QBE Insurance, Australia's largest insurer by premium, has been presented with acquisition offers worth $US6 billion ($6.6 billion) since the end of June and is in talks on nine deals, its chief executive said.
QBE, which has made more than 75 acquisitions in 10 years to spread to 49 countries, is eyeing acquisitions in Europe, the United States and Latin America as deals there are not too pricey and still offer value, said Frank O'Halloran.
QBE shares rose as results released by the insurer matched the 40 per cent profit cut flagged by the company last month. The stock ended up 19 cents, or 1.1 per cent, to $17.11 on a flat day for the overall market.
Mr O'Halloran added he preferred unlisted firms and smaller deals as he did not want to be distracted by a prolonged bid-battle, steering away from speculation QBE might be a strong contender for large assets that can be offloaded by European banks and insurers.
O'Holloran seldom engages investment banks to advise on acquisitions and instead prefers to work on the deal with an in-house team, which he leads.
QBE, which has just switched to reporting earnings in US dollars since overseas operations make up 75 per cent of business and half the annual premium is written in US dollars, has no plans to list elsewhere, he said.
"I certainly can't see an overseas listing. We have no difficulties raising money from our current shareholders," he said in an interview.
Profit sinks
QBE's first-half profit declined 39 per cent as the insurer was hit by substantially lower investment income from cash and fixed-income investments.
Net profit was $440 million for the six months to June 30 compared with $720 million in the prior corresponding period, Sydney-based QBE said in a statement.
Gross written premium, which reflects how much business the insurer did, gained 20 per cent to $6.86 billion.
The insurer declared an interim dividend of 62 cents per share, 9.3 per cent franked.
The lower profit was due to cash and fixed interest assets yielding 2.3 per cent, or $US245 million during the first half, rather than four per cent, or $US383 million a year earlier.
The company also experienced equity losses of $US228 million compared with $US102 million the year before. QBE, however, notched foreign exchange gains of $US228 million.
The company's insurance profit gained eight per cent to $US822 million, with the insurance margin declining to 15.7 per cent from 17.5 per cent the previous year.
QBE said international insurance markets continued to be influenced by difficult economic conditions and increased competition.
The company added that the insurance industry had been hit by a higher than normal level of catastrophe claims.
Reuters with AAP
