QBE Insurance Group Limited ABN 28 008 485 014

Level 18, 388 George Street, SYDNEY NSW 2000 Australia

GPO Box 82, Sydney NSW 2001
telephone + 612 9375 4444 • facsimile + 612 9231 6104

www.qbe.com

10 August 2023

The Manager
Market Announcements Office
ASX Limited
Level 4
Exchange Centre
20 Bridge Street
SYDNEY NSW 2000
For personal use only

Dear Sir/Madam

QBE Presentation on the 2023 half year results

Further to the announcement today of our results for the half year ended 30 June 2023,
please find attached the presentation to be delivered to investors and analysts this morning.

This release has been authorised by the QBE Board of Directors.

Yours faithfully,

Carolyn Scobie
Company Secretary

Attachment
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 significant change in equity markets and interest rates; no major movement in budgeted foreign
exchange rates; no material change to key inflation and economic growth forecasts; recoveries
For personal use only

The information in this presentation provides an overview of the results for the year ended 30 June from our reinsurance panel; no unplanned asset sales and no substantial change in regulation.
2023. Should one or more of these assumptions prove incorrect, actual results may differ materially from
the expectations described in this presentation.
This presentation should be read in conjunction with all information which QBE has lodged with the
Australian Securities Exchange (‘ASX’). Copies of those lodgments are available from either the This presentation does not constitute an offer or invitation for the sale or purchase of securities. In
ASX website www.asx.com.au or QBE’s website www.qbe.com. particular, this presentation does not constitute an offer of securities for sale in the United States,
or to any person that is, or is acting for the account or benefit of, any U.S. Person, or in any other
The information is supplied in summary form and is therefore not necessarily complete. Prior to jurisdiction in which such an offer would be illegal. Securities of QBE may not be offered or sold in
making a decision in relation to QBE’s securities, products or services, investors, potential the United States or to, or for the account or benefit of, any U.S. Persons without registration under
investors and customers must undertake their own due diligence as to the merits and risks the Securities Act or an exemption from registration.
associated with that decision, which includes obtaining independent financial, legal and tax advice
on their personal circumstances. No representation or warranty is made as to the accuracy,
completeness or reliability of the information. (unless otherwise stated)

This presentation contains certain ‘forward-looking information’ and ‘forward-looking statements’ 1. All figures are in US dollars
within the meaning of applicable securities laws. The words ‘anticipate’, ‘believe’, ‘expect’, ‘project’, 2. Premium growth rates are quoted on a constant currency basis
‘forecast’, ‘estimate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’, ‘outlook’ and other
3. Premium rate change excludes North America Crop and/or Australian compulsory third party motor
similar expressions are intended to identify forward-looking statements. Indications of, and
(CTP)
guidance on, future earnings and financial position and performance are also forward-looking
statements. 4. Adjusted net cash profit after tax adjusts statutory net profit for Additional Tier 1 capital coupon
accruals, as well as any gains on disposal, amortisation or restructuring costs
Such forward-looking statements are not guarantees of future performance and involve known and
5. 2021 and prior periods are presented on an adjusted AASB 1023 basis as presented in prior reports
unknown risks, uncertainties and other factors, many of which are beyond the control of QBE that
may cause actual results to differ materially from those either expressed or implied in such 6. APRA PCA calculations at 30 June 2023 are indicative. Prior period calculation has been updated to
statements. There can be no assurance that actual outcomes will not differ materially from these be consistent with APRA returns finalised subsequent to year end
statements. You are cautioned not to place undue reliance on forward-looking statements. Such
forward-looking statements only speak as of the date of this presentation and QBE assumes no
obligation to update such information.
Any forward-looking statements assume ex-cat claims and catastrophe claims do not exceed the
allowance in our business plans; no reduction in premium rates in excess of our business plans; no
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Growth remains a highlight North America strategic execution

13% GWP growth supported by 10.2% premium Enterprise wide focus on NA strategy and
rate increase and ex-rate growth of 7% ambition for improved returns

Catastrophe costs impact underwriting result Completion of major reserve transaction

COR of 98.8%, or 97.6% excluding reserve ~$1.9B of long tail reserves successfully de-
transaction announced in February risked

