Insurer QBE said profits could be cut by between AUD50m ($36m) and AUD100m in 2019 because of an increased allowance for large individual risk and catastrophe claims which could range between AUD1.2bn to AUD1.4bn. The company said, however, a AUD130m cost-cutting programme will help its underwriting operations maintain profitability. “While the impact on earnings is likely to vary across our businesses, we expect this reduction to result in lower profit margins over time as costs are reduced or offset against higher premiums,” chief executive Shaw and Partners analyst Brett Le Mesurier said the QBE announcement looks like another such downgrade. While he backed the firm’s decision to sell non-core businesses, Le Mesurier said the remainder still showed the firm lacking a competitive advantage in the most important markets.
Insurer QBE said profits could be cut by between AUD50m ($36m) and AUD100m in 2019 because of an increased allowance for large individual risk and catastrophe claims which could range between AUD1.2bn to AUD1.4bn. The company said, however, a AUD130m cost-cutting programme will help its underwriting operations maintain profitability. The firm had already announced a series of profit downgrades. Shaw and Partners analyst Brett Le Mesurier said the QBE announcement looks like another such downgrade. While he backed the firm’s decision to sell non-core businesses, Le Mesurier said the remainder still showed the firm lacking a competitive advantage in the most important markets.