Before the open this morning QBE released news that it was writing down goodwill in its North American business while increasing claims provisioning in the region.
It all adds up to a swing in net profit for the QBE Insurance Group from $760 million for 2012-13 to an estimated loss of $250 million for the current financial year.
QBE still expects to make a reasonable cash profit of around $850 million but this is also down from last year’s $1.04 billion and the market is not impressed.
Currently trading at $12.59 a share, QBE is down almost 3 dollars from Friday’s close at $15.45., wiping $3.5 billion off its market cap.
At the same time the ASX is down 11 points.
Along with the poor North American financials this morning, QBE told investors that chairman Belinda Hutchinson would retire in March, to be succeeded by non-executive director Marty Becker.
Hutchinson has been chairman since July 2010 and a director of QBE for 16 years.
“The performance of our North American business announced today is deeply disappointing,” she said. “Following the substantial changes we made to our US management team earlier this year, Group CEO John Neal initiated and has led a further review of our North American business.
“I’m confident that the management changes we have made will enable the North American business to return to profitability.
“I expect the Board and management renewal will continue under Marty Becker’s and John Neal’s leadership.”