Insurer plans global shopping trip
The Age
Friday August 21, 2009
QBE is considering a range of other acquisitions after missing out on buying Europe's Fortis Insurance, whose parent group fell victim to the global financial crisis.The insurance group was eyeing Fortis to add to its expanding European operations, which have developed into the leading underwriter in the Lloyd's of London market.The Dutch Government took ownership of Fortis Insurance in December as part of a state-backed rescue of the debt-laden group. QBE tabled an offer for the Fortis insurance business, a specialist in corporate property, liability and marine cover, but was outbid by British rival, Amlin, which in June agreed to pay ‚350 million ($A600 million).As a consequence, QBE turned its gaze to Australia and three weeks ago tied up the $270 million acquisition of the insurance underwriting and distribution business of Elders.More such deals were on the horizon, QBE chief executive Frank O'Halloran told analysts yesterday after the group's announcement of a 19 per cent rise in half-year profits to a record $1.018 billion."We plan to increase the number [of opportunities] that we are looking at," he said.QBE needs to keep increasing its gross written premium €” its the revenue from providing insurance cover €” to maintain its profit increases.Pre-tax earnings from QBE's US division climbed 50 per cent to become the biggest profit provider in the six months ending June 30.The overall result was 19 per cent up on the insurer's previous first-half result, thanks to a 22 per cent rise in revenue to $8.5 billion, the impact of the weaker Australian dollar and other foreign exchange gains. But the underwriting profit was down $63 million to $664 million because of higher claims costs.Nonetheless, earnings per share rose 6 per cent to 101.4 and helped lift the interim dividend 1 to 62.QBE is forecasting a slight drop in full-year premium income to $15.1 billion.QBE shares rose $1.32, or 6.3 per cent, to $22.06.
© 2009 The Age
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