QBE Insurance Group's Key Subsidiaries Affirmed by AM Best with Stable Outlook

AM Best has affirmed the Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Ratings of "a+" (Excellent) for QBE Europe SA/NV, QBE UK Limited, QBE Capital (Global) Ltd., QBE Capital Ltd., and the pooled members of QBE North America Insurance Group. The outlook is stable, reflecting QBE's strong balance sheet, robust underwriting performance, and favourable business profile.

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) for QBE Europe SA/NV (Belgium), QBE UK Limited (United Kingdom), and the pooled members of QBE North America Insurance Group. The outlook for both ratings is stable, reflecting QBE's strong balance sheet, robust underwriting performance, and favourable business profile [1].

The stable outlook on the FSR indicates that QBE's consolidated balance sheet strength remains very strong, as assessed by AM Best. This strength is supported by QBE's risk-adjusted capitalisation, which was resilient to the adverse impacts of the COVID-19 pandemic in 2020. However, the group's balance sheet strength deteriorated slightly in 2021 due to increased underwriting risk from significant portfolio growth.

QBE's strong operating performance assessment is underpinned by a track record of robust underwriting performance and a diverse earnings profile. The group's combined ratio improved in 2021, reaching 91.5% (93.7% excluding the impact of changes in risk-free rates), compared to long-term averages and recent performance. However, the negative outlook on the Long-Term ICR reflects pressure on QBE's strong operating performance assessment following weaker-than-expected results over recent years, including underwriting losses and a significant impairment of goodwill in 2020.

The group's favourable business profile is highlighted by its excellent geographic diversification and strong competitive positions in core markets. QBE's focus on commercial lines insurance has been a significant factor in its success.

The following pooled members of QBE North America Insurance Group also received the affirmed ratings:
- General Casualty Company of Wisconsin
- General Casualty Insurance Company
- NAU Country Insurance Company
- North Pointe Insurance Company
- Praetorian Insurance Company
- QBE Insurance Corporation
- QBE Reinsurance Corporation
- QBE Specialty Insurance Company
- Regent Insurance Company
- Southern Pilot Insurance Company
- Stonington Insurance Company

The stable outlook on the FSR reflects AM Best's assessment of QBE's strong balance sheet, robust underwriting performance, and favourable business profile. The group's ability to demonstrate underlying performance improvements and return to underwriting profitability in 2021 has been encouraging. However, the negative outlook on the Long-Term ICR underscores the need for QBE to maintain these performance improvements to avoid a potential negative rating action.

References:
[1] https://news.ambest.com/newscontent.aspx?altsrc=23&refnum=240779