* QBE cash profit rises 1 pct, beats estimates
* Insurer unveils A$1 bln buyback plan
* Pricing outlook improving: CEO
(Recasts, adds share price reaction, CEO and analyst comment)
By Jamie Freed
SYDNEY, Feb 27 Australia's No. 1 insurer by
premium income, QBE Insurance Group Ltd, on Monday said
global insurance pricing appeared to have bottomed as it
announced plans to buy back up to A$1 billion ($767 million) of
shares over the next three years.
The insurer, which generates almost three-quarters of its
premiums abroad, posted a better-than-expected 1 percent rise in
full-year cash profit as it lifted prices in Australia and New
Zealand and better managed claims.
Global insurance premiums had fallen over the past few
years, with increased competition driving down prices and
lowering QBE's returns.
However, QBE Chief Executive John Neal told analysts prices
were expected to be broadly flat this year in most markets, and
higher in Australia as rivals responded to higher claims costs
and lower investment returns.
“For the first time in a long while we are showing some
modest growth in the top line," he said in reference to a 2
percent rise in gross written premiums to $14.1 billion adjusted
for currency changes, the first increase since 2010.
QBE shares rose as much as 8 percent to the highest level in
15 months in a relatively flat market.
“At long last QBE has delivered a strong result after
several years of disappointment," Morningstar analyst David
Cash profit after tax increased to $898 million in the 12
months to Dec. 31 compared with $893 million a year ago, 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.
Under Neal's leadership, 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
Signalling its commitment to good governance, the company
said Neal's short-term bonus had been cut by 20 percent, or
A$552,000, due to "recent personal decisions" which were not
consistent with the board's expectations.
Neal said he had not disclosed a personal relationship to
the QBE board immediately as required by the company's code of
conduct. He declined to elaborate.
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)