QBE Insurance

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QBE Insurance Group Limited
TypePublic
ASX: QBE
IndustryInsurance
FoundedJanuary 1886; 136 years ago (1886-01)
Headquarters388 George Street
Sydney, New South Wales, Australia
Key people
Mike Wilkins (Chairman)[1]
Andrew Horton (Group CEO)
ProductsGeneral insurance and reinsurance services
RevenueDecrease US$ 11.951 billion (2018)[2]
Decrease US$ -1,511 million (2020)[2]
Total assetsIncrease US$ 46.624 billion (2020)[2]
Total equityIncrease US$ 8.492 billion (2020)[2]
Number of employees
11,700 (2020)[3]

QBE Insurance Group Limited is a general insurance and reinsurance company listed on the Australian Securities Exchange (ASX) and headquartered in Sydney. The company employs more than 11,700 people in over 27 countries.[3]

Across its operations, QBE offers commercial, personal and specialty products and risk management products.

History[]

Originally called the North Queensland Insurance Co, QBE was founded in 1886 in Townsville, in northern Queensland by two Scottish migrants, James Burns], founders of shipping company Burns Philp and Company.[4]

QBE was listed on the Australian Stock Exchange in 1973 from the merger of three companies whose names represent the letters of the combined company, Queensland Insurance, Bankers' and Traders' Insurance Company, and Equitable Life and General Insurance Co., and its founding chairman was J.D.O. Burns.[5][6]

Since then, QBE has continued to acquire many companies. For example, in February 2007, it acquired Mexican insurer Seguros Cumbre SA de CV, whose net tangible assets were estimated at $26 million, and American insurer General Casualty Insurance.[7] In 2011, QBE purchased Balboa Insurance of California from the Bank of America.[8][9][10][11]

QBE Insurance is also known for its sponsorship of sports teams, including the Sydney Swans of the Australian Football League, the Sydney Roosters of the National Rugby League, the NSW Swifts of netball's trans-Tasman ANZ Championship, the Perth Glory of the A-League and provincial New Zealand Rugby team, North Harbour. QBE is the official insurance partner of England Rugby and the Argentine Rugby Union.

Richard Pryce is currently the Interim Group CEO,[12] with QBE announcing Andrew Horton will assume the role of Group CEO, commencing September 2021.[13]

Previous Group CEOs of QBE include Pat Regan (2014–2018) and John Neal (2012–2017). Frank O’Halloran, who worked for QBE for more than 35 years, was Group CEO from 1998 to 2012. Prior to this O’Halloran was Director of Operations from 1994 to 1997, Director of Finance from 1987 to 1994 and Chief Financial Officer from 1982 to 1987.

In April 2020, QBE Insurance group appointed Jason Harris as CEO, International, succeeding Richard Pryce who is currently Interim Group CEO and is set to retire at the end of 2021.[14]

Organisational Structure[]

The organisational structure of QBE Insurance Group is composed of three geographic-based operating divisions, a captive reinsurer (Equator Re) headquartered in Bermuda, an offshore service centre in the Philippines, and various corporate functions located in the Group Head Office in Sydney, Australia.[2]

North America[]

Headquartered in New York, with offices throughout the United States, North America's insurance portfolio consists of four major divisions:[15]

  • Specialty & Commercial
  • Alternative Markets
  • Crop
  • Reinsurance

International[]

Headquartered in London, the International division consists of the organisation's European Operations and Asian Operations (Hong Kong, Singapore, Vietnam, and Malaysia).[2] The international division is a leading commercial property, specialty, and multi-national insurance provider with global underwriting capabilities and a major presence in the Lloyds syndicates market.[16]

Australia Pacific[]

Headquartered in Sydney, the Australia Pacific division consists of operations in Australia, New Zealand, Papua New Guinea, and various pacific islands. QBE's joint venture in India, QBE Raheja, is also included in the Australia Pacific division for reporting purposes. The Australia Pacific portfolio provides offerings for personal, commercial, specialty and lender's mortgage (LMI) insurance lines.[2]

