QBE Insurance Group

This section provides information about the climate-related risks and opportunities that could reasonably be expected to affect the Group's prospects, including current and anticipated impacts over the short, medium and long term.

Physical risk

Increased frequency and severity of weather-related events, resulting in increased claims - Climate-related physical risks arise from acute, weather-related events (such as more frequent and severe storms, floods, drought or heatwaves) and from chronic, longer-term shifts in climatic patterns (including changes in precipitation and temperature that may lead to sea level rise, reduced water availability, biodiversity loss and changes in soil productivity). Timeframe: Short, Medium and Long.

Transition risks

Exposure of QBE's underwriting portfolio to sectors adversely affected by the transition to a lower-carbon economy - Policy, legal, technological, market and reputational risks arise from efforts to transition to a lower-carbon economy. Certain sectors, such as fossil-fuel extraction and transportation, are considered more sensitive to transition-related pressures. Timeframe: Short, Medium and Long.

Exposure of QBE's investment assets to sectors adversely affected by the transition to a lower-carbon economy - Timeframe: Short, Medium and Long.

Opportunities

Investments in solutions to mitigate physical/transition risks of climate change - Timeframe: Short, Medium and Long.

Growth driven by new products or increased demand for products in response to market and technology shifts driven by the transition to a lower-carbon economy - Timeframe: Short, Medium and Long.

Time horizon definitions and identification process (para 11)

The identification of risks and opportunities that could reasonably be expected to affect the Group's prospects was informed by QBE's top risks process, scenario analysis and input from subject matter experts and key management across the Group. This assessment considered QBE's value chain, internal documentation such as top risks and scenario analysis outputs, and publicly available information about industry trends, regulatory developments and market expectations, where relevant.

Risks and opportunities were evaluated over the short (0 to 3 years), medium (3 to 10 years) and long term (10+ years), and involved the application of judgement, including to assess:

• the likelihood and magnitude of potential financial impacts, and the relevance of qualitative factors such as reputational implications, regulatory focus and strategic alignment;
• the expectations of primary users in determining whether information about a risk or opportunity could reasonably be expected to influence their decisions, based on consideration of industry developments, investor focus areas, and QBE's public commitments, recognising that such expectations are inherently judgemental and may not be directly observable; and
• the effect of planned or existing mitigation strategies in determining whether disclosure remained appropriate. Where mitigated impacts were not expected to materially affect the Group's prospects, qualitative disclosures were considered where there were indicators that information about QBE's approach to managing those risks or opportunities could be material to primary users' understanding of the Group's prospects.

The outcomes of the assessment were presented to the Sustainability Steering Committee, E&S Subcommittee and the Board Audit Committee.

The time horizons used to classify the impacts of climate-related risks and opportunities reflect alignment with the following:

• Short-term – aligns with QBE's three-year business planning cycle.
• Medium-term – includes the period during which the Group's interim operational and investment targets apply, and broadly aligns with the Group's long tail claims settlement periods.
• Long-term – captures the impacts that may emerge beyond the short- and medium-term horizons described above.

Key: Short-term: 0 to 3 years; Medium-term: 3 to 10 years; Long-term: 10+ years.

Physical risk - business model and value chain impact

Climate change is expected to increasingly impact the frequency and severity of weather-related natural catastrophes. These risks are continually assessed through catastrophe modelling and underwriting analysis, which inform the Group's underwriting and reinsurance strategy, as well as the calibration of the catastrophe allowance within the business plan. QBE considers business activities as vulnerable to climate-related physical risks where they are significantly exposed to catastrophic weather events and contribute materially to the Group's annual catastrophe claims cost within net insurance service expenses and net insurance contract liabilities. Classes most impacted include property and property-related product lines, with varying impacts across perils and regions. In property classes, QBE's peril exposures are most significantly driven by hurricanes, tropical cyclones, convective storms, windstorms and floods across North America, Europe and Australia. As an indicator of relative exposure within the claims profile, the modelled aggregate net annual average loss (AAL) for climate-related perils for 2026 is $654 million and represents approximately 5% of the Group's 2026 plan net claims, noting that modelled outcomes are subject to significant uncertainty. Following the exit of underperforming property portfolios and recalibration of retained property lines, QBE has experienced catastrophe losses at or below its established allowances in recent years.

