news on qbe?, page-71

Agreed, the steep rise in premiums will show through in higher profits in 2012 and beyond, baring another repeat of 2011 in terms of natural disasters.

Let's look at the facts:
Prior to the disastrous 2011 for insurers, the post GFC low for QBE was around $15 and high around $25 (pre-GFC the high was over $35). It's the impact of the natural disasters and historically low bond yields of 2011 which pushed the QBE profit down so low. QBE management has cut back its exposure to some of the higher risk parts of business, the bond yields in the US are starting to rise, and 2012 is looking like having an more-or-less average year from claims perspective, so QBE could make a killing!

We may be getting a small correction now after a decent rise over the last few weeks, but we need to see this rise in the context of a steep fall from post-GFC high of $25. And on the way down there had also been an extended support in the mid2010-to-mid2011 period at around $17 level, before the reality of 2011 disasters caught up with QBE profit.

If events continue to support current expectations...(ie. natural disasters at average levels and bond yields in the US continuing to rise), then IMHO the SP will go up a long way yet, albeit with some small corrections along the way.