In its much anticipated Annual General Meeting today, the QBE Insurance group reassured investors that it will meet its full year insurance profit margin.
“The first quarter of 2008 is on track to meet our targeted full year insurance profit margin of 19% to 20%,” QBE Chairman John Cloney said.
It also said it expects an increase of close to 7.5% in gross written premium and 10% in net earned premium.
He said the forecasts were subject to usual caveats, including that large losses and catastrophes did not exceed the significant allowance in QBE’s business plans and exchange rate movements.
The 2008 premium revenue targets are based on an Australian dollar exchange rate of $1.11 to $US1.00 and $2.25 to one pound sterling.
QBE chief executive Frank O’Halloran said the company’s proven strategy of growth, mainly through acquisitions and a focus on profitability, would continue.
In addition to the first quarter update, QBE’s chairman conceded that the price of QBE stock has been affected by the overall market volatility and expressed his concern about ASX’s role as a market regulator.
QBE’s chairman urged the corporate and market regulators to increase their vigilance and “require better disclosure to ensure a more orderly market to protect the interest of all shareholders”.
Cloney expressed his view that the Australian Securities Exchange (ASX) has a conflict of interest in its dual role as a market operator and market regulator.
“As a market operator, it is not in the ASX’s interest to take steps to decrease trading volumes. They clip the ticket for every transaction so the more transactions the better,” he said.
“Therefore we believe that existing regulation of the market should be transferred to the Australian Securities and Investments Commission (ASIC) and disclosure introduced to protect smaller shareholders.
“We do not need more regulation, rather we need effective regulation.”
Shares in QBE rose 59 cents or 2.4% to $25.19.
