QBE full-year profit slides

North American operations to weigh on insurer, global transformation strategy on track.

QBE Insurance Group (QBE) has posted a steep full-year loss as its North American operations continue to weigh, however the insurer says its global transformation strategy is progressing well.

In the year to December 31, QBE posted a loss of $US254 million, a steep 133% decline on the $US761 million profit posted in the prior year.

QBE said the loss was due to previously reported large one-off costs primarily associated with QBE’s North American Operations relating to prior year claims, write-off of goodwill and intangibles, and restructuring costs.

Cash profit in the year was $US761 million compared with $US1.042 billion in the previous year.

In the year, revenue slipped 7% to $US19.438 billion, from $US20.922 billion in the year before.

The group will pay a fully-franked final dividend of 12 Australian cents on March 31 to shareholders on the register at March 13.

The payment follows an interim dividend of 20 Australian cents, bringing QBE's total dividend to a fully-franked 32 Australian cents.

In the period insurance profit slumped 33% to $US841 million.

QBE chief executive officer John Neal said the results had been foreshadowed last year and the group's focus was now on the implementation of changes to key management and taking steps to reposition and "right-size" underperforming businesses in North America.

"Key leading indicators in 2013, including an underlying insurance profit margin in excess of 10 per cent and a current accident year central estimate combined operating ratio of 92.5 per cent, enable us to target a markedly improved performance in 2014," he said.

Mr Neal said QBE's global transformation program was progressing excellently.

The group said the operational transformation was set to deliver annual cost savings of at least $US250 million by the end of 2015.

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