Ann: QBE update on 2017 performance, page-20

The market seems concerned about the governance, risk and compliance again, risk ratios and emerging markets risk, especially the Shaw Stockbroking dude, see below. Probably a buy, I would not expect to go lower than the mid 11's say $11.50 AUD and the SP should probably in the high $12s perhaps back to the shallow $13s IMHO but pls DYOR. Article below:
QBE shares dive as it downgrades profits on higher claims in emerging markets

• Clancy Yeates

QBE Group's half-year profits are set to take a hit from higher claims than it had budgeted for in its emerging markets businesses.
The insurance group's shares dropped 7.4 per cent early trade on Wednesday, after it warned its emerging markets division had experienced "significantly higher" claims in the first five months of its financial year.

QBE chief executive John Neal highlighted the stronger underwriting performance in Austraila, New Zealand and North America. Photo: Louise Kennerley
Although its larger divisions were on track to deliver in line with its expectations, it flagged higher costs from more frequent claims in Asia, and weather-related insurance claims and "legacy portfolios" in Latin America.
These higher costs were likely to raise its combined operating ratio - losses as a share of premium revenue - to 94.5 per cent to 96 per cent, up from 93.2 per cent in the 2016 full year.
The ratio is an important measure of profitability from insurance underwriting.

An analyst at Shaw Stockbroking, David Spotswood, noted the group had in recent years disappointed the market with profit downgrades on several occasions, and the latest news would not help its efforts to turn around the negative perception towards the stock among some investors.
"We think it's about a 6 per cent profit downgrade," Mr Spotswood said.
Chief executive John Neal highlighted the better performance in its more significant divisions, but also acknowledged the weaker performance in its emerging markets businesses.
"We are encouraged by the improvement in the combined operating ratio in Australia & New Zealand as well as North America while Europe continues to perform well," he said in a statement.
"Nonetheless, heightened claims activity in our Emerging Markets division will increase the group's interim and FY17 combined operating ratio by around 1 per cent."
QBE will report half-year results on August 17.