Emerging Markets business review
“Emerging Markets maintained steady, solid growth in 2015. With a strengthened leadership team and management structure in place, our expansion in Asia Pacific and Latin America is being driven by increased cross-regional synergies and implementation of our profitable growth strategy.”David Fried
Chief Executive Officer • Emerging Markets
Supporting trade flow
One of the busiest ports in Colombia, Puerto de Cartagena, is now covered by comprehensive liability insurance following the collective efforts of QBE teams in Colombia and Europe.
Puerto de Cartagena plays a critical role in Colombia’s trade sector, serving ships up to 5,500 twenty-foot equivalent units (TEU) and handling more than 21 million tonnes of cargo annually. As the nation’s economy grows, so too does the importance of its ports. By combining local market knowledge and the specialty experience from the QBE European team, QBE now provides bespoke liability coverage to Puerto de Cartagena.
1 Excludes Argentine workers’ compensation.
2 Up 9% on a constant currency basis.
3 Up 10% on a constant currency basis.
The combination of large and strongly growing populations, increasing urbanisation, rising affluence and the under penetration of insurance translates into a very positive outlook for insurance business across the Emerging Markets.
Despite slower growth in China, economic activity in other parts of Asia Pacific is expected to be relatively robust with Malaysia, the Philippines and Vietnam all forecast to record strong levels of growth. In Latin America, premium growth is also likely to improve over the longer term on the back of macroeconomic recovery.
Excess capacity, the aggressive pursuit of market share by competitors and a potentially sustained low interest rate environment represent significant challenges for many emerging market insurers. Notwithstanding these, QBE is well positioned for further profitable growth due to our global strength, broad cross-regional presence and local expertise.
Emerging Markets continued to build on its solid foundation during the year.
A single operating model was established with the creation of a combined Emerging Markets board and management structure.
The Latin America profitable growth strategy was approved by the QBE Group Board in February 2015. A divisional head office was established in Miami and remediation actions were taken to further improve performance in the region. This included the sale of the Argentine workers’ compensation business and a reduction in exposure to the Colombian SOAT business.
Inter-regional synergies were developed with the leadership team now providing oversight of underwriting, distribution and claims from our regional offices in Hong Kong, Singapore and Miami. To improve efficiency and consistency, and to further enhance the scalability of Emerging Markets’ operations, some administrative, claims, human resource and finance services were relocated to the QBE Group’s Shared Services Centre (GSSC) in the Philippines.
In 2015, the division posted steady, solid underlying growth in both gross written and net earned premium as well as an improved combined operating ratio.
The ongoing and successful implementation of our profitable growth strategy in both Asia Pacific and Latin America is critical to sustaining profitable growth over the longer term.
To drive business growth, we will continue to enhance productivity, efficiency and consistency across Emerging Markets. We will also continue to strengthen the underwriting capabilities and focus on winning and retaining profitable and high quality business. Building on our customer‑centric approach, we will continue to utilise technologies and work with our intermediaries and customers to mitigate potential risk exposures. We will also ensure the right people are in the right positions to drive business growth as we endeavour to deliver the best customer experience for the lowest possible cost.
My thanks go to our business partners for their continued support and to our dedicated staff for their hard work. We look forward to achieving our business targets together in 2016 and beyond.
The QBE Foundation - In the community
Helping Vanuatu rebuild
In March 2015, Cyclone Pam devastated Vanuatu, a country where QBE is the leading general insurer with a market share of more than 80%. Having been in the country since the 1920s, Vanuatu is more than just a market we serve – it is a community to which we are deeply connected. To assist the people of Vanuatu as they recovered from the enormous destruction caused by Cyclone Pam, QBE Emerging Markets organised a donation program. Along with staff donations from Asia Pacific and Latin America as well as corporate matching, the program raised over US$35,000. This and an additional donation of US$25,000 directly from the QBE Group Foundation was given to the Australian Red Cross to help in the relief work in Vanuatu.