Qbe Insurance Group Limited · ASX:QBE
Qbe Insurance — Investor Day (October 2012)
94 slides from Qbe Insurance's investor day presentation, Oct 15, 2012
Slide 1: ASX cover letter for investor day presentation
QBE Insurance Group Limited ABN 28 008 485 014 Head Office 82 Pitt Street SYDNEY NSW 2000 For personal use only Australia Postal Address Box 82 GPO SYDNEY 2001 15 October 2012 Telephone: +61 (2) 9375 4444 Facsimile: +61 (2) 9231 6104 DX 10171, Sydney Stock Exchange The Manager Company Announcements
Slide 2: QBE European Operations Investor and Analyst Day Presentation
For personal use only QBE INSURANCE GROUP QBE European Operations Investor and Analyst Day Presentation October 15, 2012 All amounts in GBP unless otherwise stated
Slide 3: Agenda
QBE EO - Agenda For personal use only 10:00 to 11:00 STEVEN BURNS (CHIEF EXECUTIVE OFFICER) RICHARD PRYCE (DEPUTY CHIEF EXECUTIVE OFFICER) Overview of QBE EO business composition and strategy, including market position and current trading environment 11:15 – 12:30 DAVID WINKETT (CHIEF FINANCIAL & OP
Slide 4: Overview
QBE EO Overview For personal use only Steven Burns, Chief Executive Officer, European Operations Richard Pryce, Deputy Chief Executive Officer, European Operations 3 EO Investor Day Presentation – 15/10/12
Slide 5: Executive Management Team
QBE EO – Overview For personal use only Executive Management Team Steven Burns Chief Executive Officer QBE EO Age: 54 Length of Service: 25 years Ash Bathia Colin O’Farrell Jonathan Parry Richard Pryce David Winkett Philip Dodridge Chief Underwriting Officer Chief Underwriting Officer Chief Underwri
Slide 6: What is QBE European Operations?
QBE EO - Overview For personal use only What is QBE European Operations? • Leading specialist insurer and reinsurer writing £3.3bn forecast GWP for 2012 • Writing global, wholesale specialty business emanating from most countries in the world • Significant UK and European retail business providing h
Slide 7: Recent History
QBE EO – Recent History For personal use only Offices Offices Offices established in established in established in Czech Republic Denmark Canada and Offices and Estonia Dubai Offices Offices established in established in established in Italy Germany and Romania, Spain Sweden and Switzerland 2000 200
Slide 8: Market Share
QBE EO – Market Share For personal use only Annualised GWP Share of P&C Markets (Commercial) Western Europe * 0.25% Central & Eastern 1.2% Europe * UK National 5.0% London Market (excl. 6.0% Lloyd's) Lloyd's 6.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% * Includes personal lines 7 EO Investor Day Presenta
Slide 9: Distribution Split
QBE EO – Distribution Split For personal use only 2012 Forecast GWP Distribution Split Central & Eastern Europe 1% Western Europe UK Regional 7% 11% London Company 34% £ 3.3bn Lloyd's 47% Source: H1 2012 unaudited EO management accounts prepared on a UK GAAP basis 8 EO Investor Day Presentation – 15
Slide 10: Product Split
QBE EO – Product Split For personal use only 2012 GWP Breakdown Secura Specialty 6% 2% Casualty - Casualty International 3% 15% Property 7% RI Aviation 18% Casualty - UK & 3% Ireland 11% British Marine 3% PCM £3.3bn 62% MEA 20% Energy & Political 9% Casualty - Professional & Financial Lines 9% Marin
Slide 11: Geographical Split
QBE EO – Geographical Split GWP by Domicile of Assured For personal use only CANADA 5% UK & IRELAND EUROPE (EXCL. UK) 36% 22% ASIA USA 5% 8% MIDDLE EAST & AFRICA 3% LATIN/SOUTH AMERICA 7% OCEANIA 6% WORLDWIDE 9% Source: QBE EO statistics at Q2 2012 10 EO Investor Day Presentation – 15/10/12
Slide 12: Broker Analysis – GWP Source
QBE EO Broker Analysis – GWP Source For personal use only Top 4 Next 10 COGENT 0.8% PFIH 1.0% ARTHUR J GALLAGHER 3.2% JARDINE LLOYD WINDSOR THOMPSON 1.1% 6.6% TYSER AON 1.2% 18.1% WILLIS 9.5% 49.0% 17.5% MILLER R K HARRISON 2.3% 1.3% COOPER GAY 1.4% MARSH 14.8% TOWERGATE 2.2% LOCKTON 1.4% THB 1.6% R
Slide 13: Growth
