JUST hours after taking charge of the 126-year-old QBE Insurance, John Neal felt the sting of jittery investment markets.
Nanjing Night Net

Shares in the global insurer were sold off heavily as QBE delivered a $US760 million first-half profit and the new chief executive was forced to issue the third profit margin outlook downgrade this year.

But Mr Neal, the former head of QBE’s Europe businesses, was taking the sell-down to a two-month low in his stride. ”It’s just one day,” he told BusinessDay on his first day in the role. ”I’m certainly looking longer-term.”

Mr Neal believes QBE can emerge as a top 10 global insurer, competing against European companies Zurich and Allianz. With a market capitalisation of $15 billion, QBE was yesterday ranked 18th among the world’s general insurers.

”We’re one of the few truly global insurers in that [top] pack and so many of them are concentrated in one market,” Mr Neal said.

”One of our challenges is to leverage all that expertise we have in QBE and therefore be able to grow in multiple markets.”

Yesterday’s sell-down left a tinge of disappointment for Frank O’Halloran, who formally stepped down as chief executive yesterday morning after more than 12 years.

Mr O’Halloran transformed QBE from a mid-level insurer into a worldwide player through more than 120 acquisitions on nearly every continent.

While Mr O’Halloran will remain with QBE for a further fortnight as he finalises some administrative roles, it was Mr Neal who fronted analysts to run through QBE’s first-half numbers. The 13 per cent lift in profit for the six months to June 30 was overshadowed by insurance margin pressure and a slight fall in premium revenues to $US8.9 billion.

QBE’s interim dividend of 40¢ for the half was also below expectations of 42¢. The dividend was down from 62¢ a share this time last year.

QBE shares plunged as much as 11 per cent in early trading, before clawing back some ground to end 4.5 per cent lower at $13.05.

For his part, Mr Neal believes the market had been getting ahead of itself.

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