By Paulina Duran
SYDNEY (Reuters) - Australia's QBE Insurance Group on Monday said it would exit Latin America to focus on its struggling units in Asia Pacific and North America, as it confirmed a record annual loss hurt by claims from natural disasters.
The country's second-largest listed insurer by market size said it had agreed to sell its Latin American business to Zurich Insurance, for $409 million, making good on its promise to be smaller and less complex.
"Following a strategic review of our footprint in Latin America, we have decided to exit the region in order to focus on our core markets and to improve the quality and consistency of our results," Chief Executive Pat Regan said in a statement.
Regan said that fixing the "unacceptable" performance of the loss-making Asia-Pacific business, which was hurt by workers compensation claims in Hong Kong, was a priority. The unit made a net $179 million loss for the year.
"We just need to get a bit better at all of those," Regan told analysts, referring to the company's operations in Hong Kong, Singapore and Indonesia.
Cash loss for the year ended Dec. 31 came in at $258 million compared with a profit of $898 million a year ago.
The annual net loss - already flagged in January - was a record $1.25 billion, compared with an $844 million profit last year.
QBE attributed the loss to what it called unprecedented costs for catastrophes and a $700 million writedown in its North American unit.
The company declared a final dividend of A$0.04 cents per share, lower than A$0.33 a share last year. Despite the loss, it remained committed to buying back up to A$1 billion ($785.4 million) in shares, a plan announced a year ago.
QBE's shares were trading 2 percent lower on Monday morning while the broader market was 0.5 percent higher.
LATAM EXIT WITH SALE TO ZURICH
The Latin American operations, including Argentina, Brazil, Colombia, Ecuador and Mexico, were sold for a pre-tax profit of about $100 million, QBE said.
The Puerto Rico business will be merged into its North American unit to service claims from Hurricane Maria.
The deal turns Zurich into the leading insurer in Argentina and No.3 in Ecuador, Zurich said in a separate statement.
Argentina, particularly, was an attractive buy, given its growth and "positive" environment for insurance, said Claudia Dill, Zurich's Chief Executive Officer for Latin America.
Zurich last year bought Australia and New Zealand Banking Group's life insurance arm, propelling it to the top rank in the Australian market.
($1 = 1.2732 Australian dollars)
(Reporting by Paulina Duran in Sydney.; Additional reporting by Susan Mathew in Bengaluru; Editing by Stephen Coates)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
RECOMMENDED FOR YOU