QBE EO - Growth GWP Development Brit UK Regional For personal use only (£0.07bn) £3.5bn £3.3bn* Secura (£0.20bn) £3.0bn £3.0bn Burnett Energy (£0.02bn) £2.7bn British Marine £2.6bn GWP £bn and MiniBusPlus £2.5bn (£0.13bn) £2.3bn Ensign (£0.23bn) £2.2bn £2.2bn £2.0bn £2.0bn £1.9bn £1.5bn 2004 2005 20
Slide 14: Performance
QBE EO Performance ROE and NCOR Performance For personal use only 40% 110% 35% £3.0bn 105% £2.7bn 30% £2.6bn 100% £2.3bn £2.2bn £2.2bn 25% 95% ROE % £2.0bn NCOR % £1.9bn £1.8bn 20% 90% 15% 85% 10% 80% 5% 75% 0% 70% 2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 ROE Mngt Basis NCOR Published Note: R
Slide 15: Competitor Analysis
QBE EO – Performance Competitor Analysis For personal use only 120 110 100 NCOR % 90 80 70 60 2007 2008 2009 2010 2011 RSA Amlin Lloyds QBE EO Note: RSA and Amlin NCOR's have been adjusted to be on a consistent basis with QBE's reporting methodology 14 EO Investor Day Presentation – 15/10/12
Slide 16: ROE Performance by Portfolio
QBE EO – Performance ROE Performance by Portfolio For personal use only 2008 2009 2010 2011 2012 Property, Casualty & Motor Marine, Energy & Aviation Reinsurance EO TOTAL <0% 0% to 15% 15% to 20% >20% Note: ROE on local management basis on allocated capital Source: QBE EO financial year management a
Slide 17: Market Conditions
QBE EO – Market Conditions QBE Risk Adjusted Rate Change Experience by Division For personal use only 180 160 140 Rate % 120 100 80 60 2004 2005 2006 2007 2008 2009 2010 2011 2012 PCM MEA RI Total 16 EO Investor Day Presentation – 15/10/12
Slide 18: Strengths
QBE EO – Strengths For personal use only • Strong track record of profitable growth • Track record of successful acquisitions and new business initiatives • Stable A+ rating • Proven market leading underwriting expertise and line size/lead capability in all key products • Strong broker relations and
Slide 19: Ten Core Current Priorities
QBE EO – Ten Core Current Priorities For personal use only 1. Change in management structure 2. Focus on disciplined underwriting and high client retention 3. Maintain performance and ongoing portfolio remediation 4. Brit acquisition integration 5. Strategy review for profitable growth in European M
Slide 20: Q&A
QBE EO – Q & A For personal use only Q&A 19 EO Investor Day Presentation – 15/10/12
Slide 21: Structure, Capital and Operations
QBE EO Structure, Capital and Operations For personal use only David Winkett, Chief Financial & Operating Officer 20 EO Investor Day Presentation – 15/10/12
Slide 22: Legal structure
QBE EO Structure, Capital and Operations - Legal structure For personal use only QBE European Operations plc (“EO plc”) Funding, financing & service Insurance Operations companies QBE QBE QBE Re Funding Financing Service Underwriting Insurance (Europe) Ltd companies companies companies Ltd (Europe)
Slide 23: QBE Re (Europe) from October 2012
QBE EO Structure, Capital and Operations - QBE Re (Europe) from 1 October 2012 • For personal use only Established a single, non- Lloyd’s reinsurance platform EO plc for Europe with a capital base of over €500m (US$650m) EO plc QBE Insurance • Effected through a cross- (Europe) Ltd border merger wit
Slide 24: QBE Re (Europe)
QBE EO Structure, Capital and Operations - QBE Re (Europe) For personal use only • Structure: – FSA single lead regulator for all of EO, Solvency II – Mirrors the European passporting, branch approach already used for direct business – Single balance sheet benefits from increased product and geograp
Slide 25: EO capital
QBE EO Structure, Capital and Operations - EO capital For personal use only GROUP Net assets as at 31 December 2011 (adjusted for merger of Secura NV and QBE Reinsurance (Europe) Ltd [Dublin] to form QBE Re (Europe) Ltd) EO plc NA £1.7bn EO’s insurance operations Excess working capital Lloyd’s Europ
Slide 26: EO Capital
QBE EO Structure, Capital and Operations - EO Capital For personal use only Entity Net assets Regulator S&P rating AM Best rating QBE Insurance (Europe) £1,016m FSA A+/stable A (Excellent) QBE Re (Europe) €536m FSA A+/stable A (Excellent) Syndicate 386 (100%) - FSA/Lloyd’s LSA 5/stable n/a Syndicate
