QBE Insurance Group Ltd. (QBE), Australia’s biggest insurer, said full-year profit missed forecasts as it wrote down the value of its U.S. units and costs swelled for prior year claims.
Net income in the full-year to Dec. 31 rose 8 percent to $761 million from $704 million a year earlier, Sydney-based QBE said in a statement today. That compared with a median forecast of nine analysts surveyed by Bloomberg for a profit of $884 million and QBE’s guidance of more than $820 million.
While catastrophe claims declined and returns on investments rose, QBE said this was offset by $464 million of adverse prior accident year claims and increased risk margins. The company wrote down brands, distribution channels and licenses on restructured businesses in the U.S. and said it took a “more cautious view on future cash flows for recent acquisitions.”
The company forecast premium rates to increase by 5 percent on average in 2013 and said that it expects an underlying insurance profit margin of 11 percent. Cash profit for 2012 rose 32 percent to $1.04 billion and QBE declared a final dividend of 10 Australian cents a share.
QBE shares have surged 20 percent this year, compared with an 8.8 percent rise for the benchmark S&P/ASX 200 Index.
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