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Concentrating on the existing business: John Neal speaks to Insurance News Editor Michelle Hannen

The broker view: Insurance News spoke to brokers across the local market for an assessment of QBE. M ULTI NAT IO NA L BRO KE R: “I’ve got the upmost respect for John Neal and Colin Fagen and I think what they’re doing is right for the business,” says Leo Demer, Australia and New Zealand Chief Executive of JLT. “They’ve taken stock because they’ve had this major acquisition strategy and with difficult financial times ahead I think they’re doing exactly what a smart businessman would do.” Mr Demer describes Mr Neal and Mr Fagen as “two very good operators – they understand the numbers and they understand the business”. “They’re looking at all their lines, as you’d expect them to do. If you’re going to get knocked around on a particular line of business, you change it.” On the controversy in the local market over QBE’s offshoring plans, Mr Demer says he was “surprised by the criticisms”. “Why should brokers tell an insurance company how to run their business? They’re smart people. They’re making the right decisions, and they’ll get the right people to carry out those tasks.” On the whole, Mr Demer sees QBE as a business heading in the right direction. “We couldn’t be happier with the relationship and with the way things are going with QBE. What we have found recently is that they’re very easy to talk to. That is different.” Mr Demer says this change in the local business has come about due to Mr Fagen, who he describes as “a lot more accessible”. N AT IO NA L BRO KE R: “Some improvement off recent lows”, was how one local broker boss, who declined to be named, described QBE’s recent performance as a business partner. He says the company “was number one in the market for a long period of time – probably wrongly so – which resulted in a tremendous amount of arrogance”. The broker, a capital city-based, mid-sized corporate specialist with a national client list, says QBE is an example of a company that “forgot about their customer base – insurance brokers”. “We grew a business with them many years ago. They don't do that today.” The broker sees QBE as a company that continues to struggle to find the right balance between technical pricing and sales-led underwriting. “For years they were sales-focused and were making money hand over fist. Then came the rise of the underwriters, who ceased to be commercially minded and became overly technical. “Now the sales focus is back, with business development managers (BDMs) being pushed to write profitable business. But they’ve disenfranchised their intermediaries.”

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He characterises QBE as strong in small business and getting rate increases on electronic placements, “but they just don't write as much corporate as they used to”. “At the end of the day, they’re still good, but other insurers have now caught up to them. They used to be our number one underwriter and now they’re one of three.” The broker says a lack of product development over the past 10 years has compounded the problem, with stale products and out-ofdate wordings costing QBE business. He says talented staff are being lost to its competitors and the insurer needs to bring more outsiders in with fresh ideas and approaches to break open what he describes as “the QBE culture – the mould”. R E G I ON A L B R O K E R : “They’ve always been an arrogant insurance company,” was how the chief executive of one small regional insurance broker described QBE. “They’ve got the attitude that they’re that big that they can do what they like.” His comments – shared on the condition of anonymity – include QBE “not playing fair” by offering one set of rates for new business and another for renewals, and holding back their best renewal terms until the “eleventh hour”. Another serious concern surrounds QBE not disclosing endorsements put on renewals to the broker’s staff. “They alter renewals at the last minute and don’t tell us. They cut cover with no notice.” Consistency is much desired but often lacking, the broker says. “If they’re down on new business one month they’ll start undercutting towards the end of the month. There’s no consistency.” He says the situation would be greatly improved if QBE joined the Steadfast Virtual Underwriter. On the claims side, the broker says he has first-hand experience of QBE’s offshored claims-handling in Manila. His staff say they have found the Manila centre is taking too long to process motor claims, failing to follow up where required, closing claims without payment being made, and complain of claims getting lost in the system. “We’ve had claims that sit there for weeks and weeks.” The Manila centre staff are also described as “not fully up-to-date with QBE processes” and while their spoken English is commended, he says their understanding of some concepts is not at the same level. Aside from the impact of the offshoring, the broker says he has seen little change in the organisation under Mr Neal’s leadership to date. For him, the more important relationship is with their BDM. While he rates the current BDM they are dealing with, this hasn’t always been the case. “Our GWP with them has fluctuated over the years as a result. “We’re starting to build with them again, but we have some reservations particularly on they way they are approaching renewals.”

October/November 2013

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Profile for Insurance News (the magazine)

OCT/NOV 2013 - Insurance News (the magazine)  

QBE CEO John Neal has spoken exclusively to Insurance News about his drive to turn the global insurer’s fortunes around. Our in-depth articl...

OCT/NOV 2013 - Insurance News (the magazine)  

QBE CEO John Neal has spoken exclusively to Insurance News about his drive to turn the global insurer’s fortunes around. Our in-depth articl...