QBE’s North America CEO: Strength to strength
Todd Jones assesses the carrier's capabilities as 2021 begins.
Todd Jones joined QBE in October 2019 in the role of CEO, North America after holding a number of senior roles at Willis Towers Watson.
What is your assessment of QBE’s capabilities thus far?
When I think about QBE North America, I consider our strength as a global insurance leader that is laser-focused on customer needs. This strength enables us to infuse advanced technology with relevant products to solve unique risks with ease. Our local people are knowledgeable advisors that customers can trust. Because we know no computer can replace that human touch which is required for building lasting trusted relationships. This approach ensures that customers receive the coverage they need, combined with compassion and customer service that spans far beyond the parameters of any policy. And during this time of COVID-19, we have really seen this play out.
Despite shifting toward a more virtual way of doing business, the level of engagement from our customers and distribution partners has been impressive. We’ve even observed a leveling of the playing field with larger competitors who rely on larger field organisations. The agility and tenacity of our people really showed when it mattered most.
My vision – and the vision of the organisation – is to offer a balanced portfolio of specialised products and services that produces long-term and sustainable performance. We’ll do this by continuing with an eye toward our customers.
In this remarkably fluid environment where digitalisation, operating landscape, and customer preferences are rapidly shifting, it is critically important for us to look forward to anticipating these changes and have a clear set of priorities to help us achieve our goals.
COVID-19 has actually served as a catalyst for speeding up some of the transformational elements of what we want to achieve, particularly as it relates to our customer, as well as innovation, technology and digital objectives. We’ll continue to focus on modernising QBE North America further, while doubling down on the businesses where we have a distinctive advantage and an opportunity to expand market share, such as A&H, Retail P&C, Crop and Alternative Markets.
What are your thoughts on the broader P&C market, in terms of pricing? Which lines of business offer the most promise for growth and/or tightening terms & conditions?
We have currently observed, both industry-wide and here at QBE, a market that has supported positive premium rate that actually started into 2018 and began to really accelerate during the second half of 2019 and into 2020. There were a number of external factors that have collectively pushed the market upward including natural disasters like hurricanes and wildfires, as well as heightened small weather.
Additionally, the interest rate environment has been very low and unsupportive of investment returns. Also, the concept of social inflation has certainly become more pronounced in recent years, in terms of both societal and litigation trends.
All of these facts have been “in play.” Adding the pandemic and subsequent rising levels of economic uncertainty surrounding it, I believe the current hard market conditions will be prolonged. This will be particularly reinforced as the reinsurance market tightens and alternative capacity in that space isn’t growing.
While the market is supportive of rate growth in a number of places, how you grow and where you grow is an important question set. The opportunities are pretty broad at the moment across Specialty lines (both in the admitted and non-admitted space) as well as in the standard commercial space.
There also are certainly questions around how the pandemic will influence the policy terms and conditions. All of that said, there is a recognition that elevated levels of premium rates are required to support stability in earnings and capital generation. The industry continues to grapple with achieving an appropriate level of rate adequacy given the rise in loss trends from the aforementioned factors.
Pleasingly, we have been able to achieve premium rate increases in a fairly forensic manner which has allowed us to maintain and even improve our retentions while ensuring we achieve the right level of rate increases in the right places.
Our focus has been around achieving growth in areas in which we have strong franchises, including relevant market positioning, valued capabilities and deep-rooted distribution relationships. These areas include our Crop, A&H, MSL, and property businesses in the MGA space and through our affiliated agency, Westwood Insurance Agency.
Have you any merger or acquisition plans in the works?
In terms of M&A, our goal is to leverage existing capabilities to accelerate growth, but we certainly may consider inorganic opportunities if there is an opportunity to deepen our offering, drive efficiencies or scale.
One example is our acquisition last year. Our Westwood Insurance Agency acquired the assets, primarily people and technology, of Property Plus Insurance. Property Plus Insurance offered technology solutions for home builder affiliated agencies and a suite of personal lines insurance products. The companies were highly compatible and perfectly aligned to execute our business plan and growth strategy.
This story was originally published in Reactions.