial performance in the year as "encouraging," explaining that efforts to stabilize and grow more resilient had a positive pay-out. Strong operation metrics continued through a combined operating ratio of 93.1% and expense ratio of 12.2%.
Chair Mike Wilkins, while acknowledging QBE's robust capital position, cautioned about upcoming challenges, including inflationary pressures and global security concerns.
The company's proactive risk management strategy involves continuous review of risk appetite, pricing, and reinsurance strategy as well as quarterly governance review of performance and ongoing monthly price adequacy monitoring.
