QBE Insurance Seeing Higher Claims in Emerging Markets
MELBOURNE, Australia--QBE Insurance Ltd. (QBE.AU) warned its operations in emerging markets experienced significantly higher-than-expected claims in the early part of the year, although its three largest divisions remained on track.
The heightened claims in the first five months of the year were due to a combination of increased frequency in medium-sized risk claims in Asia, weather-related claims in Latin America and an adverse experience in its legacy operations in Latin America, it said Wednesday.
The rise in claims was expected to add about 1 percentage point to the insurer's combined operating ratio--a measure of profitability used by the industry that combines claims, commission and expense ratios--and bring it to between 94.5% and 96% for the first half and the full year, QBE said.
QBE, one of the world's largest insurance and reinsurance companies based on net earned premium, said its premium income was consistent with earlier targets and in line with expectations, and its interim investment return was currently above expectations.
That was likely to mean a half-year insurance profit margin of 8.5%-9.5%.
Chief Executive John Neal said the insurer was encouraged by improvements in the combined operating ratio in Australia and New Zealand, as well as in North America, while its European operations continued to perform well.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
June 20, 2017 19:36 ET (23:36 GMT)