QBE crashes into the red with $1.2bn loss as hurricanes take their toll

Oliver Gill
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Hurricane Harvey Slams Into Texas Gulf Coast
QBE sold its Latin American arm to Zurich for $409m (Source: Getty)

QBE profits dried up in 2017 as the cost of a string of natural catastrophes took its toll across many of the Australian insurance giant's geographical divisions.

The insurer posted losses of $1.25bn (£0.9bn) compared with profits of $844m in 2016.

North American operations were "heavily impacted" by the fallout from hurricanes Harvey, Irma and Maria and the Californian wildfires. European returns were strong despite "difficult trading conditions" and exposure to the catastrophes.

Asia Pacific trading was labelled "unacceptable" – combined ratios, the proportion of costs and losses to premiums, leapt from 95.6 per cent to 115.5 per cent.

Profits were also hurt by a $700m investment write-down of its North American arm and the loss of a $230m deferred tax asset following US President Donald Trump's controversial tax overhaul.

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It was announced last night QBE has sold its Latin American business to Zurich for $409m. QBE said it expects a pre-tax profit of around $100m from the sale.

“The decision to exit Latin America is consistent with our focus on simplifying the group, reducing risk and improving the consistency of our results," said QBE chief executive Pat Regan.

"Following a detailed review of our Latin American operations, we determined that QBE was no longer the best strategic owner of these businesses. Zurich has a significant presence in Latin America and a strong commitment to the region. Following the completion of the sale, we look forward to cooperating with Zurich to service the needs of our multinational customers operating in Latin America."

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