QBE Looks for Further Acquisitions

Submitted by Jim Thesiger on 7 October, 2009 - 05:26

Renowned insurance company QBE Insurance (QBE), that offers all major lines of insurance covers for personal, commercial and specialist risks in Australia, the Americas, the Asia Pacific region and Europe is expecting to see more opportunities of acquisition in the horizon as the company is looking forward to put a strong balance sheet to work. Neil Drabsch, the chief financial officer of the company stated at a JPMorgan investor conference in New York that QBE was cautious with its business due to the uncertainty in the economic conditions. However, the company is expecting to see its growth through an excess capital and liquidity and also with the help of a strong balance sheet.

The company is planning to put more focus on bolt-on portfolios and underwriters to improve its current businesses as a part of its strategy for mergers and acquisitions. In his presentation, Mr. Drabsch mentioned that the premium rates in the Americas were positive to some extent and ahead of the plan. However, the market still remained soft particularly in the commercial lines. The insurance company is planning to go for acquiring those businesses which are expected to start boosting up their earnings per share within a year. It is to be mentioned that QBE announced a 19 percent increase in interim profit from $859 million to $1.02 billion in late August. The company is currently targeting to beat its 2008 annual profit which was $1.86 billion.

At the interim result, chief executive Frank O'Halloran mentioned that although it was not possible for him to make any comment on the possible acquisitions, he was planning to raise the number of targets to be under examination within the year. QBE is expecting to add $1 billion in premium income through its bolt-on purchases across Europe, Asia and Latin America.