Australia headquartered global insurance and reinsurance group QBE has revealed an expectation of a US $750 million loss for the first-half of 2020, as its catastrophe losses came in over budget and it forecast a $335 million hit from Covid-19 in the period.Overall, QBE forecast its total losses from the Covid-19 pandemic as being around $600 million pre-tax, $335 million coming in the first-half of this year.Catastrophe losses during the first-half are reported to be $310 million, up from $180 million in the prior year and well over the companies $250 million budget.The catastrophe loss hit was driven by the bushfires in Australia, as well as the Australian east coast hail and storm activity in the period.

Absent the Covid-19 losses and the above budget catastrophe burden, QBE said that its combined ratio would actually have been around 3% better than the prior year, as its attritional claims ratio improved by around 2%.Even with the catastrophe losses, but excluding Covid-19, the combined ratio is forecast at 95%, which is a one percent improvement on 2019’s H1 figure.But with Covid-19 pandemic impacts, QBE said its combined ratio for the period will be around 104%, with prior accident year claims development of around $120 million another factor affecting the company in the first-half, with U.S.

business a key driver of this.QBE said its impacts from the pandemic are across lines such as business insurance including property (business interruption), reinsurance, workers’ compensation, casualty (including D&O), accident & health (A&H), trade credit, lenders’ mortgage insurance (LMI) and landlords’ insurance.Further pandemic claims could come from trade credit and LMI, but also in casualty (including D&O), A&H, landlords’ insurance and other classes of business.

The overall impact to QBE is expected to be a net statutory loss after tax of around US $750 million, including the pandemic claims, above budget catastrophe loss experience and prior accident year claims development, as well as a net investment loss of around $125 million caused by investment market volatility.QBE Group CEO, Pat Regan, commented, “Despite the impact of COVID-19, I am encouraged by the strong underlying trends evident in the result.Notwithstanding significant uncertainty surrounding the enduring impact of the COVID-19 pandemic, our greatly strengthened capital base positions us well to capitalise on accelerating pricing momentum and emerging organic growth opportunities.” QBE recently .

It’s expected the companies reinsurance will have responded to the above budget catastrophe losses and possibly also the adverse prior year development as well.———————————————————————.All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.