Slide 27: Investments
QBE EO Structure, Capital and Operations - Investments • The EO investment portfolio is conservatively positioned: For personal use only – 95% of the portfolio is invested in securities rated A or higher – 99% of the portfolio is invested in cash and fixed income • Short duration maintained (<1 year
Slide 28: Cash flow
QBE EO Structure, Capital and Operations - Cash flow For personal use only • Strong operating cashflows – Routinely declare cash dividends to Group of >50% of reported profit – Excess working capital held at holding company level – Self-funded Brit acquisition and Springboard infrastructure investme
Slide 29: Springboard
QBE EO Structure, Capital and Operations - Springboard Step change in core IT services creating a flexible and scalable operating model For personal use only • Market leading claims capability • Underwriting front end interfaces • Case management and workflow capability • Aligned systems • Customer
Slide 30: Springboard
QBE EO Structure, Capital and Operations - Springboard For personal use only • 2½ year c. £100m programme completed in H1 2012 • Migration of 5m policies and decommissioned 6 legacy systems, representing $36bn GWP • Migration of nearly 4m claims onto a single Claims Management System • Integration o
Slide 31: Structure, Capital and Operations – Q&A
QBE EO Structure, Capital and Operations – Q & A For personal use only Q&A 30 EO Investor Day Presentation – 15/10/12
Slide 32: Risk Management
QBE EO Risk Management For personal use only Phil Dodridge, Chief Risk Officer 31 EO Investor Day Presentation – 15/10/12
Slide 33: Enterprise Risk Management Framework
QBE EO Risk Management – Enterprise Risk Management Framework For personal use only 1. High level risk management framework 2. Large number of linked processes bringing together the 3 lines of defence 3. Risk management is embedded across the business 4. Risk dashboards present throughout our commit
Slide 34: Solvency II
QBE EO Risk Management – Solvency II • For personal use only We consider most of Solvency II to be synonymous with our ERM framework • We are supportive of the principles of Solvency II 1. Linking risk management to capital requirements Assumptions Risk Capital Management Modelling Aggregation 2. Em
Slide 35: Solvency II
QBE EO Risk Management – Solvency II For personal use only • There have and continue to be challenges with uncertainty over timeframes and requirements of Solvency II • QBE EO are seeking internal model approval with FSA and Lloyd’s • QBE EO is working towards implementation at 1/1/2014 • Some of th
Slide 36: Key Risks to P&L
QBE EO Risk Management – Key Risks to P&L For personal use only External Environment Internal Environment Ongoing soft markets in many products Failure to remediate marginal performing business Increasing claims activity (frequency/severity) due to Losses of key staff macro economic issues Dilution
Slide 37: Key Risks to Balance Sheet
QBE EO Risk Management – Key Risks to Balance Sheet For personal use only Risks Examples Impact of external factors on Unforeseen latent claims or unusual claims development, legislative changes, claim reserves impact of emerging risks Exposure management risk Massive natural or man made catastrophe
Slide 38: Business Management Cycle Controls
QBE EO Risk Management – Business Management Cycle Controls For personal use only Vision & Values Strategy Business Plans Financial Plans Limits & Authorities Performance Monitoring & Evaluation 37 EO Investor Day Presentation – 15/10/12
Slide 39: Reserving Controls
QBE EO Risk Management – Reserving Controls For personal use only • With over £6bn of gross claims reserved on our balance sheet, the largest single balance sheet risk for QBE EO is a deterioration of the outstanding claims reserves • Key controls around the level of reserving include: − formalised