People and culture

FY23 outlook maintained
More engaged, and building connection to our
Group COR ~94.5%, GWP growth ~10%.
purpose, enabling a more resilient future
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Deepening volatility focus, ongoing Progressed a number of global growth

refinement of property CAT exposure opportunities

Structured collaboration, alignment around Continue to prosecute potential for

new enterprise operating principles standardisation, sharing or common
sourcing

Voice surveys remain encouraging, Launch of QGiving, QBE’s employee

launch of employee share purchase plan fundraising and volunteering platform
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• Commenced formal engagement with priority commercial

Foster an orderly and inclusive customers and large suppliers
transition to a net-zero economy
• Green Insurer of the Year, 4th year in a row

• Gender equality: top 100 globally (Equileap) and maintained in

Enable a sustainable and Bloomberg’s Gender Equality Index
resilient workforce • QShare launch, QBE’s new employee share purchase plan,
contributing to the financial resilience of our people

Partner for growth through • QGiving launched to deepen the engagement of our people with
innovative, sustainable and community partners by matching employee donations and reward
impactful solutions volunteer hours to eligible causes of their choice
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Average rate increase Cat claims 8.7% Total investment income of Capital above S&P ‘AA’ 35% interim payout ratio
+10.2% $662M level
Includes 1.2% impact from
Ex-rate growth +7% 4.9% exit running yield Debt to total capital 24.7% 10% franked
reserve transaction
 Organic growth continues across key focus areas, partially offset by exposure reduction in property lines
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18%
1H23
18%
6% North America 6% 3% 5%
10% Crop
NA (ex Crop) (1%) (7%) 6%
(1)% $12,803M

International 18% 10% 16%

$11,576M
13% growth
Australia Pacific 18% 9% 13%

Group 13% 7% 12%

1H22 FX North International Australia 1H23

America Pacific
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• Catastrophes from secondary

Further organic growth across AUS/UK SME
perils continue to challenge Deepen core
and Middle market, Lloyd’s, Crop, NA
industry returns franchises
accident & health
• Focus on challenging return
assumptions, enhancing
models and tools, and
reducing standalone property
~23% Expand footprint in Favourable markets for QBE Re, steady
exposure
focus areas build across Continental Europe
• Favourable backdrop to
improve property rating,
quality and balance.
Standalone property cells ~(10%)
saw average 1H23 rate Explore and innovate
Cyber, Lloyd’s facilities and renewable
increase of ~23%, with ex- across new
Ex-rate growth Rate energies
rate growth down ~10% opportunities
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 Strong investment returns served to mitigate the headwind from current and prior year catastrophes
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Restated 1H23
1H22

Gross written premium $M 11,576 12,803

98.8 Upfront
1.2 cost of LPT Net insurance revenue $M 7,328 7,977
Net claims ratio % 65.5 69.0
94.9 61.6 97.6 60.6 2.4 Net commission ratio % 17.7 18.1
Ex-cat Ex-cat
claims claims Expense ratio % 11.7 11.7
(0.1) Combined operating ratio %
1H22 1H23 94.9 98.8
1H22 1H23
Insurance operating result $M 375 95
Net insurance finance income $M 784 149
Investment losses from risk-free rate movements $M (854) (201)
Net investment (loss) income $M (20) 662

10.1 14.0 Net profit after income tax $M 48 400

9.0
Adjusted cash profit after income tax $M 66 405
1.7
1H22 1H23 1H22 1H23 Adjusted cash return on equity % 1.7 10.1
 Notable changes to key metrics under AASB 17 management reporting framework
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Net insurance Quota share income now recorded in reinsurance income. In 1H23 the $98M net upfront cost of the
revenue reserve transaction is recorded in reinsurance expenses

Includes strain from the establishment of current accident year risk adjustment, plus any impacts from
Ex-cat claims
onerous contracts (onerous contract provision held broadly steady in 1H23)

Prior year
Includes the benefit of prior year risk adjustment unwind
development

Commission
Ceding commission income moves to net insurance revenue
expense

Risk free rate Impact from changes in risk free rates on both assets and liabilities now reported across standalone
impacts P&L line items, and outside underwriting and investment results
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+12%
1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
$7,977M COR 94.9 98.8
10.4% 8.1% 10.9% $7,328M
Expenses 11.7 11.7
9.9% 11.0% 9.1% 6.7% 10.6% 11.5%
29%
30%
73% 73% 74% 74% 68% 66% 18.1
Commission 17.7
7.0% 5.5% 9.4% 41%
39% Cat 6.2 8.7
7.1% 6.9% 6.3% 4.9% 9.2% 9.5%
85% 88% 87% 87% 84% 85%
31% 30%
9.1% 9.9% 11.8%

