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• Incorporate climate change into our investment strategies

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      • Lead in risk analysis
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      • Incorporate climate change into our investment strategies
      • Reduce the environmental impact of our business
      • Report and be accountable
    • The QBE Foundation

Incorporate climate change into our investment strategies

4.1 Consider implications of climate change for company performance and shareholder value

QBE EO believes that climate change presents both potential threats and opportunities for our industry. We monitor emerging developments very closely and will continue to adapt our business planning and evolve risk-mitigation strategies in response. In particular we are making extensive use of the best available risk modelling and aggregate accumulation techniques to help define our risk appetite. To the extent that climate change could impact us on the asset side, QBE adopts a low-risk absolute return strategy.

The prevalence of energy-intensive sectors such as property, manufacturing, marine and aviation among our client base could potentially expose us to a future decline in demand for carbon-intensive products and services. Our market-leading position, however, means we are well placed to monitor emerging trends and provide support in to new and emerging energy technology products and services. We also perceive opportunity in growing risk-awareness in a future in which climate change encourages a greater incidence of insurable events.

Such growing awareness could also reduced claims costs by promoting more active risk prevention among our insureds. Overall we remain vigilant and are cautiously optimistic that the QBE business model of diversification by product and geographical location – combined with stringent risk management discipline – provides a secure foundation for our business going forward.

Further details of our consideration of the implications of climate change for company performance is outlined in the previous section.

4.2 Encourage disclosure on climate change by companies

QBE seek to promote and engage in public debate through participation in initiatives such as the Carbon Disclosure Project and ClimateWise.  We believe that adoption of recognised best practice and public disclosure serves to increase ‘peer pressure’ on those organisations not currently publicly reporting greenhouse gas emissions and hence encourage future disclosure.

4.3 Encourage improvements in energy efficiency and climate resilience of property investments

General insurance companies also face asset risk relating to potential climate change impacts on the value of their investment portfolios.
QBE adopts a low risk, absolute return on investment strategy and at 31 December 2008, around 94% of the Group’s investment comprised high quality and very liquid fixed interest and cash with equities representing less that 6% of total investments and cash.

4.4 Communicate investment strategy to investors and shareholders

The Group Chief Risk Officer and Group Chief Actuarial Officer are responsible for monitoring and managing ongoing risks and opportunities relating to climate change in order to mitigate any adverse effect in QBE’s business and to protect shareholders’ funds.

See response to Principal 5.

4.5 Share assessment of impacts with pension fund trustees

No information available at this time.