Slide 40: Underwriting & Pricing Controls
QBE EO Risk Management – Underwriting & Pricing Controls For personal use only • A core strength of QBE EO is the quality and empowerment of our underwriters. This enables us to deliver superior returns from writing specialist insurance that can involve large, complex and sometimes difficult risks •
Slide 41: Catastrophe Exposure Controls
QBE EO Risk Management – Catastrophe Exposure Controls For personal use only • QBE EO’s international business mix generates exposure to catastrophes from all over the world from US hurricanes to Japanese earthquakes • Detailed data is captured on all key locations • Risk is assessed via − Realistic
Slide 42: Claims Activity and Controls
QBE EO Risk Management – Claims Activity and Controls For personal use only • After many years of stable claims activity, we are now seeing some evidence of an increased trend developing across a number of lines of business, typically driven by the wider economic environment. Examples include: − A s
Slide 43: Risk Management – Q&A
QBE EO Risk Management – Q & A For personal use only Q&A 42 EO Investor Day Presentation – 15/10/12
Slide 44: Lloyd's
Lloyd’s For personal use only Luke Savage, Director, Finance, Risk Management and Operations, Lloyd's 43 EO Investor Day Presentation – 15/10/12
Slide 45: Lloyd's – Agenda
Lloyd’s - Agenda For personal use only • 2012 Interim Results • Overview • Strength and Security • Performance Management & Capital Setting • Solvency II 44 EO Investor Day Presentation – 15/10/12
Slide 46: Lloyd's – 2012 Interim Results
Lloyd’s – 2012 Interim Results Encouraging results to date… For personal use only £m June 2012 June 2011 Dec 2011 Gross written premiums 14,768 13,534 23,477 Combined ratio 88.7% 113.3% 106.8% Investment return1 619 548 955 Result before tax 1,530 (697) (516) Return on capital (pre-tax) 16.4% (8.1%)
Slide 47: Lloyd's – 2012 Interim Results vs peers
Lloyd’s – 2012 Interim Results …and favourable performance compared to our peers For personal use only Sources: i) Insurance Information Institute estimate, ii) Reinsurance Association of America, iii) Company data (8 European companies; 18 Bermudian companies) 46 EO Investor Day Presentation – 15/1
Slide 48: Lloyd's is a market, not a company
Lloyds – Overview Lloyd’s is a market, not a company… For personal use only CORPORATION OF LLOYD’S POLICYHOLDERS Members Managing agents Brokers Corporate Coverholders Syndicates Non-corporate Service companies (via Members’ agents) THE MARKET Business FLOW CAPITAL FLOW 47 EO Investor Day Prese
Slide 49: Diverse book approaching £25bn of GWP
Lloyds – Overview …collectively writing a diverse book approaching £25bn of GWP For personal use only Class of business split Geographical split Aviation Motor 3% 5% Rest of the World 5% Energy Central Asia and 7% Reinsurance Asia Pacific 38% 12% US and Canada 41% Marine 8% Europe 16% Casualty 18% U
Slide 50: Diverse capital base
Lloyds – Overview It benefits from a diverse capital base… For personal use only Source: Lloyd’s 2011 Annual Report 49 EO Investor Day Presentation – 15/10/12
Slide 51: Record resources at member and central level
Lloyds – Overview … with record resources both at member level and centrally For personal use only Balance Sheet (£m) Solvency (£m) 20,055 19,121 19,121 19,114 15,264 50 EO Investor Day Presentation – 15/10/12
Slide 52: Access to Lloyd's is highly attractive
Lloyds – Strength and Security Access to Lloyd’s is highly attractive For personal use only • Turn key access to a global licence network that enables a syndicate to write business in over 200 countries and territories on a subscription basis • The ability to use the Lloyd’s brand – the most recogni
Slide 53: Strong and flexible capital structure
Lloyds – Strength and Security A strong and flexible capital structure… For personal use only Syndicate Level Assets £41,311m 52 EO Investor Day Presentation – 15/10/12
