Australian insurance group QBE has launched what it called a comprehensive capital plan even as it enjoyed strengthened trading conditions in the first quarter.
The Sydney-headquartered insurer said it is taking pre-emptive and decisive action to lift regulatory capital via a plan that includes a fully underwritten ~US$750 million (around AU$1.17 billion) institutional placement and a non-underwritten share purchase plan aimed at raising up to ~US$75 million (around AU$117 million).
“Execution of the capital plan will lift the group’s PCA multiple to around 1.9x and head office liquidity to around US$1.8 billion (around AU$2.8 billion) while also providing flexibility to return gearing to within the group’s internal 25-35% benchmark over the next 12 months,” explained QBE in a regulatory filing on Tuesday.
Meanwhile the insurer reported that gross written premium in the first quarter jumped by more than 9%, with group-wide premium rate increases averaging 8% during the first three months of 2020.
Chief executive Pat Regan noted: “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.”
