Qbe Insurance Group Limited · ASX:QBE
Qbe Insurance — Investor Presentation (September 2005)
21 slides from Qbe Insurance's investor presentation, Sep 28, 2005
Slide 1: Investor Presentation cover letter to ASX
Insurance Group 28 September 2005 The Manager Company Announcements Australian Stock Exchange Limited Level 6 Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Sir, re: Investor Presentation Please see attached an investor presentation for release to the market. Yours faithfully Duncan Ramsay Co
Slide 2: QBE Insurance Group presentation
jronscwaresaat ih tat, emcee _QBE INSURANCE GROUP _ Presenter: Neil Drabsch,
Slide 3: Company overview
“companies or individuals - Company overview QBE is.an Australian-based general insurance and reinsurance group and one of the world’s 25 largest insurers and reinsurers as measured by net written premium _ Established in 1886 — Listed.on. ASX as QBE in 1973 following merger of three related compani
Slide 4: Company overview: growth and insurance margin
Ey Quy ss Company overview Growth and insurance margin cere aan =: Gross written es ~ Insurance “Insurance Total > premium COR. profit :ratio profit - investments ASM © % % ASM ASM 1995: 1,336 100.4. B80 BB 2,045 1996 1561 99:3 84 10l-2,694- A99T 2,054 99.5 “72 116 3,105 1998. 2,409 100.3 77 AT ~ 3,
Slide 5: History of growth
~ History of growth full year to 31 December 2004 Gross written and net earned premium Compound average growth rates over. last 12 years: - gross. written.premium 21.7% . ASM _ -- net earned premium 20.1% — : 10,000 7 — OO ] Brojected 2005 8,000 GWP-AS9.5 Bn - NEP A$7.5 Bn 4994 —«1996.~=—«1998-~=« 0
Slide 6: QBE's underlying business strategy
« .QBE’s underlying business strategy is to maintain “operations in the key global insurance markets and to be a’ lead underwriter for selected lines of business setting | rates” and conditions i in the markets in which it operates - +. QBE’s strategy of diversification, by product and ~ ~~ geograph
Slide 7: Recap half year results to June 2005
Recap half year results to 30 June 2005 “Record operating profit of A$491 million up. 43% ; “Lowest COR in past 30 years - 90.3% (2004: 90.5%) Record insurance profit margin - 15.8% (2004:13.6%) Gross and net earned premium.up 9% and 13% respectively (despite higher AS) Prudential margins in outstan
Slide 8: Worldwide operations
Worldwide operations Ret prott belore. xt ene * er 3%. Not restated for AIFRS HALF YEAR > FULL YEAR : ce Dec Dec 2004 2003*** Grose writen cremaany OM i 6558 Gross eared premium $M 8,571. 7,816 Net eared premium $M. 6,781. 6,036 Claims. ratio. % - 0 61.3. 63.3 Commission ratio% 17.5 “18.2 Expense ra
Slide 9: Worldwide portfolio mix
‘Worldwide portfolio mix gross earned premium ~~ halt year ended 30 june. 2005. Workers’ compensation 9% (11%) Professional indemnity . . ; . 9% (9%) Financial and credit ~ on 2% (3%) Marine and aviation": ve 6% (6%). Liability 23% (19%) : : Property 29% (32%) Other .¥ 1% (2%) “Motor and motor. casu
Slide 10: Worldwide operations
Worldwide operations half year ended 30. June 2005 ~ : ae Insurance ; Net profit after GWP* —-Growth “Cor profitmargin || tax and ren me vm ee minorities - 2005-2005 | 20052004 | 2005 “2004 2005... 2004 >> ; $M Yo % % $M SM Australia 1,255.32 89.3.--89.3-.| 18.1 14.9. 138.9013 Pacific Asia Central E
Slide 11: Net invested funds
: Net invested funds 30 June 2005 = 31. Dec 2004 $M % $M % Cash and cash equivalents 1,492 9B 1121 TB Short term money. 05,362 000 34.10 6,482. 36.6 Fixed interest securities and other. SNF AQ2 ATT «9 6,957-- 46.5 Equities = tg 8.5 1,383 9.2 Property 31 0.20" 32-0 0.2 Total financial assets and cash
Slide 12: Acquisitions
Acquisitions “half year ended 30 June 2005 os oe Acquisitions made: since January 2005 were: & = Greenhill underwriting agency in Western Europe: «75 million gross “~premium ; - Central de Seguros i in Colombia: US$60 million gross premium -.- National Farmers Union Property and Casualty company in
Slide 13: Market conditions
Market conditions | 4 years of cumulative premium rate increases for most commercial lines of business . Significant gains onterms and conditions across all portfolios — e.g. higher deductibles are being retained More competition emerging, y, particularly for larger risks - however not irrational ;
Slide 14: Managing exposure to catastrophes
| Managing exposure to catastrophes + QBE considers information from a wide range of exposure monitoring processes: = Catastrophe modelling software, such as Risk Management Solutions (RMS) model output. mo = Probable Maximum Loss (PML) and Maximum Event Retention (MER) analysis - = Realistic Disast
Slide 15: Realistic disaster scenarios (RDS) reporting process
focus to — Realistic disaster scenarios (RDS) ‘Teporting process aan RDS reporting forms an integral part of Lloyd’s catastrophe oe and large loss exposure monitoring processes ~~ QBE has adopted RDS reporting as best- -practice across the whole Group for. r monitoring exposures to.extreme events ;
Slide 16: Managing exposure to catastrophes: US windstorm scenarios
_ Managing exposure to catastrophes — ~ Realistic disaster scenario US windstorms The following table sets out industry loss scenarios that we apply as.a.base for purchasing reinsurance protection. Estimated WE pM Es ~ industry loss : RDS event. ane US$Bn oo Florida WS. —Miami.> > ee TQ Florida WS.
Slide 17: Lloyd's realistic disaster scenario
| _ Managing exposure to catastrophes : ‘Lloyd's realistic disaster scenario Gulf of Mexico windstorm assumes a us$60 billion insured “loss; US$10 billion offshore energy; US$50 billion mainland property loss -
Slide 18: 2004 US hurricanes
Managing exposure to catastrophes | 7 2004 US hurricanes: 2B ape; fame fm Ce us : Market loss "_ US$B . Awan ~ Charley 0 8 Jeanne. 4 Frances >.>. 5; -QBE loss US$M Gross >. 510 “Net 475
Slide 19: 2005 outlook
2005 outlook : Subject to no material movement in current exchange rates; large losses and catastrophes not.exceeding the allowance.in our. os business plans; and no.major fall in equity. markets orinterestrates:. * Target range for insurance profit margin upgraded to 15% -16% ae through 2005 from t
Slide 20: 2006 outlook
2006 outlook +: Premium rate expectations and the strength of our insurance liabilities “give us confidence for continuation ofa strong level of | insurance profitability... : + Premium growth will be mainly driven by “acquisitions” made in 2005, although effect of Katrina and Rita likely.to create
Slide 21: Historical share price performance
Historical share | _ price performance ‘An investment in QBE has outperformed the Australian All Ordinaries Index - “and inflation with a compound average annual growth rate of 17. 3% over. as) years, 21.1% over 10 years and 22.2% over 20 years: : www QBE Share Price Performance —QBE Share Price Per
QBE Insurance Group — Investor Presentation (September 2005) on 6ix