Insurance giant QBE expects to post an after tax loss of about $1.2 billion for the full year to December, reflecting increased payouts for disasters and a loss of tax credits in the US.
The loss, to be announced on February 26, is driven by higher payouts from weather-related events globally and to underperforming emerging markets businesses.
The company was hit by “significant” catastrophes in the December quarter, including Californian wildfires and December storms in Australia, coupled with Hurricane Maria. Combined they added $130 million in costs.
In early trade, QBE shares were down 3% to $10.17.
QBE in June last year issued a warning about higher than expected claims from its emerging markets business.
The company has also recalculated the value of North American goodwill, meaning an impairment charge of around $700 million.
And the Trump administration’s reduction in the US corporate tax rate to 21% means a $230 million write down of deferred tax assets in North American.
CEO Pat Regan, who replaced John Neal this month, has started a detailed review of operations.
“This has been a challenging year for QBE, reflecting an unprecedented cost of catastrophes as well as the particularly disappointing deterioration in our emerging markets businesses,” says Regan.
“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.
“We have commenced a comprehensive program of work to improve both the level and consistency of performance.”
QBE in August posted an interim half year profit of $345 million, up 30% from the same time last year and broadly in line with expectations.
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