QBE Insurance : 2016 AGM – Chairman’s and CEO’s Addresses

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QBE Insurance Group Limited ABN 28 008 485 014‌

Level 27, 8 Chifley Square, SYDNEY NSW 2000 Australia

GPO Box 82, Sydney NSW 2001

telephone + 612 9375 4444 • facsimile + 612 9231 6104 www.qbe.com

0 QBE

4 May 2016

The Manager

Markets Announcements Office ASX Limited

Level 4

Exchange Centre 20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam,

2016 Annual General Meeting of Shareholders - addresses

Please find attached:

1. Chairman's address; and

2. Chief Executive Officer's address. Yours faithfully,

Carolyn Scobie

Company Secretaty

Attachments

2016 AGM Chairman's Address

I am very pleased to address you this morning - in what is our 130th anniversary year - to reflect on QBE's performance and achievements in 2015, and our strategy and plans for 2016.

Your company reported a cash profit of $893 million and an adjusted combined operating ratio of 94% for 2015. These results are consistent with the financial targets that we set out early in the year and, just as importantly, they are consistent with our ongoing objective to deliver earnings stability and predictability.

During the year we also put in place the final elements of the comprehensive capital plan which we announced in August 2014. Pleasingly, and as a result of the plan, we ended the year with QBE's already-robust capital ratios further strengthened. This fact has been acknowledged by the major rating agencies in their assessment of our capital strength.

It's important to consider the 2015 result, and the outlook from here, alongside broader dynamics and trends in the insurance industry. There is no question that the strong financial results reported by QBE were achieved amidst tough market conditions.

We operate in an environment where there is a freer and more diverse supply of capital - including from non-traditional capital sources such as hedge funds, pension funds and sovereign wealth funds - to the insurance industry than ever before. As a result, and coupled with relatively benign catastrophe loss activity

in recent years, insurance pricing is being dragged down at the same time as investment returns remain well below historic levels.

On average, insurance pricing across our business decreased by 1.3% in 2015, and we anticipate similar declines in 2016.

In this environment insurers have no alternative but to focus their efforts on high quality underwriting, efficiency and cost reduction. It's no coincidence that these themes have underpinned QBE's strategic plans for the last several years as we turned our attention first to refocussing and stabilising the business, eliminating non-performing segments, and now increasing our emphasis on controlled growth.

At last year's AGM I reflected on the quality of QBE's underwriting DNA, while acknowledging that the path to higher returns is to continue our work to establish QBE as a great underwriting company. The 2015 result reinforced the progress we are making in this area, with each of our businesses producing an underwriting profit.

Our European Operations and Australian and New Zealand Operations delivered another year of solid performance in ever more challenging market conditions. Our Emerging Markets portfolio is showing encouraging growth and performance improvement.

Particularly important to the Group result was the continuing improvement recorded by our North American Operations. This business reported its third consecutive year of performance improvement. The division's combined operating ratio has improved from 111.5% in 2013 to 99.2% in 2015.

However, there are other important indicators of QBE's improving organisational health that are not directly evident in the Group and divisional

numbers. Many of these relate to the evolution of our "ONE QBE" culture as our people work together to find ways to improve the way we do business and develop innovative solutions for our customers.

I am fortunate to have the opportunity to see first-hand the way QBE's changing culture is resonating not only with our own people, but with our customers and intermediaries across the globe. There is no question that our franchise is growing stronger in our chosen markets.

We've fostered a cultural shift towards greater collaboration between divisions as this is fundamental to a series of customer-centric growth and operational excellence initiatives that will help us deliver growth and efficiency over the medium to long term. John Neal, our Group CEO, will discuss several of these initiatives in his address.

You will hear that there is a great deal of opportunity before us, and I am delighted that it is matched by a real commitment to harnessing our global presence so that we deliver the best outcomes for all our stakeholders -- our customers, our people and our investors.

To assist with collaboration across our business, management has recognised the importance of unifying all our people behind a common purpose - why we exist as an organisation.

To this end, last year we asked our customers, our investors and our people why they want to deal with QBE and a common theme from those conversations was one of belief; of trust in QBE to deliver and to help them achieve their own aims and ambitions. So we captured that theme in identifying our purpose: "We give people the confidence to achieve their ambitions."