QBE snares Beazley chief Andrew Horton as new boss with $14m package

QBE’s new CEO will shift from London to take up the job in Sydney, arriving to remuneration package worth up to $14m.

Incoming QBE chief executive Andrew Horton

Insurance company QBE Insurance has opted for a London-based external candidate to lead its business, appointing Andrew Horton, the head of specialist London-listed insurer Beazley, as its new chief executive.

The finance and insurance executive has signed on to QBE on a lucrative package worth up to almost $14m, which was bolstered by a one-off payment of $4.5m worth of cash and share rights to compensate him from leaving his London post.

Mr Horton will be on fixed pay of $1.8m and be eligible for short term incentives worth up to $4.05m, as well as longer term awards worth up to $3.6m, putting his maximum total annual package at $9.45m.

That the finance and insurance veteran was picked for the job is being seen as a sign that QBE’s board could review some strategies that have seen it build up substantial operations in North America, Europe and Australia, with the taking place once Mr Horton takes up the post in September.

QBE suffered a tumultuous 2020 which included the dumping of former CEO Pat Regan. Long-serving Richard Pryce delayed his retirement to step in as interim chief executive.

QBE parted ways with Mr Regan in September after a probe found inappropriate conduct following a complaint from a female employee.

The insurer’s annual report showed Mr Regan received termination benefits – including a payment in lieu of a reduced notice period – of $US213,500 and leave entitlements $US265,500. At the time of his exit QBE said about $9m in share grants and rights were forfeited.

Welcoming Mr Horton, QBE chairman Mike Wilkins said the company was delighted to attract such a high calibre global financial services executive with over 30 years experience across insurance and banking and in international markets.

Mr Horton has led Beazley, which has operations across Europe, the US, Canada, Latin America and Asia, since 2008. Prior to that he was chief financial officer at the company.

“Andrew is an inclusive and collaborative executive, who places a strong focus on risk, culture and relationships. He is known for driving positive change and high performance and has built a well-respected business over a number of years,” Mr Wilkins said.

Beazley manages five Lloyd’s syndicates and, in 2020, underwrote gross premiums of $US3.56bn. It is a market leader in lines including professional indemnity, property, marine, reinsurance, accident and life, and political risks and contingency business.

During Mr Horton’s tenure the company grew by around 10 per cent per annum, increased market value and bolted on international operations to the previously London-focused firm.

Former QBE Insurance CEO Pat Regan. Picture: Hollie Adams

Mr Horton earlier spent 15 years in the banking industry at ING, Nat West and Lloyds Bank, and was UK chief financial officer for ING’s wholesale banking division.

Mr Pryce will stay on until year end to assist with the handover. Delivering the insurer’s results last month he flagged that COVID-19 business interruption claims posed the “greatest uncertainty” for the sector.

QBE indicated that it was facing a better 2021 after axing its final dividend for last year, due to marked losses of $US1.5bn and lower investment income.

In January, QBE said the group’s total ultimate COVID-19 allowance was $US785m ($1bn) including risk margins of $US300m. The insurer has disclosed a net cost of UK insurance business interruption claims of $US70m.

QBE’s loss compared to a $US550m profit in 2019. The earnings were marred by factors including reduced investment income, higher catastrophe claims from extreme weather events, the impairment of goodwill and deferred tax assets in North America.

The insurer’s board said it would resume dividend payments with its 2021 first-half results, as long as global economic conditions do not deteriorate materially.

It was the first time QBE had not paid a dividend for at least 38 years, given the company endured a tumultuous 2020. But it cited accelerating premium momentum as cause for optimism.

QBE reported a 10 per cent rise in gross written premium to $US14.7bn, and net earned premium increased 4 per cent to $US11.8bn.

But investment income tumbled to $US226m for 2020, compared to $US1.04bn the prior year, even as returns picked up in the latter 2020 half.