The QBE Insurance Group Ltd (ASX: QBE) share price has fallen off a cliff — it's down 10% in a week.
QBE share price
As can be seen above, QBE Insurance shares are down in excess of 10% in only a few days. Over the month, the market, or S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), is down just 0.4%.
What's going on?
Last week, QBE Insurance reported higher-than-expected claims from its emerging markets businesses for the first part of 2017.
Leading analysts were annoyed, to say the least. Shaw & Partners' David Spotswood said, "It is another stuff-up by QBE. The management, their track record is in tatters…"
Admittedly, QBE Insurance has been a shambles since the Global Financial Crisis (GFC). The insurance company's share price is still down more than 60% from the high it reached at the time.
The company's former management went hell for leather over its international expansion, pushing into North and South America. Unfortunately, in insurance, bad managerial decisions stay around to haunt shareholders for many years.
Foolish Takeaway
Insurers primarily make money two ways: through the premiums on insurance policies ('pricing risk'), and by investing a 'float' of policyholder money. Few insurers get the 'policy' part right. Even less get both things right.
QBE Insurance is not one of those. And until we see more consistent profits across the entire business, I'm not in any rush to buy its shares.
