QBE has announced a statutory net loss after tax of US$1.517 billion and an adjusted net cash loss after tax of US$863 million for the year ended 31 December 2020. In light of the poor results, no final dividend was declared.
The group said the financial result includes a disappointing underwriting result, a significant reduction in investment income, impairment of goodwill and deferred tax assets in North America, and charges related to the rationalisation of legacy IT.
According to QBE, group-wide premium renewal rate increases averaged 9.8 per cent compared with 6.3 per cent in 2019. Premium rate momentum accelerated through the year in its International and North America regions, while momentum in its Australia Pacific region recovered in the fourth quarter as pandemic-related pricing relief initiatives ended. Group-wide renewal rate increases averaged 11.3 per cent during the second half of 2020 and 12.6 per cent in the fourth quarter.
QBE said gross written premiums grew by 10 per cent to US$14.643 billion , reflecting premium rate momentum, improved premium retention across all divisions, and strong new business growth, particularly in the North America and International regions.
The group reported a combined operating ratio (premiums received versus claims paid) of 104.2 per cent compared with 97.5 per cent in 2019, reflecting COVID-19 impacts, adverse prior accident year claims development, and elevated catastrophe claims. Excluding US$655 million from COVID-19 impacts, the adjusted combined operating ratio was 98.6 per cent, up from 97.5 per cent in 2019.
QBE said its three-year operational efficiency programme, targeting a US$130 million net reduction in costs by the end of 2021, has progressed ahead of plan. The next phase of the programme is focused on IT modernisation.
“While obviously very disappointed with the headline loss, premium momentum accelerated across 2020 and has continued into 2021,” said Richard Pryce, interim QBE Group CEO. “Coupled with the improved positioning of the underlying business, we enter this year with confidence and optimism.
“I look forward to leading the business in 2021. My primary focus remains performance improvement, including that the group takes full advantage of currently favourable market conditions by maximising premium rate increases while driving targeted growth in portfolios and regions offering the most profitable new business opportunities.”