QBE slides after claims blowout prompts split

SHARES in QBE Insurance have tumbled after the group unveiled plans to split its emerging markets business amid a blowout in claims.

The heavyweight insurer announced yesterday that the division would revert into separate operations focuses on the Asia Pacific and Latin America. Emerging markets chief David Fried was stepping down but would “continue to support QBE in a strategic advisory capacity”, QBE said.

The revelation came as QBE posted a net profit of $US345 million ($435 million) for its first half, the six months to June. That tally was up 30.2 per cent on the same period a year earlier after a strong performance in Australia, New Zealand and the US helped offset the claims blowout in its emerging markets business.

QBE also confirmed yesterday that it planned to activate its previously announced $1 billion share buyback this half.

Shares in the group closed down 85¢ or 7.07 per cent to $11.17 yesterday, wiping more than $1.2 billion from the group’s market value.

Group chief executive John Neal said QBE was working to ensure there would be no repeat of the problems in its emerging markets business.

“A detailed review has been undertaken to determine the remediation activities required,” Mr Neal said.

The company declared a partially franked interim dividend of 22¢, compared with a fully franked 21¢ a year ago.