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QBE flags $US1.2bn FY loss as claims rise

Stuart Condie  |  23 Jan 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] QBE Insurance (ASX: QBE) has flagged a full-year loss of about $US1.2 billion ($A1.5 billion) on almost $US1 billion of one-off costs and blowouts associated with wildfires in California and Hurricane Maria in the Caribbean.

The insurance giant on Tuesday said the devastating US fires and Hurricane Maria--plus December's storms in Australia--had added about $US130 million to its catastrophe costs in the fourth quarter.

The catastrophes increased the full-year combined operating ratio--which measures expense, commission and claims ratios--by about one per cent over the previously estimated target range of 94.5 to 96.0 per cent.

The expected loss for the 12 months to December 31--which compares to 2016's $US844 million profit--also reflects a $US700 million goodwill impairment against QBE's North American business and a $US230 million writedown related to the cut in the US corporate tax rate.

Chief executive Pat Regan also called out another poor performance by QBE's emerging market operations, with a strategic review into its Latin American unit underway as the insurer looks to simplify and reduce risk.

Mr Regan said he will update the market on his plans when QBE announces its results on February 26.

"This has been a challenging year for QBE, reflecting an unprecedented cost of catastrophes as well as the particularly disappointing deterioration in our emerging markets businesses," Mr Regan said.

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QBE shares were 52.5 cents, or 5.0 per cent, lower at $9.965 at 1023 AEDT.

They have lost about 25 per cent of their value since May.

 

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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