Other product lines that may be exposed to physical climate risks were not considered to be vulnerable where structural features such as coverage design or regulatory protections exist to limit susceptibility to volatility from these events, or where historical claims experience indicates that such events are not a primary driver of financial performance. This includes North America Crop, where the predominant product structure provides revenue protection to farmers. Claims are primarily triggered by declines in revenue which may result from either lower crop yields or lower commodity prices, and market forces of supply and demand typically act as a stabilising mechanism between these two variables. The program is also subject to federal reinsurance arrangements that significantly limit QBE's net exposure to impacts from catastrophic weather events.

Transition risk (underwriting) - business model and value chain impact

Policy, legal, technology and market changes associated with the transition to a lower-carbon economy can alter cost structures and demand patterns across industries. These shifts may influence the risk profile and volume of insured activities and, in turn, affect premium volumes and claims experience. The Group's Marine, Energy & Aviation product class is most significantly exposed to sectors considered to be at high risk from the transition to a lower-carbon economy, and accounts for $1,758 million or 7% of the Group's gross written premium in the current year. This assessment was informed by business subject matter expertise, supplemented by sectoral analysis to the extent data was available. Judgement was applied in attributing premium to sectors and in determining which exposures were considered to be at higher risk of disruption from the transition to a lower-carbon economy, with further work planned to enhance the reliability and completeness of sectoral data.

Transition risk (investment) - business model and value chain impact

Transition-driven developments and evolving consumer preferences may adversely affect investment performance if they materially disrupt the business models of investees. QBE's analysis of the investment portfolio indicates that the Group's investment assets are not materially exposed to high transition risk, with limited overall exposure to transition-sensitive sectors. The investment classes that may be most impacted are:

• Infrastructure assets, comprising $1,426 million or 4% of total investments at 31 December 2025, which are expected to have the highest relative exposures to transition-sensitive sectors such as transportation and fossil fuel-linked infrastructure; and
• Developed market and emerging market equity investments which are passively invested through broad market index exchange-traded funds and amount to $856 million or less than 3% of total investments.

However, no material impacts are expected given the diversified composition of QBE's portfolio as well as ongoing mitigation measures, which support the overall resilience of the portfolio.

Opportunities - business model and value chain impact

Investments in climate solutions: QBE invests in climate solutions as part of its broader investment strategy to support the transition to a lower-carbon economy and deliver on its climate-related commitments. QBE's selection of climate solution investments is subject to the same return and risk appetite criteria applied across its broader investment portfolio.

Growth opportunities: Policy and technology shifts associated with the transition to a lower-carbon economy are expected to increase demand for insurance solutions that enable the deployment and operation of transition technologies (including renewables, battery storage, hydrogen and carbon capture). This creates opportunities to broaden product offerings, adapt and scale existing products, deepen risk-engineering capability and expand underwriting capacity in these segments.

How we respond - physical risk

• Pricing and underwriting appetite: Given that most insurance policies renew annually, QBE can regularly adjust pricing and underwriting appetite in response to emerging risks. The Catastrophe Accumulation Management team provides technical catastrophe pricing for a large number of property policies. QBE aims to regularly refresh its pricing factors using up-to-date catastrophe modelling, reflecting current accumulations, reinsurance costs, and required return on capital.
• Portfolio optimisation: QBE continues to refine its portfolio to improve risk-adjusted returns and reduce earnings volatility. This includes targeted reviews of property exposures in higher-risk regions, improved diversification and continual refinement of policy terms, supported by enhanced analytical tools and modelling capabilities.
• Catastrophe modelling capability: QBE continues to enhance its understanding of the potential impact of climate change on specific perils and regions through catastrophe modelling and climate scenario analysis. The Catastrophe Modelling Research team continues to strengthen QBE's in-house capability to validate and customise models, including for potential climate-related impacts.
• Reinsurance: In the short term, QBE manages the volatility of natural catastrophe claims through a comprehensive Group catastrophe reinsurance program. QBE also continues to explore alternative capital solutions, including the recent launch of a catastrophe bond.