Slide 54: Lloyd's Market ratings
Lloyds – Strength and Security …is reflected in the Lloyd’s Market ratings For personal use only 53 EO Investor Day Presentation – 15/10/12
Slide 55: Performance Management Framework and Capital Setting
Lloyds – Performance Management Framework and Capital Setting Comprehensive risk management framework ensures that capital strength is not threatened… For personal use only • Each Lloyd’s business is responsible for its own risk management • The Society of Lloyd’s has established a framework that is
Slide 56: Tools to manage key risks
Lloyds – Performance Management Framework and Capital Setting …with a number of tools to manage key risks for the market today For personal use only 55 EO Investor Day Presentation – 15/10/12
Slide 57: Underwriting Guidelines
Lloyds – Performance Management Framework and Capital Setting Underwriting Guidelines focus on profitability and reduced volatility For personal use only Guidelines include: Gross underwriting Result by lines of business profit on each line Maximum gross line size 10% of syndicate capacity Minimum p
Slide 58: Lloyd's Realistic Disaster Scenarios
Lloyds – Performance Management Framework and Capital Setting Lloyd’s Realistic Disaster Scenarios … For personal use only Generic (de minimis) Scenarios Specific event-based Compulsory Scenarios (primarily utilised to monitor (primarily utilised to monitor Industry loss syndicate-level exposures) M
Slide 59: Exceedance Probability curves
Lloyds – Performance Management Framework and Capital Setting … and Exceedance Probability curves provide a powerful facet to risk management For personal use only • Exceedance Probability (EP) curves help (re)insurers to better understand the probability of exceeding a loss amount on a single (OEP)
Slide 60: Solvency II Update: Successful implementation
Lloyds – Solvency II Update Successful implementation at Lloyd’s… For personal use only Lloyd’s internal model …requires the Corporation and 55 separate businesses to be simultaneously prepared… 59 EO Investor Day Presentation – 15/10/12
Slide 61: Lloyd's amongst the most prepared in Europe
Lloyds – Solvency II Update For personal use only … and Lloyd’s is amongst the most prepared in Europe • Lloyd’s submitted its Internal Model Application to the FSA on 27 July • Most of Lloyd’s work on Solvency II is now complete and has moved into business as usual • Lloyd’s will continue to work w
Slide 62: Aggregate capital levels under Solvency II
Lloyds – Solvency II Update We do not expect aggregate capital levels at Lloyd’s to change under Solvency II… For personal use only Now Solvency II Uplift and Central Assets Total 1:200 asset stack Ultimate Risk ICA SCR (one year risk) Adjust for premium debtors moving to TPs UK GAAP Solvency II Tec
Slide 63: Benefits from Solvency II work
Lloyds – Solvency II Update …and we are seeing benefits from our work… For personal use only • Better exposure management • Better capital modelling • Clearer governance structures • Clearer articulation of risk appetite • A more holistic approach to thinking about risk and capital …in the Corporati
Slide 64: Lloyd's – Q&A
Lloyd’s – Q & A For personal use only Q&A 63 EO Investor Day Presentation – 15/10/12
Slide 65: Property, Casualty & Motor Division
Property, Casualty & Motor Division For personal use only Ash Bathia, Chief Underwriting Officer, Property, Casualty & Motor 64 EO Investor Day Presentation – 15/10/12
Slide 66: Property, Casualty & Motor – Product Split
Property, Casualty & Motor – Product Split 2012 Forecast GWP Breakdown For personal use only Motor 15% International 24% Motor 15% UK & Europe 11% Property £2.0bn Casualty 59% 26% London Market/Lloyd's 16% UK & Ireland 17% Credit Lines 2% Professional & Financial Lines 15% Source: H1 2012 unaudited
Slide 67: Property, Casualty & Motor – Performance