Equator Re[]

Based in Bermuda, Equator Re is QBE’s captive reinsurer and provides reinsurance protection to the divisions in conjunction with the Group’s external reinsurance programs.[2]

Force-placed insurance controversy[]

Maintaining a property insurance policy is one of the most common conditions imposed upon anyone who borrows money to purchase a house.[17] If a borrower allows such a policy to lapse, US lenders will purchase force-placed insurance for the property owner (also called lender-placed insurance, or collateral protection insurance)[18] The use of force-placed insurance by lenders is an ongoing practice that, in the wake of the financial crisis, has become increasingly common,[19][20][21] being cited by many experts as the cause of foreclosures themselves.[22] The coverage prevents gaps in insurance, which is required by the terms of most mortgages. The financial industry justifies higher premium costs of force-placed insurance policies because of the heightened insurance risk of borrowers who aren’t paying for their own insurance.[23] Opponents of the product consistently provide statistics in opposition to these statements,[24][25] citing kickback payouts and loss ratios that are much lower than the rest of the insurance industry.[26]

Force-placed insurance policies fell under regulatory scrutiny when the New York State Department of Financial Services (DFS) launched an investigation into the lender-placed insurance industry that has so far led to settlements with QBE and Assurant[23][27][28] Although testimony in these hearings discussed "reverse competition" and kickbacks from Assurant to its banking clients,[29][30] In response to the settlement, DFS Superintendent Benjamin Lawsky stated, "Prices should not be pushing up and up, pushing borrowers over the foreclosure cliff."[31]

In January 2013, the Consumer Financial Protection Bureau issued new mortgage servicing rules that ensures borrowers are warned in advance of force-placed insurance's cost and prevent banks from force-placing policies on many escrowed loans. “All consumers will receive protections before a servicer may impose a charge for a force-placed insurance,” an agency spokeswoman wrote.[32] In October 2012, QBE and California agreed to a rate reduction for lender-placed insurance, with an average savings to policyholders of $577 annually.[33]

The Federal Housing Finance Agency, which oversees Fannie Mae, Freddie Mac, and the federal home loan banks, has looked into the relationships between force-placed insurers and their clients,[34] determining the relationships to be fraudulent and banning any future service kickbacks.[35] In addition, the Florida Office of Insurance Regulation is looking into the practice.[36]

References[]