8.6% 9.4% 9.4% 10.4% 11.3% 12.2% 1H22 1H23

Ex-cat 61.6 60.6
87% 86% 87% 87% 90% 88%

8.1% 7.7% 10.2%

1H23
7.9% 8.2% 8.4% 7.1% 10.0% 10.5%
North America 5%
83% 85% 84% 84% 82% 82% (0.3)
International 16% (2.3)
PYD
YTD premium retention Australia Pacific 13% 1H22 1H23
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106.9
COR (%) 95.9 9.2 COR (%) 95.4 93.2 98.9
COR (%) 92.9
Expenses 9.8 Expenses 12.3 13.5
20.5 12.1 Expenses 12.8
Commission 20.7 Commission 15.6
3.9 16.8 17.9 Commission 15.7
Cat 2.8 9.3 PYD 0.8
6.0 6.2 Cat 9.6 11.8
Cat

Ex-cat 66.2 64.0 60.0 61.8

Ex-cat 59.5 57.9 Ex-cat

(3.6) (0.9) (5.2) (3.8)

PYD PYD
1H22 1H23 1H22 1H23 1H22 1H23

• Catastrophes materially above • Favourable prior year development and • Catastrophes underscored by NZ
allowance and prior period supportive ex-cat trends events in February
• Prior year strengthening for winter storm • Continued benefit from operating • Improvement in short tail rate increases
Elliott and Crop leverage and expense management to support outlook
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Credit spread contribution

FI yield (ex risk-free rate) 531 2.1 Weighted average RFR

4.9%

4.1% 4.2%
Credit spreads MTM 52 0.2

Risk assets 87 2.7

Corporate bonds Short-term money Growth assets

Expenses and other (8) (0.0)
Government bonds Other fixed income Enhanced FI

Dec-22 Mar-23 Jun-23

Net return 662 2.4

Growth assets Enhanced FI

• Further improvement in fixed income running 3.2% 2.5% 1.3% 0.7% 5.5% 13% 17% 38% 34% 11%
yield, exiting 1H23 at 4.9%
Infrastructure Unlisted Listed Alternatives AAA AA
assets property equities A <A
• Duration ‘economically’ matched at 1.8 years
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1.79x 1.80x $3.1B $3.0B $3.0B 10.1%

$2.8B $2.7B

1.7%

FY22 1H23 FY19 FY20 FY21 FY22 1H23 1H22 1H23

• Regulatory capital at the top end of our Debt to • Encouraging resilience and improvement in
1.6x-1.8x target range total 27.5 25.8 24.1 23.7 24.7 ROE despite challenging period for
capital underwriting profitability
• Includes ~3pt impact from June debt issue and
~6pt impact from reserve transaction Debt to
equity 38.0 34.8 31.8 31.0 32.8
• 1H23 dividend expected to be ~2pt impact

• Capital above S&P ‘AA’ level

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 Progress on portfolio balance and profitability
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FY18-22 Avg FY22 FY22 1H23

26% COR1 AASB 1023 AASB 1023 AASB 17 AASB 17
30% 31% 30% 32% Crop
Crop 96% 96% 96% 99%
20% 27% 26% 26% 26% Specialty
18% 19% Specialty 98% 96% 96% 94%
19% 23%
29% Commercial
32% 28% 24% 21% 14% Non-core Commercial 106% 94% 96% 109%
FY19 FY20 FY21 FY22 FY23E

• Run-off of non-core lines will continue over the next two years, • Specialty segment continues to demonstrate improvement,
and largely represents homeowners and commercial programs underpinned by A&H and Financial Lines
• ‘Go-forward’ business mix continues to evolve toward more • Commercial segment performance remains challenging, and
balanced target profile impacted by current and prior year catastrophes in 1H23

Note:
1. COR represents the go-forward portfolio, excluding non-core lines
 Drag from non-core lines to moderate meaningfully into FY24
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Homeowners Commercial

Premiums
~($140M) ~($150M)
~($250M)