Property, Casualty & Motor – Performance For personal use only ROE Performance by Portfolio 2008 2009 2010 2011 2012 Casualty - International Casualty - UK & Ireland Casualty - Professional & Financial Lines Property - London Market/Lloyd's Property - UK & Europe Motor Credit Lines PCM TOTAL Note: R
Slide 68: Property, Casualty & Motor – Market Conditions
Property, Casualty & Motor – Market Conditions For personal use only QBE Risk Adjusted Rate Change Experience by Portfolio 120 110 100 Rate % 90 80 70 60 2004 2005 2006 2007 2008 2009 2010 2011 2012 Casualty Property Motor PCM Total 67 EO Investor Day Presentation – 15/10/12
Slide 69: Property, Casualty & Motor – Strengths
Property, Casualty & Motor – Strengths For personal use only In the face of challenging market conditions, state of the economy and investment environment, we have: • A strong and stable Executive Team • Quality, experience and depth of key underwriting talent • Size, scale and historical profitabil
Slide 70: Property, Casualty & Motor – Core Priorities
Property, Casualty & Motor – Core Priorities For personal use only 1. Ruthless remediation of under performing segments of the business 2. Delivering the full potential of Brit Integration for UK National business 3. Implement and execute European Market strategy 4. Ramp up Dubai and Canadian franch
Slide 71: Property, Casualty & Motor – UK National
Property, Casualty & Motor – UK National 2012 Forecast GWP For personal use only Product Split Branch Split STAFFORD BIRMINGHAM 15.0% 12.7% READING 0.7% PROPERTY 20.0% LEEDS LONDON 13.6% NATIONAL 12.2% £0.37bn CASUALTY £0.37bn 53.3% MOTOR 26.7% GLASGOW 11.4% MANCHESTER 14.9% DUBLIN BELFAST 4.9% 0.3%
Slide 72: Property, Casualty & Motor – UK National
Property, Casualty & Motor – UK National For personal use only • Successful integration of Brit regional business − Retention of key staff − Renewal of profitable business − New regional structure and Executive team − Significant synergies and cost efficiencies • Diversify business mix to include “C
Slide 73: Property, Casualty & Motor – European Markets
Property, Casualty & Motor – European Markets 2012 Forecast GWP For personal use only Product Split Branch Split SLOVAKIA ROMANIA 6.8% 0.5% AVIATION 4.6% ITALY 15.7% PROPERTY 27.0% NORWAY £0.25bn 1.0% £0.25bn FRANCE 51.6% HUNGARY CASUALTY 6.7% MOTOR 52.6% 15.3% ESTONIA 0.3% MARINE & ENERGY 0.5% GERM
Slide 74: Property, Casualty & Motor – European Markets
Property, Casualty & Motor – European Markets For personal use only • Pursuit of initial plans to grow to €750m in 5 years put on hold due to: − Poor pricing and performance, particularly property and motor sectors − Eurozone crisis and credit crunch impact − Lack of attractive acquisition opportuni
Slide 75: Property, Casualty & Motor – Q&A
Property, Casualty & Motor – Q & A For personal use only Q&A 74 EO Investor Day Presentation – 15/10/12
Slide 76: Marine, Energy & Aviation Division
Marine, Energy & Aviation Division For personal use only Colin O’Farrell, Chief Underwriting Officer, Marine Energy & Aviation 75 EO Investor Day Presentation – 15/10/12
Slide 77: Marine, Energy & Aviation – Product Split
Marine, Energy & Aviation – Product Split For personal use only 2012 Forecast GWP Breakdown Aviation 16% Marine 26% British Marine Marine 15% & £0.7bn Energy 69% Energy & Political 43% Source: H1 2012 unaudited EO management accounts prepared on a UK GAAP basis 76 EO Investor Day Presentation – 15/1
Slide 78: Marine, Energy & Aviation – Performance
Marine, Energy & Aviation – Performance ROE Performance by Portfolio For personal use only 2008 2009 2010 2011 2012 Marine Energy & Political British Marine Aviation MEA TOTAL <0% 0% to 15% 15% to 20% >20% Note: ROE on local management basis on allocated capital Source: QBE EO financial year managem
Slide 79: Marine, Energy & Aviation – Market Conditions
Marine, Energy & Aviation – Market Conditions For personal use only QBE Risk Adjusted Rate Change Experience by Portfolio 220 200 180 160 Rate % 140 120 100 80 60 2004 2005 2006 2007 2008 2009 2010 2011 2012 Aviation Marine (incl. Energy Liability) Energy MEA Total 78 EO Investor Day Presentation –
