$US1.2 billion loss for QBE on catastrophe claims

Australian insurance giant QBE is now expecting to report a full-year after tax loss of $US1.2 billion.

CEO, Pat Regan said in a statement to the ASX, “This has been a challenging year for QBE, reflecting an unprecedented cost of catastrophes as well as the particularly disappointing deterioration of our emerging markets businesses.”

QBE will report its full-year results on February 26 and said significant weather catastrophes including Californian wildfires and December storms in Australia during the fourth quarter, coupled with some adverse development of Hurricane Maria, added around $US130 million to the net cost of catastrophes.

This comes after company in October said it would take a $US600 million hit to its annual earnings following the impact of Hurricanes Harvey, Irma and Maria and the earthquakes in Mexico.

Regan said, “Over the last few months, I have been conducting a detailed review of our operations. We have some businesses with strong market positions that are performing well but we also have businesses that are underperforming.”

The company is undertaking a program to improve “consistency,” and and conducting a strategic review of its troubled Latin American operations. QBE also warned the market that four out of six of its divisions would also be unprofitable with COR’s over 100.

These are North America, Asia Pacific, Latin America and Equator Re. Australia and News Zealand and Europe are indicated to have  COR’s below 100.

The $US1.2 billion after tax loss was attributed to fallout from the reduction in the US corporate tax rate to 21 per cent.