QBE Insurance Profit Forecast Down

Australian insurance company, QBE Insurance (ASX:QBE) has issued a warning to the share market that its profit forecast is 40 percent lower than last year. As a consequence, company shares have fallen.

Profit Forecast Hit by Investment Losses

QBE Insurance has informed the market that heavy investment losses offset the 20 percent growth in insurance premiums and a 7 percent increase of insurance profit to US$820 million.

While the profit downgrade of net profit after tax is likely to be 40 percent lower, the company is likely to maintain a 62 cents dividend.

QBE 52 Week Fall

With the news of the profit forecast downgrade of QBE Insurance, sent the stock falling at 5.6 percent. The stock has fallen 33 percent ($9 billion) for the last year to a market value of $17.6 billion. The company shares are now trading at a discount: at 8.5 times forecast 2011 year earnings. QBE Insurance stands to lose the most out of all insurers in Australia from a US tragedy, such as a hurricane strike, as it has the most exposure to that market.