QBE Insurance: Narrower Focus in North America With Middle-Market Growth Too Challenging

No-moat QBE Insurance is reducing its exposure in North America, exiting the middle-market segment. The middle-market segment is insurance sold via brokers for midsize businesses, with products spanning property, auto, and general liability cover such as personal injury. The business closure reduces QBE Insurance’s gross written premium, or GWP, by around USD 500 million, representing 7% of 2023 North America premiums and 2% of group premiums. We expect the impact on profit to be minimal, given the reason for exiting is challenged performance for several years—the segment was under strategic review for sale or closure 10 years ago. Management expects a limited impact on the group's combined operating ratio in 2024, but we suspect a modest positive impact in 2025 once the business has been more substantially wound down.