QBE European Operations plc

QBE European Operations plc Annual report 2011 03
Chairman’s statement
At a glance
“In a year of exceptional natural catastrophe claims
and low investment returns, QBE EO’s ability to
continue to deliver profits is testament to our
experienced underwriters, our cautious approach
to managing risk, the quality of our products and
the benefits of our geographic diversification.”
Frank O’Halloran
Chairman of QBE European Operations
Chief Executive Officer
QBE Insurance Group Limited
QBE European Operations
2011 was a year of exceptional claims: the
London market, in particular, was affected
by insured losses from the floods in Thailand,
earthquakes in New Zealand, an earthquake
and tsunami in Japan, tornadoes in the US,
flooding in Australia, Hurricane Irene, which
caused extensive damage in the Caribbean
and on the east coast of North America.
In addition, investment markets continued to
be difficult. Market activity, which was already
adversely affected by the tragic events in Japan
and a loss of momentum in the US economy,
came to be dominated by developments in the
Eurozone, particularly the debt crisis in Greece
and fears that sovereign debt restructuring
would spread to other countries that use the
Euro. At the end of the year, the global economic
outlook was one of subdued recovery in the
developed markets and – given the likely
protracted resolution of Europe’s debt problems
– central banks were adopting a cautionary
stance on monetary policy.
The results we achieved in 2011 were,
therefore, a testament to our experienced
underwriters, our cautious approach to
managing risk, the quality of our products and
the benefits of our geographic diversification.
Secura NV
In addition to QBE celebrating its 125th
anniversary in 2011, Secura NV commemorated
its 65th year of operation. Founded in 1945
as a reinsurance provider within the Belgium
Farmers’ Association, it became part of KBC
Bank in 1998 and was acquired by QBE EO
in 2010. Its integration is going to plan and it
has already added considerable value to our
reinsurance capabilities as well as to our profile
in Europe.
The QBE Foundation
The QBE Foundation was launched in
April 2011 and is QBE’s major corporate
responsibility initiative. The intention of the
QBE Foundation is to extend beyond
philanthropy and to create a platform for
QBE and its employees to engage with
the communities in which we operate.
Global workforce diversity
QBE has also established a global workforce
diversity policy. This sets out the guiding
principles for management practices, with the
aim of achieving a more balanced representation
of women in senior leadership roles throughout
the organisation. A Workforce Diversity Council
– which will take local legislation, business
operations and culture into account in each
of the markets in which QBE operates
– is responsible for reviewing and making
recommendations to the QBE Group board.
The board and management
There was one change to the board during
the year. Kathy Lisson stepped down from
her role as Chief Operating Officer effective
15 February 2011, to return to her native
Canada. On Kathy’s departure, David Winkett
was appointed Chief Financial and Operating
Officer. I have also announced my intention
to retire later this year, after 35 years with the
QBE Group. John Neal will take up the role
of Chairman of QBE EO.
Following the board’s decision to transfer
the management of UK National Distribution
to the Property, Casualty and Motor Division,
Terry Whittaker chose to leave QBE EO.
He had played a vital role in the successful
building and management of our distribution
capability, under the banner of National and
European markets and I thank him for his
valuable contribution.
Patrick Coene has been appointed to the new
role of Managing Director, European Markets.
While our general managers have already
carried out a tremendous amount of work
in building our European markets business,
Patrick’s arrival will accelerate its development.
By providing an essential continental European
perspective at executive level, this should help
create market opportunities for QBE EO.
People
On behalf of the directors, I acknowledge
the achievements and hard work of all our
staff. We choose our people for their ability,
experience, potential and “can do” approach
to their work and we recognise that developing
and retaining them – through our personal
development, performance management and
reward frameworks – is vitally important in
achieving consistently high standards of
business excellence.
I thank our Chief Executive Officer, Steven
Burns and his management team for their
diligence during the year and their contribution
to our success.
Outlook
Our priority for 2012 continues to be to deliver
our plan and to exceed the Group’s target
return on allocated capital, rather than simply
pursuing top-line growth. To achieve this, we
will continue our disciplined underwriting stance
and our focus on retaining quality business.
We will also continue to look for opportunities
to grow our business and, through that, to
increase shareholder wealth.