(Corrects buyback figure in headline, first paragraph)
SYDNEY Feb 27 Australia's No. 1 insurer by
premium income, QBE Insurance Group Ltd, on Monday said
it would buy back up to A$1 billion ($767 million) of shares
over the next three years to return surplus cash to investors
after it posted a better-than-expected 1 percent rise in
full-year cash profit.
Cash profit after tax increased to $898 million in the 12
months to Dec. 31 compared with $893 million a year ago as the
company lifted prices and managed claims better, beating a $769
million forecast of 13 analysts polled by Thomson Reuters
I/B/E/S. Adjusted for currency changes, cash profit was 12
percent higher than a year ago.
The insurer, which generates almost three-quarters of its
premiums abroad, said it expected the market would remain
challenging in 2017 though there were indications of a modest
"The rate of decline in global pricing is easing and, while
there is a variation between markets, we anticipate that pricing
in markets other than Australia will be broadly flat in 2017,"
the company said in a statement.
Gross written premium decreased 2 percent to $14.1 billion,
meeting the upper end of its target of between $13.7 billion and
$14.1 billion, which was lowered at its half-year results.
The company said gross written premium was expected to
remain "relatively stable" this year given a competitive pricing
environment and exchange rate volatility. The insurance profit
margin of 9.7 percent was near the top end of guidance of 8.5
percent to 10 percent.
QBE has been taking steps to boost earnings and reinstate
investor confidence after years of underperformance. Those
efforts include cutting costs, putting in place a comprehensive
re-insurance plan, changing key management teams and selling
non-core or underperforming businesses.
Reuters in January reported that Germany's Allianz
had made an informal takeover approach to QBE but had not named
a price, according to sources.
However, on Feb. 17, Allianz played down talk of it making a
major acquisition any time soon.
QBE lifted its final dividend by 10 percent to A$0.33 a
share, 50 percent franked.
($1 = 1.3031 Australian dollars)
(Reporting by Jamie Freed; Editing by Stephen Coates and Alan