How we respond - transition risk (underwriting)

• Relevance of core products: QBE core product coverage (such as property damage, third-party liability and business interruption) address fundamental insurable risks that persist across technology shifts and are underpinned by regulatory and contractual demand.
• Pricing and underwriting approach: The predominantly annual nature of our policies enables regular changes in pricing, terms and conditions, and portfolio adjustment in response to changing risk profiles and market conditions.
• Risk appetite and exclusions: QBE's Environmental & Social Risk Framework includes underwriting controls on specific high-emitting activities, limiting exposure to the most vulnerable segments under transition scenarios.
• Leveraging opportunities: The transition is expected to create demand for insurance solutions that will support new and evolving technologies. QBE is actively seeking to capture these growth opportunities.

How we respond - transition risk (investment)

• Diversified asset allocation: QBE's investment portfolio is diversified across asset classes and geographies, which limits concentration in transition-sensitive sectors.
• Policy exclusions: Direct investments in specific high-emitting activities are restricted under QBE's Environmental & Social Risk Framework.
• Corporate credit portfolio management: Consideration of transition risk will be incorporated into in-house corporate credit analysis from 2026.
• External manager selection and due diligence: External managers are evaluated to ensure that climate-related risks are appropriately integrated into their investment approach, and transition risk analyses provided by these managers are reviewed to confirm that such risks are identified and managed.
• Ongoing scenario analysis and monitoring: Transition risk scenario analysis is conducted across major public asset classes.

How we respond - opportunities

QBE continues to monitor and evaluate possible climate solution investments as part of its investment strategy. This includes assessing emerging opportunities in both public and private markets that align with QBE's return objectives and sustainability commitments.

QBE's Transition Plan includes actions to enhance capabilities and scale insurance solutions in response to growth opportunities.

Transition Plan

QBE has prepared a Climate Transition Plan that sets out its strategic ambition, implementation approach and key metrics to support the transition to a net-zero economy. We recognise the important role that QBE can play in facilitating the climate transition, through how we manage our own operations, invest our assets, select the risks and companies that we underwrite, and manage our supply chains. The Transition Plan articulates the actions QBE will take to support the transition whilst managing its climate-related risks and opportunities, and is structured around three areas: (1) Ambition; (2) Implementation and engagement strategy; (3) Metrics and targets.

Our climate ambition

To support the transition to a net-zero economy QBE is: taking action in our underwriting business; taking action in our investment portfolio; targeting net-zero operational emissions by 2030.

Implementation and engagement strategy

Underwriting: Scaling insurance solutions that facilitate the transition, including products and services that support climate change mitigation. Integrating climate risks and opportunities into decision-making by continuing to embed positions on energy sectors into underwriting appetite, implementing an assessment of in-scope customers' transition maturity, and deepening understanding of higher-emitting portfolios to better understand transition risks and identify opportunities to support customers' transition.

Investments: Financing the transition through investment in climate solutions. Continuing to incorporate climate risk and decarbonisation pathways into investment due diligence for in-house managed corporate issuers and external managers.

Operations and supply chain: Taking actions to decarbonise our operations; embedding emissions reduction measures into our supply chain.

Advocating for climate resilience: Advocating for policies that support climate resilience.

Ambition intent, scope

Underwriting: We frame our ambition around taking meaningful actions, rather than achieving a fixed emissions target. As a re/insurer and asset owner, we focus our influence on positive action by directing capital and insurance to support our customers and communities to navigate the transition to a net-zero economy. Our ability to make progress depends on sustained action across the economy, including from governments, and on the availability of reliable data from customers and investees. The scope of 'taking action' is set out in the content of the Transition Plan.

