Australia's largest global insurer QBE Insurance Group yesterday announced its partnership with Jupiter, an emerging leader in predicting and managing climate risk.
Jupiter’s “ClimateScore” is a comprehensive, cloud-based platform that incorporates environmental factors in an integrated, dynamic model to deliver risk-focused solutions. The platform comprises data that analyses and predicts climate risk from one hour to 50 years in the future.
QBE Group COO David McMillan said, “The risks related to severe weather and climate change are some of the greatest challenges faced by the insurance industry. Through our partnership with Jupiter we will be able to incorporate leading-edge data analytics to improve underwriting and pricing and provide resiliency management expertise for our customers.”
Jupiter currently predicts the probability of extreme weather in select North American cities and the company is steadily expanding to service global markets.
QBE’s partnership with Jupiter is in line with its commitment to managing climate-related risks and opportunities. Earlier this year, QBE also signed the Statement of Support to adopt the recommendations of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD).
QBE also invested in Jupiter via its venture capital arm, QBE Ventures, which partners with the world’s best and brightest start-ups to deliver new technologies and competencies. Jupiter is the fourth investment made by QBE Ventures, including HyperScience, Cytora, and RiskGenius, since its launch in 2017.
Jupiter is led by a team of world-renowned scientists and executives. It provides data and analytics services to better predict and manage risks from weather and sea-level rise, storm intensification and rising temperatures caused by medium to long-term climate change.
Headquartered in Sydney, QBE Insurance Group posted a better-than-expected 4% increase in interim profit after tax to $358m for the six months ended 30 June.
The first half combined operating ratio of 95.8% represents a meaningful improvement on the FY2017 combined ratio of 98.2% after adjusting for excess catastrophes and is underpinned by an improvement in the attritional claims ratio (excluding Crop and LMI) to 51.3% from 51.8%4 in the prior period.
The Group achieved an average premium rate increase of 4.6% during the half compared with only 1.0% in the prior period. Pricing conditions improved in all divisions but especially in European, North American and Asia Pacific operations. Premium rate momentum accelerated in Australian and New Zealand operations from an already strong level.
During the first half, QBE mobilised an extensive Brilliant Basics programme across the Group. Full implementation will take several years and will involve the transformation of QBE’s culture and business practices to consistently deliver world-class underwriting and claims management.
Alongside Brilliant Basics, QBE has implemented an intensive, detailed and action oriented underwriting performance management process known as the “Cell Performance Review” process. During the half, it completed over 300 cell reviews across the four divisions involving over 100 cells globally.
The successful rollout, embedding and refining of the Cell Performance Review process and the Brilliant Basics programme is expected to drive significant performance improvement over time, improving earnings quality and resilience across the Group more broadly.
Simplification initiatives undertaken in 1H2018 will result in the exiting of businesses and portfolios that generated an underwriting loss of over $200m in 2017.