Finance News Network Transcription of QBE Insurance Group Limited (ASX:QBE) Presentation
It was really the result of a couple of years of solid work. There’s been significant re-change of leadership, most of the CEOs of the business units and more recently, the heads of functions. We put in place a new capital plan that raised $1.5 billion in capital. We did underwriting right across the Group, and all of that resulted in more than $1 billion turnaround in profit.
As well as increasing profits, we’ve also tried to reduce volatility in the business. We’ve obviously changed our leadership and got a new team of people in place. We’ve put more re-insurance protection in place; we significantly strengthened our balance sheet. We’ve also sold off some of our business units, notably our Australian and US agency businesses.
But at our heart, we’re an underwriting business; our people are very good at taking underwriting decisions. And to be honest, there’s better people running distribution businesses that they are, that can grow them with a different skill set than what we’ve got.
So the insurance markets around the world are reasonably competitive, now that new capacity that’s come in over the last couple of years has made them more competitive, but not unreasonably so. Some markets in the US have still got small price increases. Markets like here in Australia, have small price decreases.
On the back of increasing the profits in 2014 and forecasting targeting to increase profits again in 2015, we’re also looking to provide dividends as we go forward. The capital we put in place with a stronger balance sheet, higher cash flows and increased profits. Plus also, increased earnings stability that should allow us to grow our dividend, as we go forward.
So what we’re looking to do in 2015 and 2016 is more of the same really. So first and foremost, hit our earnings targets, have some earnings stability, start to grow the top line again. We need to continue to focus, like every company in the world, on efficiency and it’s a reasonably competitive environment to grow in. And all of that should allow us to grow our dividend as well, as we go forward.
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