2017 most costly year for insurance

2017 most costly year for insurance

QBE Insurance has warned that 2017 could be the ‘costliest year in history’ for the global insurance industry after the damage caused by hurricanes in the last few months. Speaking at the Australian Stock Exchange, John Neal, QBE’s chief executive, told shareholders to brace for a multi-million dollar hit in his company’s pre-tax profits due to events such as Cyclone Debbie in Australia, Hurricanes Harvey, Irma and Maria, and recent earthquakes in Mexico.

Neal said that QBE had been forced to increase its allowance for large individual risk and catastrophe claims to $1.75 billion, meaning pre-tax profits for the company came in at $600 million.

“Given catastrophe losses to date, 2017 will likely prove to be the costliest year in the history of the global insurance industry,” Neal said.

According to Neal, QBE had pushed its target for its combined underwriting ratio to between 100 per cent and 102 per cent, meaning it could be looking at a two-per-cent loss on its top line at underwriting level.