AM Best affirms the credit ratings of key subsidiaries of QBE Insurance Group Limited

LONDON–(COMMERCIAL WIRE)–I am better has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) of QBE Europe SA/NV (Belgium), QBE UK Limited (United States Kingdom) and the grouped members of QBE North America Insurance Group (see list below). The outlook for the FSR is stable, while the outlook for the Long-Term ICR is negative. These companies are key operating subsidiaries of QBE Insurance Group Limited (QBE) (Australia), the non-operating holding company of the QBE group of companies.

These Credit Ratings (ratings) reflect the strength of QBE’s consolidated balance sheet, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and adequate management of business risk.

The long-term ICR’s negative outlook reflects pressure on QBE’s strong operating performance assessment following weaker-than-expected results in recent years, including technical losses and a significant deterioration in goodwill in 2020. The group is executing actions to strengthen earnings and has demonstrated underlying performance improvements in recent periods and a return to technical profitability in 2021. However, if these performance improvements prove unsustainable, a negative rating action on the ICR is likely. long term. The FSR’s outlook is stable.

The group’s strong operating performance assessment reflects a history of strong technical performance, supported by a diverse earnings profile. However, comparatively weaker underwriting performance in several recent years has affected QBE’s five-year (2017-2021) and 10-year (2012-2021) weighted average combined ratios of 99.6% and 97.8%, respectively (as calculated). by AM Best and including the impact of changes in risk-free rates). QBE reported an improved combined ratio of 91.5% in 2021 (93.7% excluding the impact of changes in risk-free rates), comparing positively with long-term averages and recent performance.

QBE’s balance sheet strength assessment is supported by consolidated risk-adjusted capitalization at a very strong level as of end-2021, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s risk-adjusted capitalization was resilient to adverse underwriting and investment impacts stemming from the COVID-19 pandemic in 2020, although it deteriorated in 2021 due to increased underwriting risk due to significant portfolio growth achieved in 2020. anus. QBE’s balance sheet strength assessment is also supported by the group’s conservative and liquid investment portfolio and strong financial flexibility. The group employs a prudent reserve approach, with a significant reserve margin maintained above the central estimate. However, a partially offsetting factor is the further adverse development of the core estimate seen during 2021 (excluding COVID-19 related releases), largely driven by the deterioration of the group’s operations in North America.

QBE’s favorable business profile assessment reflects its excellent geographic diversification and strong competitive positions in its core markets, with an established focus on commercial lines insurance.

The FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) have been confirmed for the following grouped members of QBE North America Insurance Group:

  • Wisconsin General Accident Company

  • General accident insurance company

  • NAU country insurance company

  • North Pointe Insurance Company

  • Praetorian Insurance Company

  • QBE Insurance Corporation

  • QBE Reinsurance Corporation

  • QBE specialized insurance company

  • governing insurance company

  • Southern Pilot Insurance Company

  • Stonington Insurance Company

This news release relates to credit ratings that have been posted on the AM Best website. For full rating information related to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please refer to the Recent Rating Activity web page. AM Best. For additional information on the use and limitations of credit rating opinions, see Best’s Guide to Credit Ratings. For information on the proper use of Best’s credit ratings, Best’s performance reviews, Best’s preliminary credit reviews, and AM Best’s press releases, see the Guide to the Proper Use of Best’s Ratings and Reviews. .

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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