qbe it is time to arise, page-9

Hey Pez,

Im just ur avg joe blo - we're all here to earn a quid or two. been around the block so not fond of unjustified ramping esp for the novices out there. Respect ur comments, but still think those targets are unrealistic.

Most on this forum talk the yield play - never disagreed, but will 1-2% really lift the share price 50%+??

when u strip any stock down, esp the ones with P/E > 30, some >60. these are the companies that deserve them. mkts arent fickle - they punish poor perf, yes occassional they get it wrong, but most times with the large caps - its spot on.

lets look at facts:
gwp has shrunk 23% since the 2012 peak, NEP worse. at the same time, COR has climbed UP 8%, with expenses and commission higher than most peers, esp international players.
business model needs fixing, so agree, if that formula can be fixed - like u say, plenty of low hanging fruit - but can they do it? Thats not clear to me.
-They are winding back operations everywhere - so where is the growth?
-"fixing" operations costs $$$, stated this before - again, compounded by the geo spread & complexity
- challenging item - pricing risk when historical experience no longer provides certainty in a rapidly changing world.
- paying more out to reinsure, further narrowing margins.

so yes agree - they are screaming out for yields to improve and 1-2% will come as a most welcome relief, but this will only provide temp relief and will not remedy the underlying issues.
QBE spread themselves too thin and took minor, irrelevant mkt shares scattered across the continents in regions they had little business investing in. They encountered fraud in latin america, internally & externally, dodgy experience in asia - and these were pegged as the "growth" engines. So where will the new growth will come from?? what is the wonder boy's "growth" strategy - sorry i forgot, pocket $$m a year waiting for yields to tick up...and earn his perf bonus based on ANZ results!

yield play is all well and good, but share prices should mimic the inherent value + future GROWTH potential. prior mngt focus on growth was via acquisition - grow or die. It failed, hindsight is a @#! but thats where it is. Tagged on so much and ignored the vital core of integration n synergy. They lost oversight and control, now stripping it back to basics at yet again a further cost to s/h.

fact is GWP will continue to shrink - a stubborn COR will compound this impact. The profitable ANZ and EO ops have experienced deteriorating COR for every year since 2012 matched to the massive decline in GWP. "unprofitable portfolios" will continue to be shed, and claims experience will be volatile. Havent even touched on industry pressure nor regulation.

US$8bn combined ANZ+ EO GWP with ~mid 90's COR (stripping all other div out) with no growth, lower margins and low yields doesn't scream buy to me at a $20bn++ mkt cap?

as mentioned I have exposure via derivatives which I believe offer minimal downside but all the upside. I'll be happy with $11-12.

gltah