Operations: We define our ambition as a 2030 GHG emissions target that is specific, measurable, and time-bound. It is based on emissions reduction initiatives we consider feasible given our current operational footprint and profile. Scope 1, Scope 2, and selected Scope 3 (specifically Categories 3 and 6) emissions.

Applying our Transition Plan in the United States: Actions taken in the United States, and other relevant jurisdictions, will be done in compliance with applicable laws and regulations. All actions and underwriting decisions for customers in the United States will be based on an ordinary insurance business purpose, which may include the application of sound actuarial risk and underwriting principles. This will guide our approach to collecting data from customers, suppliers and investees and making decisions.

Implementation roadmap

2025: Developed QBE's Climate Transition Plan.

2026: Underwriting: commence assessment of transition maturity of in-scope customers (phased approach); develop implementation plan to scale 'insuring the transition' products and services; implement data uplift and phased analysis of emissions intensity of higher-emitting portfolios. Investments: baseline current portfolio alignment based on the Net Zero Investment Framework (NZIF) methodology; assess possibility of introducing an alignment target; assess possibility of broadening scope of climate solutions; invest $200 million in climate solutions annually through to 2030; limit the Scope 1 and 2 WACI of the public corporate debt portfolio to 20% below the WACI of the market benchmark.

2027: Underwriting: operationalise implementation plan for 'insuring the transition' products and services.

By 2030: Operations and supply chain: achieve net-zero operational ambition; 70% of QBE's global strategic suppliers to have publicly defined emissions reduction targets.

Advocacy and engagement: Develop and execute an advocacy strategy in response to QBE's assessment of climate-related risks and opportunities.

We acknowledge that key factors that will guide our approach to net zero often lie outside our direct influence. Achieving our climate ambition is dependent on factors across our value chain including our investees, insurance customers and suppliers, as well as market and industry factors such as supportive policy frameworks, regulatory environment and technology advancements. Accordingly, the Transition Plan will be reviewed and refined over time to reflect developments in data, methodologies, public policy settings and market conditions.

Key actions and dependencies - Underwriting

Scaling insurance solutions that facilitate the transition, including products and services that support climate change mitigation: The energy sector is going through significant transformation, driven primarily by investment in transition technologies. QBE recognises the opportunity to support this change through enhancing existing capabilities, complementing the Sustainable Energies Unit. During 2026, QBE will work to establish an implementation plan for scaling this opportunity with initial efforts focusing on renewable power generation given its broad relevance across QBE's portfolio. QBE will also explore opportunities to accelerate and expand its role in the growth of new technologies and extend global reach through growing existing underwriting, deploying new products and services, and enhancing underwriting and risk-engineering expertise across global teams. Details of the implementation plan will be finalised in 2026. Dependencies: The growth potential for insurance solutions that support the climate transition depends on the availability, effectiveness, and future scale of transition technologies. The commercial and economic viability of insuring transition technologies remains subject to uncertainty due to the emerging nature of these markets.

Continuing to embed our positions on energy sectors into underwriting appetite, implementing our assessment of in-scope customers' transition maturity: Since 2019, QBE has embedded its thermal coal position into underwriting, and since 2022, has applied its Environmental & Social Risk Framework to manage key environmental and social risks. QBE's positions include exclusions and enhanced due diligence requirements for fossil fuel sectors including thermal coal, oil, gas, oil sands and Arctic drilling. These positions are reviewed biennially, with refreshed positions to take effect from 1 January 2026. In 2026, QBE will commence the roll-out of the customer transition maturity assessment process for in-scope customers. The assessment will consider customers' emissions performance and, where relevant, additional factors such as decarbonisation goals. QBE will engage with customers assessed as low transition maturity and/or their brokers, and reassess these customers annually. If after three years the customer continues to be assessed as low maturity, QBE will consider if there are justifications for the customer's position and decide whether to decline or continue to provide insurance services. The assessment will be rolled out in phases, starting with the top 50 in-scope customers by gross written premium. In-scope customers are: (i) oil and gas customers who generate >60% revenue from oil and gas extraction (threshold reduced to >30% from 1 January 2040); and (ii) customers who generate >30% revenue from oil sands and Arctic drilling.

