QBE Insurance Group Ltd
.JPG)
QBE Details
QBE Insurance Group (ASX: QBE) informed on Tuesday in response to a query raised by the Australian Securities Exchange, it was unaware of the impact of losses in its emerging markets division on overall profitability during its annual meeting in early May. It was unaware of losses in emerging markets until a board meeting on 21 June 2017 that the financial condition of each of its global divisions, including the Emerging Markets division, had been clarified and confirmed. Last week, QBE surprised the market with a profit warning as it would report lower than expected earnings due to underwriting losses in its emerging markets division. The company downgraded its overall combined operating ratio to the 94.5% to 96% range, compared with a February guidance of 93.5% to 95%.A higher combined operating ratio translates to lower underwriting profits for insurers. The company forecast interim insurance profit margin to be in the range of 8.5% to 9.5% against 9.7% in 2016.
The stock has decline 12.1% in the last five trading sessions as on 27 June 2017, owing to cut in its FY17 profit guidance. Given the ambiguity around changing patterns of Chinese buyers and impact on company’s financials going forward, we give an “Expensive” recommendation on the stock at the current market price of $ 11.77
QBE Daily chart; (Source: Thomson Reuters)
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