QBE Insurance (ASX:QBE) is a leading provider of general insurance and reinsurance services in Australia, the Pacific, Asia, the Americas and Europe. QBE is also widely considered among the market’s blue chip stocks.
On Friday, QBE announced that it had acquired the Balboa insurance business from Bank of America-Merrill Lynch for US$700 million.
The annualised net earned premium from the agreement is expected to be around US$1.3 billion, and the purchase will be funded through new short-term bank facilities.
The group also confirmed 1H11 net profit will be approximately US$1.28 billion, in line with analyst estimates.
However, due to the catastrophic claims and low interest yields in the US, UK and Europe, its insurance margin was expected to be at the bottom end of its previous 16% – 18% guidance.
QBE flew 7.4% following its update, making it one of the strongest performers in the share market.
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