Big general insurer QBE has sold its Latin American operations to Zurich as it confirmed its negative January forecast by reporting a statutory full-year net loss after tax of $1,249 million.
The big insurer told the Australian Securities Exchange (ASX) that the results were consistent with the company’s forecast in January and reflected the record cost of catastrophes in the second half of last year together with a deterioration in the emerging markets businesses and two significant non-cash items.
“Notwithstanding our comprehensive reinsurance protections, the net cost of catastrophes for QBE (after reinsurance) was $1,227 million in 2017 compared with $439 million in 2016,” the company said.
The company declared a final dividend for 2017 of four cents per share fully franked, noting that its dividend policy was designed to ensure that it rewarded shareholders relative to cash profit while maintaining sufficient capital for future investment and growth of the business.
The result saw the company commit to what it described as “an accelerated reshaping of the group to create a stronger and simpler QBE”.
In doing so it set out seven objectives including reducing complexity across the business, further repositioning the North American Operations and remediating Asia.
The company told the ASX it had entered into agreements with Zurich Insurance Group for the sale of its operations in Argentina, Brazil, Colombia, Ecuador and Mexico for around $409 million generating a profit on the sale before tax of around $100 million.
QBE Group chief executive, Pat Regan said the decision to exit Latin America was consistent with its focus on simplifying the Group and reducing risk.