QBE is one of the most compelling AI cost-reduction stories on the ASX, and we believe the February selloff that punished it on disruption fears missed the point entirely. As a global insurer processing millions of claims annually across more than 20 countries, QBE’s cost base is dominated by exactly the kind of high-volume, rules-based work that AI is purpose-built to transform: claims assessment, underwriting, fraud detection, and customer triage. AI-powered claims automation could dramatically cut manual handling costs, particularly after natural catastrophes when volumes spike.
On the underwriting side, machine learning models assess risk faster and more accurately than traditional approaches, improving both pricing and loss ratios. Fraud detection is another area of significant potential, with AI systems consistently outperforming manual review at comparable global insurers. Strip out even a fraction of QBE’s operating cost base through these applications and the earnings uplift is material making the February selloff look less like a warning sign and more like a mispriced opportunity.
QBE writes about 25% of its annual premiums in Australia and New Zealand, 25% in North America, and 50% from Europe etc, illustrating precisely what makes the AI cost-saving argument for QBE both compelling and complex. Also, QBE operates a sprawling technology stack built over decades of acquisitions. AI-driven process outsourcing in claims handling, underwriting decisioning, and customer service is a natural fit, and the cost savings potential is arguably larger than in banking given if AI can be utilised to simplify their complex legacy systems.
- We can see QBE initially testing $25 in 2026, or ~10-15 higher – MM is long QBE in its Active Growth Portfolio.
MM is long and bullish QBE
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