Own QBE (ASX:QBE) shares? New CEO reveals insurer’s biggest challenges

There’s one thing this CEO wants to get right for QBE to succeed while at the helm…

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Shares in QBE Insurance Group Ltd (ASX: QBE) kicked off the week with a slight fall today.

At the end of the session, the insurance company was down 1.4% to $11.84. Though, investors have watched as the QBE share price has floated between ~$11 and ~$12.50 since the beginning of August.

While the market hasn’t received any major announcements recently, investors might be watching on to see how the company tracks with its relatively new CEO at the helm.

Andrew Horton joined the company as its group CEO in September 2021. Shortly after, Horton shared what he thought were QBE’s greatest challenges that lay in front of him.

People maketh the company

The QBE share price might be up nearly 55% from its COVID-19 lows, but the company’s new CEO still foresees some big challenges ahead.

During an interview with Insurance Business, Horton suggested the biggest challenge would be getting the people and culture right. In fact, the former CEO of Beazley — a London-based insurance company — went as far as to say, “If we can get the people and culture bit right, then everything else is relatively straightforward.”

Horton explained that while this task might sound easy, it poses a very difficult mission when dealing with an organisation with over 11,500 people.

Horton stated:

It sounds very easy, but if it’s not natural to everybody, it’s going to be quite hard. That’s why I need to start with the executive group, being supportive of each other and thinking towards the enterprise, and then cascade that down to the organization. I think that will be the challenge.

The increased focus on people follows a high turnover in senior leadership. This is an aspect of the business that Horton hopes to address and bring some stability to.

Furthermore, from his experience at Beazley, Horton recognises that once the culture and people are in good order, external interactions also improve. The example given was better interactions with brokers and clients, which feed into the success of the overall company.

How have QBE shares performed?

Impressively, QBE shares have outpaced the S&P/ASX 200 Index (ASX: XJO), both on a year-to-date and 12-month basis. Since the beginning of 2021, the QBE share price has appreciated 38.5% in value. Meanwhile, the Australian benchmark has climbed a much lower 8.4%.

Oddly, the Australian insurance company is beating the benchmark despite its trailing 12-month earnings still being in the negative. Potentially, investors are more focused on the 12.9% increase in revenue for the year at the end of June 2021.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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