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Middle Market Potential

Companies to Watch - March 2011

Company: QBE Services Inc.

Year Founded: 2009
PREMIUMS/YEAR: In Canada, QBE Services Inc. underwrites approximately $200 million in gross premium.
# of EMPLOYEES: 9

Beginnings:
QBE Services Inc., was established in 2009 with offices in Vancouver and Toronto as the Canadian arm of international insurer The QBE Group. The company, which operates in 49 countries, has been writing insurance in Canada since the 1970s as a Lloyd’s syndicate and is Australia’s largest insurance company, founded in 1886.

General manager David Edgar was first “given marching orders” in 2009 to establish a team in Canada to take over the claims service from QBE’s London claims staff.

“With the volume of business we write in Canada, we have a substantial number of claims to deal with,” says Edgar. “It was not necessarily cost-effective to deal with this volume of claims in London.”

Edgar began the process of setting up two offices–in Vancouver and Toronto–by reviewing QBE’s service providers already established here, such as lawyers and adjusters, to make sure the right support was in place.

“I employed business development managers to meet with brokers and managing general agents to assist with access to QBE underwriters and to develop new products specific to the Canadian marketplace.”

Reasons to Watch:
QBE has enjoyed enormous success as a Lloyd’s syndicate for nearly four decades in Canada. It is part of one of the world’s leading insurers. Globally, QBE wrote $11.2 billion in gross premium in 2009.

Attracting public sector clients has become easier for QBE since the company established offices in Canada.

“We’ve had a tremendous amount of success around new construction and infrastructure projects that have been placed in the last 24 months,” says Edgar.

QBE is insuring most of the large infrastructure projects going on in the country right now as part of Canada’s Economic Action Plan, along with most of the infrastructure projects in Ontario, the Port Man Bridge/Highway Project in Vancouver (a $2.46 billion project), and a number of major hydroelectric projects.

Recent Triumphs:
Given its reputation as one of the world’s largest insurers with a “healthy appetite for risk,” it’s no surprise that The QBE Group has been responsible for underwriting major sporting events in Canada and around the world, including last year’s World Cup in South Africa. QBE defined itself as a key player in this market domestically as the primary liability underwriter for the Vancouver 2010 Winter Olympics.

Challenges:
QBE Services Inc. is attempting to tap into the middle market in Canada, with premiums in the $30,000 to $150,000 range. New areas for growth for QBE include property, professional liability and commercial auto fleet.

“We’re very strong construction industry underwriters and infrastructure writers,” says Edgar. “We feel that if we’re writing the city of wherever, and they’re having difficulty with their commercial fleet, we should be able to support the client on that other product line as well.”

But making a move into the commercial auto market has proven to be one of QBE’s biggest challenges.

“It’s not performing well and it’s difficult to enter a class of business when it’s not particularly profitable,” says Edgar. “But we feel it’s necessary to find a way to develop this product to support other lines of business that we’re currently writing.”

Edgar says QBE is proceeding with caution, however.

“We do not want to be a company that goes into a product line and then leaves a year later and says ‘we shouldn’t have done that.'”

New Initiatives:
Within that competitive middle market, QBE Services Inc. is also trying to design some affinity programs or packages where the company can solve a niche problem.

“For example, a professional association with a complex medical malpractice exposure or a professional liability exposure,” says Edgar. “This is an area where we can be creative with the structure of the program for that group.”

Quote from Representative:
“We win business because we are a company that sees things differently,” says Edgar. “We don’t run away from a client when they have a large claim. We’re also not afraid to put up $100 to $150 million on one risk, so that’s very attractive.”

Charitable Causes:

The Children’s Wish Foundation, The Diabetic Children’s Foundation, McNally House Hospice.

Headquarters: Bay-Adelaide Centre, 333 Bay Street, Suite 920, Toronto, Ontario M5H 2R2
Website: http://www.qbeeurope.com/canada/index.asp
Telephone: 416-682-5930

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Copyright 2011 Rogers Publishing Ltd. This article first appeared in the March 2011 edition of Canadian Insurance Top Broker magazine.

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.