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Adverse weather conditions hit QBE's crop insurance business


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Adverse weather conditions hit QBE's crop insurance business

QBE Insurance Group Ltd.'s North American crop insurance business is expected to report claims of about 107% to 109% on net earned premium of nearly A$1.2 billion in 2019 due to adverse weather conditions.

The Australia-based insurer said an unusually cool growing season and heightened crop hail could result in a deteriorated combined operating ratio, rising above the top end of its 2019 target range of 94.5% to 96.5%. The company previously recorded a combined operating ratio of 98% in the first half of 2019, which was higher than the 10-year average of about 90%.

The adverse weather conditions are also expected to contribute to slightly elevated attritional loss experience in some of its North American property classes.

The insurer estimates a net investment return of 2.5% to 3% in 2020, down from 3% to 3.5% in 2019, reflecting lower global risk-free rates. It also estimates a combined operating ratio target range of 93.5% to 95.5% for 2020.