QBE cuts profit margin forecast on Sandy
The warning and fund raising sent shares in QBE down 11 percent to A$11.45 to their lowest level in nearly 10 months.
Australia's top insurer by premium income, QBE said it expected its 2012 insurance profit margin would now come in at about 8 percent. That compares with 12 percent a year earlier and the 10-11 percent projected by analysts after Sandy battered the United States.
Disaster modelling companies expect Sandy caused as much as $20 billion in insured losses, not counting flood damage that could add billions more to the total, hurting insurers just coming off a disastrous 2011 that saw claims from earthquakes, to floods to tsunami.
QBE said its preliminary estimate of retained losses from Sandy could be up to $450 million. It expects full-year net profit before amortisation to come in above $1 billion, up 30 percent on the previous year.
QBE's warning contrasts with rival Allianz and reinsurers Hannover Re and Swiss RE that have maintained their profit forecasts despite the hit from the superstorm. It is frustrating to be reporting disappointing news at a time when the vast majority of our ongoing businesses are performing in line with, or better than, expectations, Chief Executive John Neal said in a statement.
QBE, which has completed more than 75 acquisitions in the past 10 years to expand
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