Changes to QBE leadership unlikely to affect underlying strategy – Fitch Ratings

Following the dismissal of QBE’s CEO Pat Regan, Fitch Ratings believes a significant shift in the insurer’s strategy is unlikely.

Fitch Ratings said: “Strategic initiatives in recent years have supported QBE's business profile, and we expect this to continue. These include the exit from several unprofitable markets and portfolios, implementation of an operational efficiency programme to improve processes and lower costs, and balance-sheet improvements through higher capital and lower financial-leverage ratios.

Regan was dismissed on 1st September 2020 and had been in his role since 2017. The move followed an external investigation that concluded that Regan had breached the group's code of ethics and conduct in relation to employee communication.

Mike Wilkins, who took over as QBE's chairman in March 2020, becomes the executive chairman while the group finds a new CEO.

Fitch Ratings said QBE made a net loss of £539m in the six months ending 30 June 2020, due mainly to the impact of the coronavirus pandemic on underwriting and investment markets.

It added that the group expects further pandemic-related net claims of £201m over the next 18 months.

Fitch said QBE had strengthened its balance sheet by raising £616m of equity and £371m of AT1 securities, and also by reducing risk in its investment portfolio and improving reinsurance protection.

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