QBE's losses from Sandy may hit $US450m
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November 12 2012, 10:08AM
QBE had forecast an insurance profit margin for 2012 of better than 12 per cent, but that has been cut to about eight per cent.
It expects to report a net profit after tax and before amortisation in excess of $US1 billion ($A966.32 million) for the year to December 31, an increase of around 30 per cent from 2011.
QBE said its preliminary estimate of retained losses from superstorm Sandy, which hit the US east coast on October 29, will be in the range of $US350 million ($A338.21 million) to $US450 million ($A434.85 million).
It said it agreed with market commentary that suggests the insured losses from the storm could exceed $US20 billion ($A19.33 billion).
The company's previous insurance profit forecast included an allowance for large individual risk and catastrophe claims of 10.5 per cent of net earned premium for the full year.
It is now expected that large individual risk and catastrophe claims will cost up to 12.0 per cent of net earned premium.
"A combination of comprehensive reinsurance arrangements and catastrophe claims allowances ensures that our businesses are well protected against these types of events," Mr Neal said.
"We anticipate that market pricing will strengthen further post the substantial claims of Superstorm Sandy."