QBE sets out to insure its future

A RESTRUCTURING of QBE Insurance's Australian operations has triggered the exit of a top executive long regarded as a key candidate to take charge of the global insurance giant from current boss Frank O'Halloran.

By InvestSMART · 22 Jul 2011

By InvestSMART ·
22 Jul 2011

QBE last night issued a statement saying Vince McLenaghan had left to pursue other interests. It did not elaborate.

Mr O'Halloran, who has been in charge for 13 years, has not detailed his retirement plans. But Mr McLenaghan and a second executive, Steven Burns, head of the company's European arm, had been seen as front runners to succeed him.

More recently, QBE's global head of underwriting, John Neal, has emerged as a market favourite to assume the top spot.

Most QBE watchers expect an insider to get the top job given the complexity of QBE's operations, which now span 49 countries.

A 27-year veteran of QBE, Mr McLenaghan had been shuffled around to key positions in QBE's global empire for much of the past decade to gain experience. At one stage he served as chief operating officer, running the insurer's day-to-day business.

Most recently he headed QBE's combined Australian and Asian unit, which operates in 18 countries with more than 5600 staff and insurance income of about $4.7 billion.

However, the region has since lost prominence, with much of the growth for the company occurring in the US, where QBE has rapidly increased its exposure to the market through a string of large acquisitions.

A global shake-up announced late last year suggested Mr McLenaghan's rise inside the company was not a certainty as several key executives no longer reported to him.

Last night, QBE detailed plans to split its Australia Asia-Pacific business into two, citing rapid growth of its operations in the region. QBE will have an Australian operation and an Asia-Pacific operation, headed by separate chief executives, each reporting to the group's head office.

Michael Goodwin will remain in his role of Asia-Pacific chief executive while Colin Fagen will become chief executive of the Australian business.

QBE said the split was intended to make the most of opportunities and improve decision-making in its operations across the two regions. "The changes to the management structure of our Australia Asia-Pacific operations reflect the natural progression of these successful businesses to a more independent future," Mr O'Halloran said.