  1. ^ "QBE Insurance Group Ltd". Brisbane Times. Fairfax Media. 31 March 2014. Retrieved 9 April 2014.
  2. ^ a b c d e f g h QBE, QBE (19 February 2021). "QBE Annual Report 2020" (PDF).{{cite web}}: CS1 maint: url-status (link)
  3. ^ a b QBE, QBE (19 February 2021). "QBE Sustainability Report 2020" (PDF).{{cite web}}: CS1 maint: url-status (link)
  4. ^ Gunn, John (1925). Taking risks: QBE 1886-1994. Sydney: Allen & Unwin 1995.
  5. ^ "QBE set to buy some growth". Australian Financial Review. 5 April 2004. Retrieved 22 September 2020.
  6. ^ "Dynamo excelled in insurance, sport". The Sydney Morning Herald. 16 December 2012. Retrieved 22 September 2020.
  7. ^ Newman, Judy (5 January 2007). "General Casualty to be sold". The Wisconsin State Journal, Madison.com. Archived from the original on 7 January 2007. Retrieved 5 January 2007.
  8. ^ Rumpler, John. "CEO". Property Casualty 360. Retrieved 15 March 2013.
  9. ^ Calbreth, Dean. "Writer". San Diego Union Tribune. Retrieved 15 March 2013.
  10. ^ "AM Best". Retrieved 15 March 2013.
  11. ^ "Bank of America Newsroom". Archived from the original on 4 August 2016. Retrieved 6 May 2016.
  12. ^ "QBE finds interim replacement for Pat Regan". Australian Financial Review. 22 October 2020. Retrieved 3 March 2021.
  13. ^ "QBE woos another Brit for CEO spot, with hefty sign-on fee". Australian Financial Review. 3 March 2021. Retrieved 3 March 2021.
  14. ^ Wallace, Mia. "Jason Harris appointed as CEO, International at QBE". www.insurancebusinessmag.com. Retrieved 9 April 2020.
  15. ^ "About QBE | QBE US". www.qbe.com. Retrieved 13 November 2021.
  16. ^ QBE, QBE European Operations. "At a glance 2020". Retrieved 14 November 2021.{{cite web}}: CS1 maint: url-status (link)
  17. ^ Wyatt, Edward (26 March 2013). "Regulators Review Costs of Force-Placed Insurance". The New York Times.
  18. ^ "Force-Placed Insurance: What You Need To Know". Dfs.ny.gov. Retrieved 30 April 2014.
  19. ^ "Housing regulator targets costly 'forced' insurance practices". TheHill. 26 March 2013. Retrieved 30 April 2014.
  20. ^ Zibel, Alan; Scism, Leslie (26 March 2013). "U.S. Cracks Down on 'Forced' Insurance". The Wall Street Journal.
  21. ^ "Approach to Certain Lender Placed Insurance Practices" (PDF). Federal Register. Federal Housing Finance Agency. 78 (61). 29 March 2013. Archived from the original (PDF) on 1 April 2013. Retrieved 10 November 2013.
  22. ^ "Look Who's Pushing Homeowners Off the Foreclosure Cliff". Bloomberg.
  23. ^ a b Pandey, Ashutosh; Berkowitz, Ben (21 March 2013). "New York regulators, Assurant settle over 'force-placed' insurance". Thomson Reuters. Archived from the original on 11 April 2013.
  24. ^ New York State Department of Financial Services Force-Placed Insurance Public Hearings (PDF), May 2012, retrieved 15 May 2013
  25. ^ "Lender-Placed Insurance Programs Argue Validity", NBC, May 2013, retrieved 15 May 2013
  26. ^ citing kickback payouts and loss ratios that are much lower than the rest of the insurance industry
  27. ^ "Press Release - March 21, 2013: Cuomo Administration Settles With Country's Largest Force-Placed Insurer, Leading Nationwide Reform Effort And Saving Homeowners, Taxpayers, And Investors Millions Of Dollars". Dfs.ny.gov. Retrieved 30 April 2014.
  28. ^ "Cuomo Administration Settles With Country's Second Largest 'Force-Placed' Insurer, Leading Nationwide Reform Effort and Saving Millions for Homeowners and Investors | Governor Andrew M. Cuomo". Governor.ny.gov. 18 April 2013. Retrieved 30 April 2014.
  29. ^ "Reforming Force-Placed Insurance" (PDF) (Press release). New York Department of Financial Services. 5 April 2013. Retrieved 15 May 2013.
  30. ^ (Assurant Inc) (26 March 2013). "The FHFA's Home Insurance 'Crackdown' Is Late to the Game". Businessweek. Retrieved 30 April 2014.
  31. ^ "Insurance Company Settles HUGE Case". Huffington Post. 21 March 2013.
  32. ^ Jeff Horwitz (18 January 2013). "CFPB Treads Lightly on Force-Placed Insurance - Insurance Networking News". Insurancenetworking.com. Retrieved 30 April 2014.
  33. ^ "Insurance Commissioner Dave Jones Announces $42.7 Million Rate Reduction For Policyholders Of "Force-Placed" Mortgage Insurer". Insurance.ca.gov. Retrieved 30 April 2014.
  34. ^ "FHFA Seeks Curbs on Force-Placed Homeowner's Insurance". Bloomberg.
  35. ^ Zibel, Alan; Scism, Leslie (4 November 2013). "U.S. Takes Aim at 'Forced Insurance'". The Wall Street Journal.
  36. ^ "Lender-Placed Insurance Coverage". Floir.com. Retrieved 30 April 2014.

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