Rate increases drive QBE’s Q3 premium growth

QBE said premium growth of 7% for the third quarter of 2023 to $17.4bn was driven by average renewal rate increases across the group of 9.6%, with growth excluding rate hikes ‘flat’ after trimming its portfolio.

Rates were running 12.5% higher for QBE’s domestic business in Q3, strengthening from 12.2% in Q2 and 11.3% in Q1, taking the average for the year to date to 12%. QBE’s North American lines reported rate increases of 12.3% for Q3 2023, up from 11.5% in Q2 and 10.6% in the first quarter of the year. Rate increases for international business, however, at 6% showed signs of weakening from 9.5% in Q2 and 9.2% in Q1.

The Australian insurer said premiums for the first nine months of 2023 are showing 10% growth, running at 5% excluding the impact of rate increases, putting it on track to end 2023 with premiums up 10%.

“We expect the supportive premium rate environment should continue into 2024,” QBE said.

Natural catastrophe losses totalled $250m in Q3 2023, QBE said, taking its total for the first nine months of 2023 to $950m, which sits within its revised full-year 2023 assumption of $1.3bn in cat losses. QBE said the quarter saw storm, flood and wildfire events in Europe and North America as well as hurricanes Idalia, Otis and Hillary, but it added Q3 cat claims “trended favourably”.

QBE said it has seen some signs of early moderation of claims inflation in certain lines of business, but inflation has persisted across portfolios including Australia Pacific personal lines and North America non-core lines and accident & health.

“This is expected to result in some strain on the current year, and modest adverse prior year development,” QBE said, alongside a weaker result from North America crop insurance. However, QBE said the impact from both factors will be offset by lower cat costs in the second half of 2023.

QBE said it expects to close 2023 with a combined ratio of about 94.5%.