REPORTING SEASON: QBE Insurance (QBE)
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Figure 1: QBE Insurance 12 month chart
QBE Insurance (QBE) tough start to 2014
· General insurer QBE today released its first half numbers for 2014. QBE posted an 18% fall in Net Profit (slightly better than the 19% that was expected by the market) to US$392Million. QBE’s revenue was also lower, falling by 8%. The biggest hit to QBE’s profit was the already flagged (on 29 July 2014) lift in accident claim reserves in Latin America that totalled US$169Million.
· QBE’s Insurance profit fell by 33% to US$530Million and Gross Written Premium also fell by 10% to US$8.491Billion below QBE’s target of US$8.9Billion, primarily due to the continuation of tough competition and overcapacity in the market. The Australian and New Zealand insurance business was solid but its European division was hit by tough competition and US written premiums down 11%.
· Today QBE informed the market that it is looking at divesting assets so it can focus on its core businesses and maintain its strict underwriting discipline. QBE plans to IPO its LMI unit by 2015 sell off its US agency business and sell some European assets by the end of this quarter.
· QBE has also announced an equity raising, a placement and share purchase plan (SPP) to raise up to US$750Million through a US$600Million institutional placement and SPP to raise US$150Million
· An interim dividend of $0.15 will be paid on the 23rd of September 2014.