A Member of the QBE Insurance Group

QBE Insurance Group Limited ABN 28 008 485 014

Head Office 82 Pitt Street SYDNEY NSW 2000 Australia

Postal Address Box 82 GPO SYDNEY 2001 Telephone: +61 (2) 9375 4444 Facsimile: +61 (2) 9231 6104 DX 10171, Sydney Stock Exchange

15 August 2012 The Manager Company Announcements ASX Limited Level 6 Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, QBE announces Group Chief Executive Officer Frank O ’Halloran’s exit arrangements Please find attached an announcement for release to the market. Yours faithfully,

Duncan Ramsay Company Secretary Att.

MARKET RELEASE 15 August 2012

QBE ANNOUNCES GROUP CHIEF EXECUTIVE OFFICER

FRANK O’HALLORAN’S EXIT ARRANGEMENTS QBE today announced the exit arrangements for outgoing Group Chief Executive Officer,

Frank O’Halloran, who will be leaving on 17 August 2012.

The arrangements recognise Mr O’Halloran’s contractual entitlements previously disclosed

to shareholders and reflect his statutory entitlements accrued over the period since he

joined QBE in 1976.

Belinda Hutchinson AM, QBE’s Chairman said: “Frank’s passion for QBE is truly unique.

We wish him the very best for the future after 36 years with the company and 14 and a half

years as Group Chief Executive Officer. His unswerving commitment and loyalty to QBE’s

shareholders and leadership of our people has been the cornerstone of QBE’s success over

his tenure.”

John Neal, QBE’s Group Chief Executive Officer elect, responded: “Frank has been one of

the outstanding insurance leaders of his generation. He leaves QBE well positioned for

further success in the global non-life insurance and reinsurance market places. We remain

grateful for the mentoring he has provided to QBE’s future leaders.”

For further information, please contact:

Investor Relations QBE Insurance Group Limited Tel: +61 2 9375 4636 ABN 28 008 485 014 investor.relations@qbe.com 82 Pitt Street SYDNEY NSW 2000 Australia Media Enquiries Francine McMullen www.qbe.com Group Head of Corporate Communications Tel: +61 (0) 412 223 485

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MARKET RELEASE 15 August 2012

DETAILS OF EXIT ARRANGEMENTS – F M O’HALLORAN

QBE’s 2012 remuneration report (due for release in February 2013) will provide full information on the various payments in connection with Mr O’Halloran’s past service. As previously announced by QBE, Mr O’Halloran has a three year non-compete agreement post-retirement. This non-compete will run until 1 September 2015. Also as part of his exit arrangements, Mr O’Halloran has agreed to consult on various subsidiary company matters, due to his longstanding involvement in them, for reasonable expenses until 31 December 2012. In summary, the payments relating to Mr O’Halloran’s exit are: 1. Salary up to 28 August 2012

Although Mr O’Halloran will cease being a director of all companies in the QBE Group on 17 August 2012, he will remain an employee until 28 August 2012 in order to formally serve out his six months’ notice. Accordingly, he will continue to receive his current fixed remuneration.

2. Payable on 28 August 2012 These comprise: (a) statutory entitlements (accrued holiday and long service leave); (b) 2012 pro rata short term incentive cash bonus; (c) 2012 pro rata deferred equity award (cash in lieu of conditional rights to QBE

shares); (d) early release due to retirement of previous years’ conditional rights (being 137,253

QBE shares, including 50% of Mr O’Halloran’s 2010 deferred equity award); and (e) 253,186 unexercised options over QBE shares which will vest. These options

currently have a zero value but will remain open for 12 months and will lapse on 28 August 2013.

Items (a) to (c) have an indicative value of A$4.5m gross. However, the final values of items 2(b) and (c) are subject to QBE finalising its 2012 half-year results (which are due for release to ASX on 17 August 2012).

3. March 2013

Retirement allowance of A$2,340,000 gross (equal to one year of his current annual fixed remuneration).

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MARKET RELEASE 15 August 2012

This retirement allowance was advised to ASX on 1 April 2009 and disclosed in subsequent annual reports. The Board will seek shareholder approval at the 2013 AGM (scheduled for 27 March). Effective 31 March 2009, Mr O’Halloran voluntarily elected to reduce his retirement allowance to the lump sum payment above (his previous arrangement was a lump sum payment of 150% of his total remuneration cost being his annual base salary plus his short term cash incentive for the year prior to the date of his retirement).

4. April 2016 to April 2018 Pursuant to their terms, 50% of Mr O’Halloran’s 2010 deferred equity award (i.e. 24,137 conditional rights to QBE shares) will vest on 4 April 2016. In addition, five year long-term incentive awards (conditional rights) granted from 2010 to 2012 will continue, subject to their original conditions. These conditions are subject to QBE achieving future performance hurdles, namely: (a) 50% of the award allocation will be contingent on QBE’s diluted earnings per share

increasing by a compound average 7.5% per annum over the five year vesting period; and

(b) 50% of the award allocation will be contingent on QBE’s average return on equity and combined operating ratio being in the top 10% of the top 50 largest insurers and reinsurers as measured by net earned premium for the five year vesting period.

The value of this item depends upon QBE’s share price.