Shares in Australia’s largest insurer plunge 22%

QBE has slashed its profit forecast to a net loss of A$250m (£139.2m) and announced a series of writedowns and provisions in its American business.

Australia’s largest insurer watched shares plummet 22.3% to A$12 at the news this morning.

QBE also announced that chairman Belinda Hutchinson will leave in March, to be replaced by non-executive director Marty Becker.

An investigation by actuaries that found QBE had underestimated its provisions in relation to accident insurance claims, which must be increased by $300m.

QBE is also exposed to claims related to crop prices and yields after the worst drought in 50 years in the US. Its revenue also took a hit when its biggest single customer, the Bank of America, substantially sold down its loan portfolio.

Chief executive John Neal said QBE would trade profitably next year and that QBE’s non-US businesses had met or exceeded margins this year.

“It is disappointing and frustrating that we continue to be hampered by past claims that have spoiled very good progress managing and improving the performances of this business worldwide,” Neal said in a conference call with investors.

“To go forward with greater certainty around our group underwriting results, we are emphatically dealing with the North American issues that have been detrimental to confidence and underwriting performance over recent reporting periods. As painful as these decisions are, we are confident that our business in North America will trade profitably in 2014.”