Gross reserves

FY20-22 FY22 1H23 Subject to LPTs

Average Net reserves

• Unprofitable non-core lines further impacted by current and • Approximately half of the net reserves reflect short tail
prior year catastrophes in 1H23 property classes
• Expect drag from non-core lines to moderate meaningfully • Majority of legacy long tail reserves have been reinsured
into FY24 across several loss portfolio transfers

Note:
1. AASB 1023 basis
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• Premium rate increases expected to remain supportive

• Expected 2023 constant currency
GWP growth of ~10% • Market conditions to remain conducive for further targeted
organic growth

• Consistent low-to-mid 90s COR • COR outlook continues to exclude upfront impact of reserve
through-cycle transaction announced in February

• 2023 COR of ~94.5% • COR outlook includes a revised catastrophe budget of ~$1.3B

• Continue to rebalance the portfolio toward our 15% target risk

asset allocation
• 1H23 exit running yield of 4.9%
• QBE to provide 3Q23 performance update on 27 November
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1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23
Gross written premium $M 11,576 12,803 4,708 4,967 4,367 5,072 2,503 2,771 Ex-cat claims $M (4,514) (4,836) (1,436) (1,463) (1,719) (1,897) (1,353) (1,479)
Insurance revenue $M 8,942 9,911 3,208 3,508 3,281 3,793 2,448 2,600
̵ CAY risk adjustment $M (348) (316) (85) (84) (151) (123) (112) (110)
Net insurance revenue $M 7,328 7,977 2,170 2,285 2,890 3,278 2,255 2,393
NIR (ex Crop and LMI) $M 6,544 7,211 1,487 1,599 2,890 3,278 2,155 2,314 Catastrophe claims $M (454) (699) (61) (213) (175) (204) (218) (282)

Net claims expense $M (4,799) (5,505) (1,420) (1,763) (1,916) (2,072) (1,453) (1,671) Prior year development $M 169 30 77 (87) (22) 29 118 90
Net commission $M (1,296) (1,442) (450) (469) (487) (588) (355) (374)
̵ PYD (Central estimate) $M (52) (177) (28) (169) (75) (33) 52 19
Expenses and other income $M (858) (935) (212) (211) (355) (395) (288) (322)
Insurance operating result $M 375 95 88 (158) 132 223 159 26 ̵ PYD (Risk adjustment) $M 221 207 105 82 53 62 66 71

Net claims incurred $M (4,799) (5,505) (1,420) (1,763) (1,916) (2,072) (1,453) (1,671)
Ex-cat (ex Crop, LMI, RA) % 55.2 55.2 55.7 54.1 54.3 54.2 56.3 58.0
Ex-cat (ex RA) % 56.9 56.6 62.3 60.3 54.3 54.2 55.0 57.2
Ex-cat claims ratio % 61.6 60.6 66.2 64.0 59.5 57.9 60.0 61.8 Ex-cat claims % 61.6 60.6 66.2 64.0 59.5 57.9 60.0 61.8

Catastrophe claims % 6.2 8.7 2.8 9.3 6.0 6.2 9.6 11.8 ̵ CAY risk adjustment % 4.7 4.0 3.9 3.7 5.2 3.7 5.0 4.6
Prior year development % (2.3) (0.3) (3.6) 3.9 0.8 (0.9) (5.2) (3.8)
Catastrophe claims % 6.2 8.7 2.8 9.3 6.0 6.2 9.6 11.8
Net claims ratio % 65.5 69.0 65.4 77.2 66.3 63.2 64.4 69.8
Prior year development % (2.3) (0.3) (3.6) 3.9 0.8 (0.9) (5.2) (3.8)

Net claims ratio % 65.5 69.0 65.4 77.2 66.3 63.2 64.4 69.8 ̵ PYD (Central estimate) % 0.7 2.3 1.2 7.5 2.6 1.0 (2.3) (0.8)
Net commission ratio % 17.7 18.1 20.7 20.5 16.8 17.9 15.7 15.6
̵ PYD (Risk adjustment) % (3.0) (2.6) (4.8) (3.6) (1.8) (1.9) (2.9) (3.0)
Expense ratio % 11.7 11.7 9.8 9.2 12.3 12.1 12.8 13.5
Combined operating ratio % 94.9 98.8 95.9 106.9 95.4 93.2 92.9 98.9 Net claims ratio % 65.5 69.0 65.4 77.2 66.3 63.2 64.4 69.8

Note:
1. 2022 has been restated to reflect the application of AASB 17 Insurance Contracts
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