Deepening our understanding of higher-emitting portfolios to better understand our transition risks and identify opportunities to support customers' transition: QBE is prioritising the analysis of the current and forecast GHG emissions intensity of selected high-emitting portfolios, including analysis of the levers available to the sector to accelerate decarbonisation, implemented through a phased approach based on materiality of emissions, feasibility of measurement and level of QBE's influence. Levers available depend on the pace and scale of transition technology deployment, enabling government measures, and customers developing and implementing credible transition plans.

Customer engagement activities in 2025: Since 2023, QBE has set a target to engage annually with at least 50 priority customers, which it continued to achieve in 2025. Engagement activities included monitoring the priority customers cohort; reviewing public disclosures against recognised climate disclosure frameworks; engaging with priority customers at renewal in collaboration with brokers; and monitoring customer emissions and disclosure developments. Information collected is not used to determine individual customer premiums.

Key actions and dependencies - Investments

Financing the transition through investment in climate solutions: QBE has set a target to allocate at least $200 million to climate solutions investments annually from 2026 through to 2030, guided by defined climate solutions criteria and the same return and risk appetite standards applied across the broader investment portfolio. Dependency: sufficient and ongoing supply of eligible climate solution investments.

Continuing to incorporate climate risk and decarbonisation pathways into investment due diligence for in-house managed corporate issuers and external managers: Credit assessments and due diligence include consideration of emissions intensity, climate risks, and alignment with net-zero pathways, progressively embedding new datasets and scenario insights.

Continuing to engage with our highest corporate emitters and external managers: QBE will engage annually with the top 20 corporate issuers by Scope 1 and 2 carbon intensity based on enterprise value including cash (EVIC) in in-house managed investment grade corporate credit and high yield portfolios, as well as external managers as part of the annual due diligence process, to gather insights on emissions, climate risks, net-zero alignment and planned improvements. QBE will not make individual investment and divestment decisions solely on the basis of transition maturity.

Monitoring the carbon intensity of our public corporate debt portfolio: QBE has set a target to limit the Scope 1 and 2 WACI of its public corporate debt portfolio to 20% below the WACI of its market benchmark, expanding scope to encompass high yield debt and emerging market debt. Investment selection excludes issuers in thermal coal and oil and gas sectors, in accordance with QBE's Environmental & Social Risk Framework.

Advancing the climate alignment of our portfolio: In 2026, QBE will baseline the net-zero alignment of its investment portfolio and consider whether to formalise an alignment target.

Key actions and dependencies - Operations and supply chain

Taking actions to decarbonise our operations: Planned decarbonisation initiatives focus on phasing out gas heating and progressing energy-efficiency upgrades in owned and leased offices, as well as maintaining renewable electricity sourcing; transitioning fleet vehicles to more fuel-efficient alternatives including hybrid options; and limiting air travel emissions. Priority is placed on reducing in-scope emissions. Carbon removal certificates will be sourced to neutralise emissions that remain after implementing reduction measures. The cost of emissions reduction initiatives, carbon avoidance and removal certificates and renewable electricity certificates will be funded through QBE's internal carbon price mechanism. Dependencies include cooperation from landlords, fleet transition feasibility, and ongoing availability of high-quality renewable energy contracts and certificates.

Embedding emissions reduction measures into our supply chain: QBE has introduced a target for 70% of global strategic suppliers to have publicly defined emissions reduction targets by the end of 2030. QBE will engage strategic suppliers through tailored outreach and capability-building resources, embed sustainability considerations into sourcing and supplier management processes, and pursue collaboration and knowledge sharing with suppliers that have established commitments.

Advocating to build climate resilience: Our own analysis of QBE's climate resilience has deepened understanding of the complex challenges climate change poses to communities and customers. Building greater resilience requires a collaborative effort across a broad network, including governments, regulators, communities, the financial sector, and other key stakeholders. Through industry memberships, QBE advocates for stronger community resilience measures, more effective climate-related policy settings and industry guidance. QBE also engages with trade associations and industry bodies to progress initiatives that support climate resilience.

