Australian Ethical Investment Ltd., a pension fund with about A$14 billion ($10 billion) under management, is pressuring QBE Insurance Group Ltd. over the potential threat extreme weather poses to future profitability.
The fund, which holds about A$65 million of QBE shares, has requested additional information from the Sydney-based insurer over its exposure to climate-related risks, and called for further annual assessments on the issue.
Investors need QBE to make clear how much of the “current insurance book is not viable from a climate perspective,” the pension fund’s ethical stewardship lead Amanda Richman said in an interview. Australian Ethical and share trading platform SIX filed a shareholder resolution on the issue to be voted on at QBE’s annual general meeting Friday, which is backed by about 100 other — mostly retail — investors, Richman said.
There’s a need to facilitate “a more comprehensive understanding of the pathways through which physical climate change impacts QBE’s prospects,” and doing so wouldn’t create more onerous reporting obligations, Australian Ethical and SIX said in material filed with the resolution.
“The assertions made in the resolution and supporting statement misunderstands our insurance business model, the structure of our products and our portfolio optimization decisions made to date,” QBE said in a March filing in response, asking investors to oppose the proposals. QBE declined to comment further.
Insurers globally are contending with a growing frequency of floods, wildfires and other disasters, with annual natural catastrophe losses topping $100 billion for six straight years, according to Swiss Re. Some providers are choosing to reduce their coverage in particularly vulnerable markets, or to withdraw entirely.
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QBE previously exited some under-performing property portfolios and recalibrated other retained lines, resulting in “catastrophe losses at or below established allowances” in recent years, the company said in an annual report published in February.
The insurer forecasts a net annual average loss for climate-related perils of $654 million in 2026, the equivalent of about 5% of the group’s net claims, the report said. Catastrophe claims were $751 million in 2025 and related to hurricanes, tropical cyclones and floods across North America, Europe and Australia, including wildfires in California and Hurricane Melissa.
“QBE disclosure of physical risks analysis related to its underwriting activities does not appear to significantly lag peers,” shareholder advisory firm Institutional Shareholder Services said in a research note. The Australian Shareholders’ Association, which advocates for retail investors, recommended voting against the climate resolution at Friday’s meeting.
Photograph: A pedestrian holding an umbrella walks past the Sydney Opera House stands in Sydney, Australia; photo credit: Brendon Thorne/Bloomberg
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