Accaeric, you have to remember that this is an INSURANCE...

Accaeric, you have to remember that this is an INSURANCE company. Insurance company receives their Cash up front, and pay their claims in certain cases years afterward ( long tail risk).

The time gap between the receipt of cash and payment of cash creates what is called a "float" and thus technically an insurance company needs no debt, although in qbe case it has 5 billions of debt because of past acquisitions which now flops and still have to be paid back with interest.

What you said that cash does not lie is true for normal companies with positive weighted average cost of capital. For qbe, cash receipt is merely the equivalent of bank deposit, not final revenue. It will eventually have to be paid back to policy holders when catastrophes happen.

If a sandy class cat happen in next few months, this company willl seriously be in deep s.h.i.t