QBE's run of bad luck in the US has prompted analysts at CLSA to argue the insurer should retreat from the world's biggest economy if it wants to return to its "glory days".
About a third of QBE's profits come from the US, but earnings have recently been hit by heavy claims from severe storms, a drought and a legal stoush over its mortgage insurance business.
In a report, CLSA analyst Jan van der Schalk argues it is time for QBE to "pull up stumps" in the US because its businesses there are a drag on overall performance.
QBE is a key provider of insurance on troubled mortgages known as "lender-placed insurance" - which has been targeted by US authorities in recent months. Last week QBE settled with the state of New York for almost $US10 million, after the state alleged insurers in the sector were profiting from paying kickbacks.
In a move that Mr van der Schalk conceded was partly guesswork due to the amount of publicly disclosed information, the analyst sought to model the effect of more settlements with other states and a further deterioration in its crop insurance business.
It concluded that group-wide return on equity would fall from 10.1 per cent and to 9.6 per cent and margins would drop from 12 per cent to 11 per cent.
"It rather begs the question, why have the US at all?" he said in a note. The analyst, who has a "sell" rating on the stock, said QBE lacked the capital and scale to make a difference in the US and should focus on other countries instead.