QBE has announced that the recent spate of natural disasters in the Northern Hemisphere will have a pre-tax impact to earnings of approximately $600m.
The major insurer has announced that it has increased its 2017 large individual risk and catastrophe claims allowance noting that 2017 could be the costliest year in the history of the global insurance industry.
Cyclone Debbie has had its own impact on insurers in Australia, where the firm is based, but QBE’s exposure to Northern Hemisphere disasters including hurricanes Harvey, Irma and Maria as well as a major earthquake in Mexico have all impacted QBE due to its global presence.
The firm said that while a high degree of uncertainty still remains on the estimated costs of Northern Hemisphere disasters, it has increased its 2017 allowance for large individual risk and catastrophe claims to $1.75 billion, including allowances for large risk and catastrophe claims in the final quarter of 2017.
The company has also adjusted its 2017 combined operating ratio target range to 100.0% to 102.0%.
John Neal, QBE’s outgoing CEO, said that the company does not expect to be damaged by reinsurance price rises, should they occur.
“While it is too early to speculate how much reinsurance and primary insurance pricing will rise as a result of recent catastrophe experience, QBE is well placed to benefit from price rises with much of our reinsurance programs already purchased for 2018,” Neal said.
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