Progress against previous targets

In 2021, QBE established interim targets for 2025, progress on which is disclosed in the 'Metrics and targets' section. This year, QBE has revised the scope of its ambition and updated associated targets, which will take effect from 2026.

Capital deployed towards climate-related risks and opportunities

Climate-related risks and opportunities are managed as part of business-as-usual activities and are resourced through existing budgets across the Group. Other than investments in climate solutions, the Group did not identify material direct expenditure attributable solely to the delivery of climate-related initiatives during the reporting period.

Current financial effects

Physical risk: In 2025, net catastrophe claims of $751 million were below the Group's allowance of $1,160 million. Net catastrophe claims included $715 million attributable to climate-related natural events, such as the Californian Wildfires, Hurricane Melissa and a series of storms and floods in Australia, including Cyclone Alfred.

Transition risk (underwriting): There were no identifiable transition-specific impacts in the current period for either the Marine, Energy & Aviation product segment or the Group's gross written premium more broadly. Group premium movements primarily reflected targeted organic growth and the lower strain from exited lines.

Transition risk (investment): There were no specifically identifiable transition-related impacts on the Group's investment assets or investment performance in the current reporting period.

Opportunities - climate solutions investments: The carrying value of the Group's investments at 31 December 2025 included $2,359 million of climate solutions investments which represented 7% of QBE's total assets under management.

Opportunities - growth: The climate-related opportunities identified did not have a material effect on the Group's financial position, financial performance or cash flows in the current period.

Anticipated financial effects

Physical risk: Short-term claims volatility is expected to continue to be influenced by natural variability in weather and catastrophe activity, in addition to the effects of climate change. In the short term, potential impacts of physical risks are incorporated into the Group's business planning process, primarily through the catastrophe allowance, and implicitly considered in other planning assumptions relating to premium rates and reinsurance, but are not separately identifiable from other factors. The Group's net catastrophe allowance for 2026 is set at $1,130 million. Plan net catastrophe claims as a percentage of net insurance revenue is not expected to change materially from 2026 levels over the three-year plan period. Scenario analysis of property exposures indicates that under the RCP4.5 pathway, the increase in catastrophe AAL before reinsurance due to climate change across key peril regions is not currently expected to be significant by 2030, and is not expected to result in claims costs that materially exceed the Group's catastrophe allowance on an annualised basis. Over the long term, the financial effects of physical climate risks are expected to become more significant, with a projected increase in gross AAL of around 20% at the Group level by 2090 under the RCP4.5 pathway.

Transition risk (underwriting): Analysis of medium to long-term transition risk was focused on lines of business with the most significant exposures to transition-sensitive sectors. Current available data does not support the reliable quantification of transition-specific effects; work underway to improve sectoral mapping and data quality is expected to enable more detailed analysis over time. In scenarios where decarbonisation accelerates, customers in carbon-intensive industries such as oil and gas extraction and certain transport segments are expected to face higher compliance costs, technology investment requirements and, in some cases, stranded asset risk. These pressures could influence premium volumes and claims experience of exposed product lines, with possible resulting impacts to the Group's insurance operating result and net insurance contract liabilities. In a delayed transition pathway, these effects are expected to be deferred but more concentrated post-2030. QBE's exposures are expected to be mitigated by a considered approach to customer selection and engagement, ongoing demand for coverage, portfolio agility and underwriting discipline.

Transition risk (investment): At a total investments level, the anticipated financial effects of transition risk are expected to be limited based on the current portfolio mix, investment strategy and policies. No material anticipated financial impacts are expected from transition risk in infrastructure assets, as these exposures are actively considered and managed by external managers. While scenario analysis indicates that certain industries and issuers within passively held developed and emerging market equity portfolios may experience more significant climate-adjusted value changes under a Net Zero 2050 scenario, the overall impact is mitigated by the diversified nature of these investments.

