Forecasts & Results

QBE Syndicate 386: 2020 and 2021 Year of Account Forecasts

Posted 13.05.2022 – Quick takes

QBE has released an updated forecast for the 2020 year of account and an initial forecast for the 2021 year of account for syndicate 386.

Syndicate 386

The 2020 forecast has worsened to between +8.1% and +13.1% of capacity, midpoint +10.6%. The previous forecast range was between +12.5%% and +17.5%, midpoint +15%.

An initial 2021 forecast has been set with a range of between +11.4% and +16.4% of capacity, midpoint +13.9%.

Alpha comment

The initial forecast for 2020 was a midpoint profit of +20.4% which has disappointingly been downgraded in each of the subsequent four quarters. The deterioration this quarter has been predominately caused by forecast investment return, which historically contributed an average 4% of capacity to the results in the last seven years. We have challenged QBE at length over their investment under-performance over recent years, as compared with their peers. It does appear that the reserves held on the prior years are also looking to be a little short, but a formal reserving exercise is not completed until later in the year.

The initial forecast for the 2021 year of account is lower than the initial 2020 forecast, which hopefully may suggest the syndicate is applying a little more caution in its forecasting. Rates in the non-US liability market have continued to improve since 2020.

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