Slide 80: Marine, Energy & Aviation – Strengths
Marine, Energy & Aviation – Strengths For personal use only • Significant competitive advantage in all business lines, characterised by our position as a leading subscription and specialty market carrier • Experienced and highly regarded individuals with strong underwriting discipline and expertise
Slide 81: Marine, Energy & Aviation – Core Priorities
Marine, Energy & Aviation – Core Priorities For personal use only • Protect and maintain the integrity of our highly profitable core portfolios of business • Demanding market conditions requires underwriting discipline to be robustly maintained • Ensure poor performing remediation strategies are not
Slide 82: Marine, Energy & Aviation – Q&A
Marine, Energy & Aviation – Q & A For personal use only Q&A 81 EO Investor Day Presentation – 15/10/12
Slide 83: Reinsurance Division
Reinsurance Division For personal use only Jonathan Parry, Chief Underwriting Officer, Reinsurance 82 EO Investor Day Presentation – 15/10/12
Slide 84: Reinsurance – Product Split
Reinsurance – Product Split For personal use only 2012 Forecast GWP Breakdown Secura 35% Property 39% £0.6bn RI 65% Specialty 10% Casualty 16% Source: H1 2012 unaudited EO management accounts prepared on a UK GAAP basis 83 EO Investor Day Presentation – 15/10/12
Slide 85: Reinsurance – Performance
Reinsurance – Performance ROE Performance by Portfolio For personal use only 2008 2009 2010 2011 2012 Reinsurance - Property Reinsurance - Casualty Reinsurance - Specialty Secura RI TOTAL <0% 0% to 15% 15% to 20% >20% Note: ROE on local management basis on allocated capital Source: QBE EO financial
Slide 86: Reinsurance – Market Conditions
Reinsurance – Market Conditions For personal use only QBE Risk Adjusted Rate Change Experience by Portfolio 200 180 160 140 Rate % 120 100 80 60 2004 2005 2006 2007 2008 2009 2010 2011 2012 Reinsurance Secura RI Total 85 EO Investor Day Presentation – 15/10/12
Slide 87: Reinsurance – Strengths
Reinsurance – Strengths For personal use only • High-margin business with controlled aggregates and limited downside • Manage volatility through writing a diverse portfolio across territories and products • Respected market leader with long term client relationships • Experienced underwriting and ma
Slide 88: Reinsurance – Core Priorities
Reinsurance – Core Priorities For personal use only • Formation in 2012 of Global Reinsurance Division − Consistency in approach − Stability and strength − Flexibility for portfolio management − QBE Re brand to differentiate from direct operations • Establishment of QBE Re (Europe) − QBE Re (Europe)
Slide 89: Reinsurance – Q&A
Reinsurance – Q & A For personal use only Q&A 88 EO Investor Day Presentation – 15/10/12
Slide 90: Steven Burns and Richard Pryce wrap-up
QBE EO For personal use only Steven Burns, Chief Executive Officer, European Operations Richard Pryce, Deputy Chief Executive Officer, European Operations 89 EO Investor Day Presentation – 15/10/12
Slide 91: Key Themes from the Day
QBE EO – Key Themes from the Day For personal use only • Track record of strong profit and growth maintained despite soft market • Very competitive markets continue to prevail for most insurance product lines with no material upturn expected in 2013 • Focus on disciplined underwriting, client retent
Slide 92: Closing Q&A
QBE EO – Closing Q&A For personal use only Q&A 91 EO Investor Day Presentation – 15/10/12
Slide 93: Important Disclaimer
Important Disclaimer For personal use only This presentation should be read in conjunction with all information which QBE has lodged with the Australian Securities Exchange (“ASX”), including QBE’s half year results lodged with the ASX on August 17, 2012. Copies of those lodgements are available fro
Slide 94: QBE Insurance Group – www.qbe.com
For personal use only QBE INSURANCE GROUP www.qbe.com EO Investor Day Presentation – 15/10/12 93