Why QBE had to cut short Pat Regan’s tenure as CEO

Former QBE Insurance chief executive Pat Regan is described as “ultra-competitive” and at times displays an aggressive leadership style.

QBE chief executive Pat Regan was dumped by the insurer this week. Picture: Britta Campion

Former QBE Insurance chief executive Pat Regan is described as “ultra-competitive” and at times displays an aggressive leadership style. But it was neither of those traits that brought him unstuck this week.

The Weekend Australian understands it was ongoing communication with a female US-based employee — who was part of QBE’s future leaders talent pool — via texts, email and Zoom that became unwelcome and ­inappropriate that ended the CEO’s tenure. The communication was not always work-related and is thought to have involved a Zoom video call that included inappropriate behaviour by Regan.

The situation came to a head about two weeks ago, when a complaint was lodged and the staff member tendered her resignation.

The QBE board brought in law firm MinterEllison to conduct a forensic investigation, which led to a decision late on Monday that Regan had to go.

The insurance group announced it was parting ways with its CEO to the ASX on Tuesday, noting Regan’s behaviour showed “poor judgment” and fell short of standards in its code of ethics and conduct. The company did not provide specific details on the probe’s findings.

While some shareholders applauded the move by QBE chairman Mike Wilkins to act quickly to remove Regan, others wanted more board disclosure about the nature of the CEO’s communications, to be able to gauge whether his axing was warranted.

A QBE spokeswoman declined to comment on a number of questions put to the company on Friday, but said: “As per our market announcement, Pat Regan will be departing QBE due to inappropriate workplace communications. We will not be providing any further information in relation to the person that raised the complaint.

“An announcement will be made to the market upon the ­finalisation of Mr Regan’s termination payment.”

Regan declined to comment on Friday.

He joined QBE from British insurer Aviva in 2014 as chief ­financial officer, before taking the reins as CEO four years later.

Current and former QBE ­sources spoke of Regan being “super and ultra competitive” and his leadership style was often “very terse”.

While travelling through QBE’s global offices he would usually organise — and sometimes insist on — early-morning soccer matches with colleagues to keep fit, but also test their mettle.

“He liked to stretch and test people on the soccer field,” one former colleague said, on the basis of anonymity.

Regan — an avid soccer fan — came from Norfolk, northeast of London, and supports Norwich in the English Premier League.

His competitive streak was also associated with his fondness for basketball great Michael Jordan’s philosophy of always having a competitive edge.

While those traits may have been required to simplify and get QBE back on track following a torrid period, his leadership style rubbed some the wrong way.

“He’s fundamentally intelligent but an egotist and will cut people down and tell them they are an idiot,” a former QBE colleague said,

An employee at the insurer said: “Very few people got along with him very well. Pat was not liked or loved as a leader or a ­colleague.”

QBE has seen a string of executive turnover in the past 12 months. The insurer’s group chief risk officer, Peter Grewal, is leaving at the beginning of next year to join London’s M&G.

Vivek Bhatia, who led QBE’s Australian operations, last month announced his exit to become CEO of ASX-listed Link.

Last year, operating boss David McMillan left to become CEO of British insurer esure, and North America chief Russell Johnston also parted ways with QBE.

The latest conduct scandal follows AMP last month losing chairman David Murray and board member John Fraser after investors revolted against the company’s response to several incidents, including the mid-year promotion of Boe Pahari despite a 2017 sexual harassment complaint.

Pahari last month was demoted back to his infrastructure equity position, and won’t lead the AMP Capital division. AMP also lost its Australia boss, Alex Wade, last month due to conduct issues, with The Weekend Australian revealing he sent lewd photos to a female employee.

Regan replaced John Neal, who was forced to ­resign as QBE chief executive following a string of profit downgrades and a scandal over a relationship with his ­assistant that he ­didn’t disclose.

Regan’s LinkedIn profile shows him welcoming new staff and congratulating others on their appointments, and sharing a post about QBE donating equipment to healthcare workers at a handful of US hospitals during COVID-19.

It also highlights a soccer match between Marsh Australia and QBE 11 months ago — including photos — to help raise funds for Vinnies Australia.

QBE is the longstanding major sponsor of AFL club the Sydney Swans.

Last month, as he handed down the insurer’s half-year results, Regan said QBE had “worked really hard” to provide staff with support during the pandemic.

“We’ve shipped necessary equipment to their homes, screens, chairs, laptops … We’ve also really ramped up communications from an already high level, but now including an array of things like virtual town halls; mass Yammer sessions; videos; what we call Pat chats, which are messages from me; lunch and learns; educational sessions,” he said at the time.

Fitch Ratings’ analysts on Friday said they didn’t anticipate a “significant shift” in QBE’s strategy in the short to medium term, despite the leadership change.

“Strategic initiatives in recent years have supported QBE’s business profile, and we expect this to continue,” they said.

“These include the exit from several unprofitable markets and portfolios, implementation of an operational efficiency program to improve processes and lower costs, and balance-sheet improvements through higher capital and lower financial-leverage ratios.”