Opportunities - climate solutions investments: Effective from 2026, QBE has set a target to invest $200 million in climate solutions annually through to 2030. The financial effects of these investments will be reflected over time through investment income and the composition of assets under management. At this stage, QBE does not expect the returns generated by these investments to be materially different from those of other equivalent assets from the same issuer, as all investments are selected in line with QBE's investment return and risk appetite criteria.

Opportunities - growth: QBE has applied the exemption permitted by AASB S2 and has not disclosed information about the anticipated financial effects of growth opportunities driven by market and technology shifts, as they are considered commercially sensitive.

QBE undertakes scenario analysis to further understanding of the impacts of climate risks and opportunities and the resilience of the Group's strategy to climate-related changes, developments and uncertainties.

Physical risks - scenario analysis (underwriting)

Scope of assessment: QBE has undertaken physical climate risk modelling of its property exposures across key perils and geographic regions where the Group has material catastrophe exposure. These comprise hurricanes and cyclones in the North Atlantic and Australia; convective storms in the United States and Australia; windstorms in Europe; floods in the United States, Australia and Europe; bushfires in Australia; and wildfires in the United States. The scope was determined through a risk-based assessment that prioritised the top peril-region exposures based on their contribution to the Group's AAL. Collectively, the modelled exposures account for over 90% of QBE's non-earthquake catastrophe AAL. The analysis projects gross AAL (before reinsurance) to provide a pre-mitigation view of potential losses.

Scenarios: Representative Concentration Pathways (RCPs) sourced from the IPCC Fifth Assessment Report (AR5) and Shared Socio-economic Pathways (SSPs) sourced from the IPCC Sixth Assessment Report (AR6): SSP1-1.9 aligns with a pathway that limits warming to around 1.5°C; RCP4.5 reflects a stabilisation scenario with warming of approximately 2.5–3°C; RCP8.5 represents a high-emissions pathway with warming exceeding 4°C by 2100.

Time horizons: 2030, 2050 and 2090.

Key assumptions: The analysis assumes constant exposure over time to attribute changes in modelled losses specifically to climate change, meaning no adjustments are made for changes in population, mitigation measures, building standards or portfolio mix. Assumptions are primarily derived from IPCC AR5 and AR6, operationalised through catastrophe models and commissioned scientific research, incorporating assumptions about global climate policy ambition, macroeconomic trends, energy demand and mix, and pace of technological innovation, translated into regional hazard impacts using peril-specific assumptions from vendor catastrophe models and scientific literature. For example: in Australia, rainfall projections are based on the 2024 Australian Rainfall and Runoff Guidelines, while hailstorm frequency and severity is projected using QBE commissioned research from the University of New South Wales published in 2025; in Europe, windstorm and flood projections are derived from downscaled regional climate models including the EURO-CORDEX framework; in the United States, wildfire risk is modelled using relationships between Vapor Pressure Deficit and burned area, combined with regional vegetation dynamics and fuel availability.

Reporting period: The analysis was carried out in 2025 using current period in-force exposure data where available. The catastrophe models used incorporated vendor updates available to QBE at the time. In some cases, climate adjustments continue to rely on static studies published in prior years, particularly where updated vendor models are not yet available. QBE reviews its scenario analysis annually and updates inputs when material changes in exposure, model availability or scientific understanding occur.

Our resilience to climate-related physical risks

Scenario analysis indicates that projected increases in AAL across key perils through to 2050 remain within the bounds of normal portfolio variability when annualised at a total Group level. While some perils, such as flood and wildfire in Europe, Australia and the western United States, exhibit greater sensitivity to climate change, their impacts are geographically concentrated and less significant in aggregate. North American hurricane continues to be the most significant physical climate risk exposure for QBE. By 2090, modelled outcomes diverge more significantly. These projections are based on gross exposure and do not account for the mitigating effects of reinsurance or portfolio management actions.

