'Costliest year in history': Natural disasters take $600m bite out of QBE profits

By | octubre 3, 2017
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QBE Group has slashed profit expectations for this financial year, saying a series of hurricanes and other disasters left the global insurance industry facing its most expensive year on record.

The insurer on Tuesday said it was lifting its allowance for large disaster claims for the year to $1.75 billion, which will take a $600 million pre-tax bite out of its pre-tax earnings.

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Since Cyclone Debbie struck in late March, extreme weather has wreaked a path of destruction across Queensland and New South Wales.

It said the combined operating ratio –  losses as a share of premium revenue – would blow out to 100 to 102 per cent, indicating no or negative profits from underwriting.

QBE shares fell 4.7 per cent soon after the announcement.

«Given catastrophe losses to date, 2017 will likely prove to be the costliest year in the history of the global insurance industry,» QBE said.

«Cyclone Debbie in Australia earlier this year, Hurricanes Harvey, Irma and Maria which impacted the Gulf of Mexico, the Caribbean and Florida as well as the earthquakes in Mexico have all impacted QBE’s bsinesses.»

QBE’s chief executive John Neal, who last month announced said he would leave the insurer, said: «The catastrophic events over the past month have caused a tragic loss of life and substantial and widespread property and infrastructure damage. Our thoughts are with those affected by these devastating events including our customers, business partners and employees.»

More to come

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