QBE trims prestige car insurance over costs

QBE Insurance is pulling back from parts of the luxury and prestige car insurance market.

QBE exited a partnership with Porsche on January 1.

QBE Insurance is pulling back from parts of the luxury and prestige car insurance market, but insists it is not retreating completely from high-end auto insurance.

The Australian understands QBE exited a partnership with Porsche on January 1 and is in the process of withdrawing from a tie-up with Tesla late next month. The decisions are said to be due to difficulties in generating profits from parts of the prestige end of the car market, linked to the high cost of parts sourced from manufacturers offshore.

Last year also saw steep increases in the price of insurance for Tesla owners insured through QBE because of costs related to servicing that market. Back in 2016, Tesla started offering insurance in Australia in part through the InsureMyTesla product which was underwritten by QBE, while Tesla was an authorised representative of Marsh Advantage Insurance.

A QBE spokeswoman wouldn’t comment directly on the decision to step back from Porsche and Tesla, but said the company was committed to remaining a provider of luxury car insurance.

“QBE provides prestige car insurance and has no plans to exit this market.

“We’re proud of the strong ­relationships we have built in the market and are always wor`king with our partners to meet the ­expectations of customers,” she said.

“As prestige car markets are traditionally at the forefront of technology trends, we work closely with partners in ensuring we collaborate to provide efficient, streamlined processes and positive customer experiences. Within our prestige car portfolio we have several longstanding and successful partnerships across a range of markets within the motor trades space.”

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Interestingly, Porsche appears to be stepping up its global investment in so-called insurtech start-ups, including a partnership with Mile Auto and tipping into a capital raising for start-up roadside assistance platform Urgent.ly Inc.

But feedback suggests owners of Porsche and Tesla cars are being advised by QBE that their policies will not be renewed, and many are finding it difficult to obtain insurance.

Inquiries by The Australian on iSelect’s website provided zero options to insure a Porsche 911, while Compare the Market had a limited number of high-priced policies, many limited to those over 40.

Among its agency relationships, QBE works with prestige, luxury, sport and classic car insurance underwriting group MB Insurance.

QBE’s laser-like focus on its product set comes as the company undertakes a simplification program and targets net cost savings of $130 million over the three years to 2021.

Its interim results, for the six months ended June 30, showed premium rate increases across all of QBE’s geographic divisions, including 6.6 per cent growth in Australia and New Zealand.

But total gross written premium — which is the sum of the policy amounts charged by insurance companies before any reinsurance costs are deducted — fell 1 per cent as premium rate rises were offset by a range of factors, including NSW’s reforms in the compulsory third-party market. QBE reports its full-year financial results on February 25.