QBE: Unbowed and on the prowl

The company might be on the nose with some investors, but inside the company it seems to be business as usual

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

QBE Insurance Group Limited (ASX: QBE) may be on the nose with investors at the moment, with a share price not all that far from six-year lows, but the company is anything but a deer in the headlights.

Recent news hasn't been kind. Profits are under siege from poor investment returns in the United States (due to low bond yields) and a nasty series of natural disasters, and the current CEO, Frank O'Halloran, has announced he will be departing the insurer. Add in a capital raising, and – on the surface at least – there are plenty of reasons for investors to be a little gun shy

Despite all of the external pressures, QBE is refusing to be spooked into rewriting its playbook. Instead, the company today announced a $400m deal to buy some of HSBCs insurance operations in Hong Kong and Argentina.

O'Halloran has built the Australian insurance giant into a truly global insurer by judiciously choosing between organic growth and growth by acquisition, depending on the stage of the insurance cycle and the returns on offer. This buy seems to be straight from the QBE handbook, a reassuring sign that the company isn't allowing the market noise to distract it from running its business.

The company is yet to comment on any impact from the current round of Australian floods – we should assume there will be some impact – but those semi-regular occurrences are to be expected. (Suncorp Group Ltd (ASX: SUN) and RACV recently released early figures on the impact, but Insurance Australia Group (ASX: IAG) considered it too soon to estimate losses.)

Insurance is necessarily a lumpy business – that is why we take out insurance after all – and this latest purchase is simply another sign that QBE is taking these things in its stride and concentrating on business as usual.

If you are looking for ASX investing ideas, look no further than "The Motley Fool's Top Stock for 2012." In this free report, Investment Analyst Dean Morel names his top pick for 2012…and beyond. Click here now to find out the name of this small but growing telecommunications company. But hurry – the report is free for only a limited period of time.

More Reading:

Scott Phillips is a Motley Fool investment analyst. Scott owns shares in QBE Insurance. You can follow him on Twitter @TMFGilla. The Motley Fool's purpose is to educate, amuse and enrich investors.This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »