Giant insurer QBE Insurance Group Ltd (ASX: QBE) lived up to its past reputation today after updating the market that gross written premiums remain under pressure with specific areas of weakness in North America and its Lenders Mortgage Insurance business.
The company also said that it is experiencing premium pricing pressure via competition in all markets, which it described as "slightly tougher" for the third quarter of 2015, compared to the first half.
As a result the stock is down 1.8% to $12.90 on a day that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has soared 1.6% as equity investors get their mojo back after weeks of falls for the local market.
Despite much talk that QBE offers turnaround potential in my opinion it continues to exhibit all the problems of a company that got out way of its depth overseas, with too many layers, inefficiencies and operating blunders that all prevent it from being anything like investment grade.
As an investor I would look to either the Warren Buffett favoured Insurance Australia Group Ltd (ASX: IAG) or Suncorp Group Ltd (ASX: SUN) long before considering QBE Insurance Group. Both Suncorp and IAG appear better managed with superior yields, while neither offer the potential for earnings shocks that have been regularly distributed by QBE in the past.
