Daily Insurance Industry News
 
 
Daily Insurance Industry News
Thursday 15th of November 2018
November 27, 2008

QBE sees rich pickings in financial turmoil

by David Masters

Story link: QBE sees rich pickings in financial turmoil

QBE Insurance Group Ltd, Australia’s biggest insurer by premium income, has announced the acquisition of ZC Sterling Corp, a US-based underwriting agency, for $575 million.

QBE also said that it plans to acquire three other underwriting agencies, including two in the US and one in Europe.

Capital to fund the acquisitions – and to shore up the company’s capital – is being raised through AUS$2 billion ($1.3 billion) in share sales.

Analyst Greg Bundy said QBE is taking advantage of having a ‘strong hand’ at the moment.

According to Bundy, QBE is making acquisitions at the best possible time.

The US insurance market is ‘ripe for the picking’ having been rescued by the US government.

QBE – which makes most of its money overseas – has boosted its revenue forecasts over the next two years following the acquisitions.

In addition, the weak Australian dollar has helped to enhance the company’s revenue projections.

Changes in the exchange rate have allowed QBE to increase its 2009 revenue predictions by 25% compared to 2008 projections.

Gross written premiums for 2008 are projected at AUS$13.3 billion, expected to increase to AUS$16.5 billion in 2009.

 

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