Reason: The equity raising will be used to position QBE with demonstrable capital strength to navigate a broad range of severe economic scenarios. All of that will go to boost its capital levels.The raising, combined with a $US400 million Tier 1 debt issuance, will boost QBE's capital reserves to 1.9 times the prudential regulator's prescribed capital amount (PCA). QBE Insurance (ASX: QBE) will dilute more than 12 per cent of its ownership as it rattles the tin to secure $1.32 billion in extra capital.
"I know that sounds a bit clinical but that is the legal reality of it. Read more about ASX announcements, AGM meetings and Financial Reports regarding the QBE Group at our Investor Relations Centre. But I think most people have realised that's not practical [and] probably not legal.
Qube Holdings Ltd (ASX: QUB) QBE’s pre-emptive capital raise comes after a strong first quarter for the insurer where it saw gross written premiums rise 9% to $4.53 billion. Reporting by Nikhil Kurian Nainan and Shreya Mariam Job in Along with increased capital buffers, QBE has also sold all its equity holdings and emerging market and high yield debt. This site, like many others, uses small files called cookies to ensure that we give you the best experience on our website. Sarah Cox, Managing Director of Ansvar Insurance, shares valuable breaking news for brokers who work with the third sector The flood re-insurer presented evidence to Parliament’s Environment, Food, and Rural Affairs (EFRA) Select Committee yesterday addressing the evolving risk of climate change threatening its exit However, the value of claims being paid has climbed by 27% - the largest reported quarter to quarter increase Lloyd’s of London workers were met with some climate protesters raising their concerns as they returned to work after its underwriting room has remained shut since March due to the coronavirus pandemic Published by Newsquest Specialist Media Limited, registered in England & Wales with number 02231405 at Loudwater Mill, Station Road, High Wycombe HP10 9TY - a Gannett companyCovid car buying habits lead to demand for new insurance products says Copart UK boss‘I was so worn down’ - a first-hand account of racism and sexism in the broking industryThe Insurance Times insurtech top five winners and losers of the pandemicClaims Excellence Awards 2020: Claims teams showcase successes to be in with a chance of award win
QBE chief executive Pat Regan warned shareholders there will be no quick recovery from a gruelling pandemic-induced recession, but he says his $1.3 billion plan to strengthen the balance sheet will be enough to see the company through.Announcing the major equity raising on Tuesday, most of which will come from a $US750 million ($1.17 billion) institutional placement underwritten by JPMorgan and Goldman Sachs, Mr Regan did not sugar coat the economic reality, saying a prolonged global recession was all but certain.Pat Regan says QBE is making itself 'fortress strong'.“We think now is the time to be fortress strong, because there is so much uncertainty in the world.
So it's given its tacit blessing to a dismemberment.Goldman Sachs' equities desk was in the market with a $198 million block of Xero shares on Wednesday night. It will issue 145.5 million new shares. Please tell us what we can do to improve this article.We have updated our privacy policy to be more clear and meet the new requirements of the GDPR. Join the mailing list Receive our regular newsletter, a round-up of the latest news and insights … If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website (The insurer said in an announcement to the Australian Stock Exchange that the extra capital would come in the form of a new equity placement and a share purchase planQBE is looking to raise $825m in new regulatory capital to help it deal with the economic fallout from the global coronavirus pandemic.The Australian insurer is looking to raise $750m from a fully underwritten placement of new fully paid ordinary shares at a purchase price of AU$8.25, which represents a 9.4% discount to the last closing price of AU$9.11 on Thursday 9 April 2020.The placement will result in approximately 145.5 million new shares being issued, representing approximately 11.1% of QBE’s existing issued capital.The insurer is also seeking to raise a further $75m by way of a share purchase plan, under which eligible QBE shareholders will have the opportunity to apply for up to AU$30,000 of new shares without incurring brokerage or transaction costs.Announcing the move to the Australian Stock Exchange, chief executive Pat Regan said: “Despite the extraordinarily difficult landscape, QBE commenced the year with strong pricing momentum and underlying premium growth.“The capital plan we have outlined positions us to navigate this period of extreme uncertainty with demonstrable strength and gives us the flexibility to pursue organic growth opportunities that may arise over the medium term.”The insurer said that the equity raising will bolster its regulatory capital to 1.9x the group’s prescribed capital amount (PCA), up from the current estimated level of 1.6x, down from 1.71x at 31 December 2019, primarily reflecting the final dividend payment for 2019 and a negative first quarter investment return of around 2%, or nearly $500M, due to extreme volatility across all asset classes including a material increase in global fixed income credit spreads and significant declines in equity markets.In addition to the equity raise, the insurer is also increasing reinsurance levels and has already derisked its investment book by exiting all equities, emerging market and high yield debt.QBE said these measures will lift capital above S&P ‘AA’ levels.The insurer also announced a 9% increase in group gross written premium over the first quarter of 2020 to $4.5bn.
This was largely driven by rate increases, which averaged 8% across the group, coupled with “solid volume growth assisted by improved retention in every division”.Meanwhile, the insurer’s charitable arm, QBE Foundation, is donating £400,000 to help support coronavirus relief efforts by way of a grant to be split among its charity partners in Europe.In the UK, grants will be provided to the British Red Cross, CRISIS, Mind and Save the Children.
The credit limit refers to the amount businesses can claim if customers fail to pay their invoices. QBE also said the capital raise would lift the insurer’s capital to above Standard & Poor’s “AA” credit-rating level.
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