Insurer’s capital level has been restored to ‘a strong level’, says ratings agency
AM best has revised the ratings outlook of QBE’s four key operating divisions to stable from negative.
The ratings agency has also affirmed the financial strength rating of A for the divisions, which include the UK based QBE Insurance (Europe) and QBE Re (Europe) units.
AM Best revised QBE’s rating outlook to negative in December 2013 after large write-downs in its North American division caused the Australian insurance group to predict a loss of $250m (£165m) for the full 2013 year.
The rating agency said it had reinstated QBE’s stable outlook because the company had restored its capital to “a strong level” by a series of actions that included raising equity, refinancing debt and selling non-core assets.
It said the actions had also reduced the company’s debt levels.
The rating agency added: “A further improvement in these metrics is expected in 2015, supported by the disposal of other non-core assets.”
AM Best said QBE is unlikely to be upgraded in the near term. But it added that the stabilisation of QBE’s performance, capital and debt at a strong level could result in upgrades in the longer term.
Deterioration in operating performance, capitalisation or financial flexibility could result in downgrades.