The Group's underwriting strategy is considered resilient to expected changes in physical risk across short, medium and long-term time horizons, supported by a combination of measures that collectively support QBE's ability to adapt to evolving climate conditions and maintain underwriting and capital resilience over time.

Significant areas of uncertainty include the future availability and cost of reinsurance which may affect the Group's ability to transfer risk, and potential market reactions to repricing where affordability constraints could impact demand for insurance in higher-risk regions. To address these uncertainties, QBE continues to explore alternative capital solutions, including the recent launch of a catastrophe bond. QBE recognises that responding to uncertainties in insurance affordability involves engagement across both the public and private sectors to enhance the resilience of customers and communities.

Transition risks - scenario analysis (investment and underwriting)

QBE has applied a combination of quantitative modelling and qualitative assessment to evaluate the potential impacts of climate transition scenarios across its investment and underwriting portfolios.

Investment scope: External modelling platforms were leveraged to assess potential transition risk impacts for selected public asset classes, collectively representing over 80% of the carrying value of the Group's investments, including sovereign and semi-government bonds, corporate bonds, high yield debt, emerging market debt and developed market equities. A qualitative analysis was performed for QBE's infrastructure assets, using scenario pathways supplemented with sector-level research and insights from external investment managers.

Underwriting scope: A qualitative analysis was performed, focused on the Group's Marine, Energy & Aviation portfolio and leveraging the outcomes of sector-level transition impact projections, to assess directional impacts under a range of climate transition pathways.

Scenarios: The following Network for Greening the Financial System (NGFS) transition scenarios were applied: Net Zero 2050, where immediate and coordinated global policy action limits temperature rise to 1.5°C; Delayed Transition, reflecting postponed and fragmented mitigation efforts, resulting in temperature rise to 1.7°C; and Current Policies, a reference scenario based on existing policy settings, resulting in warming of 3°C (used as a baseline in the investment quantitative analysis). These represent a diverse range of plausible transition pathways, including one aligned with the latest international climate agreement.

Time horizons: Investment - 2050; Underwriting - 2030 and 2050.

Key assumptions: Investment - scenario assumptions including projected carbon prices, sector and regional emissions pathways, macroeconomic trends and energy system transitions are primarily sourced from NGFS Phase V. Company-specific data, including financial metrics, business segmentation and GHG emissions, are sourced from public disclosures and market data providers to the extent available; where incomplete, sector and country proxies and modelling assumptions are applied. The qualitative assessment for infrastructure assets is informed by sector exposures and qualitative information provided by external managers. Underwriting - the assessment leverages sector-level transition impact projections performed in 2022, which use scenario assumptions sourced from NGFS Phase II to quantify changes in sector profitability under each scenario. The analysis assumes a static portfolio composition, with no adjustments made for potential changes in business mix, customer transition readiness, or variability in company-level outcomes. Future enhancements are planned to enable more detailed analysis, including improvements in granularity and consistency of underwriting sectoral data and updating scenario inputs.

Reporting period: The analysis was carried out in 2025 and reflects the Group's current period investment exposures and current portfolio mix.

Our resilience to climate-related transition risks

QBE's investments and underwriting strategy are expected to be resilient to climate-related transition risks based on the outcomes of scenario analysis and the Group's current portfolio composition. In relation to investments, the assessment relies on issuer-reported and third-party data which may be subject to limitations relating to the timing and coverage of reported information.

Significant areas of uncertainty considered in the assessment of underwriting resilience include potential affordability constraints in higher-risk segments, and the pace and cost of technological change which increase uncertainty in claims costs. QBE's Transition Plan includes actions that will help mitigate these uncertainties, including strengthening underwriting and risk-engineering capabilities to respond to evolving technologies and loss patterns, phasing in analysis of emissions intensity across selected high-emitting portfolios and implementing an assessment of transition maturity for in-scope oil and gas, oil sands and Arctic drilling customers to inform appetite and engagement. These actions, together with ongoing monitoring through underwriting guidelines and risk assessment frameworks, are expected to support the continued resilience of the underwriting portfolio.