QBE - QBE Insurance Group

ROE · 10 December 2010

alphaman said:
What's QBE's moat? QBE's management is obviously more competent than its peers, but its business model is similar to other insurance companies isn't it?

Insurance is a competitive game and QBE probably doesn't command much moat but I play a text book copy of how Warren Buffet Buy insurance

1. For its people
2. For its disciplines
3. Lowest cost and reputation

QBE command all three with the exception for Cost, I don't think it's the cheapest but it is competitive with other players...with the underlying disciplines

it make no sense writing policy where you don't make much money out of it and QBE has that discipline ....it let its rival has it, instead of getting into hot water policy

Warren Buffett do exact same thing....he do not write policy just for the sake of writing one it has to make business sense.

at $16.50 the price I paid I calculate that it provide me enough margin of safety to invest in this wonderful business ..let see how it fare in 5-10 years time frame....

ROE · 10 December 2010

Julia said:
Exactly right. Can't see the point in committing funds to a business whose SP is not increasing, when there are plenty of companies which are producing good capital growth.

Insurance works on the law of average and probablity and cycles
In bad years you will see its return will be low but over the
cycle its business will make you adequate return.

would you buy QBE seeing the number around 9/11
cycle? probably not for an itchy and short term person...

but for someone who has an understanding of the insurance business
and its cycle it doesnt look so bad ... straight after 9/11
premium rise, probability of another disaster like 9/11 struck again?

hmm your guess is as good as anyone else but the law of probability tell
you it is pretty damn low .... so lower risk higher premium wouldnt you want to
buy the business in that cycle?

that is my view and other may disagree and that is probably it from me
and good luck to those who hold and those who doesnt hope you find something better

doctorj · 11 December 2010

Insurance is one of the biggest under performing sectors globally - from memory only pharma comes close. Reason being? I don't know... I guess very few people really understand it and therefore negative events tend to cause it to over shoot to the downside?

Any way, on to QBE. The excess of liquidity globally (QE) is pushing rates right down - not good for revenue. Also, profitability of liability classes have been squeezed by high rates of medical inflation, hurting loss ratios on those lines. The upside is that it's been a pretty good year for catastrophies. Oh, and for QBE, the strong AUD really doesn't help given the large proportion of revenues it gets from o/s.

slickline · 19 December 2010

QBE abandoned baby candlestick

The abandoned baby pattern.
Some momentum in the market/ASX. QBE to be moderately bullish over the coming week. According to chart formation on Friday 17th, estimates suggest we will see some good market action come Monday 20th Dec, with QBE showing potential rise. The last 4 candlesticks indicate that we have an abandoned baby looming.

Let’s see what happens over the next 5 days. QBE closed on Friday @ $ 18.31 with trade volume at 3.2 million shares exchanged over the course of the day. If we see volume over 5 million on Tuesday 21st then we will know that the abandoned baby candlestick pattern is a sure thing. May see QBE go as high as $ 19.74 or even higher by the 25th Dec.
market indicators tell me that we may even see $21 by end of 2010.

Greedy_Kev · 21 January 2011

Wow this one hasn't gotten any inputs for a while, seems like no one is talking about this major insurer during this flood crisis

RandR · 21 January 2011

Greedy_Kev said:
Wow this one hasn't gotten any inputs for a while, seems like no one is talking about this major insurer during this flood crisis

Because the majority of QBE earnings are derived from overseas. Think about only 20% in Australia.

I bought in at 17.850. What i believe will hurt it if the AUSD stays high. But if the Euro or USD can gain some ground there earnings should move up quite positively.

Greedy_Kev · 21 January 2011

RandR said:
Because the majority of QBE earnings are derived from overseas. Think about only 20% in Australia.

I bought in at 17.850. What i believe will hurt it if the AUSD stays high. But if the Euro or USD can gain some ground there earnings should move up quite positively.

I think the last time i checked it was 30%, and not alot in QLD, i bought at 17.55, but i wanted to know what everyone else things, and their sentiment towards QBE.

BrightGreenGlow · 21 January 2011

Greedy_Kev said:
I think the last time i checked it was 30%, and not alot in QLD, i bought at 17.55, but i wanted to know what everyone else things, and their sentiment towards QBE.

I think you'll find QBE won't be spending much on the floods, other insurance mobs esp. Suncorp will, while the others will run away from any claims asap. QBE will be fine.

ROE · 22 January 2011

BrightGreenGlow said:
I think you'll find QBE won't be spending much on the floods, other insurance mobs esp. Suncorp will, while the others will run away from any claims asap. QBE will be fine.

not only that they dont expose themselves to general insurance like Suncrop and IAG
property only make up 30% of QBE world wide and a lot of that are in Commercial.

so I say it has bugger all material impact on them ... people will come to realise soon enough that QBE is one of the best insurance business with careful risk mapped out
it will be a rewarding investment at the right price for a lot of people

you be collecting nice dividend even increasing them over time and when disaster striker again buy more and repeat the process

Greedy_Kev · 22 January 2011

ROE said:
not only that they dont expose themselves to general insurance like Suncrop and IAG
property only make up 30% of QBE world wide and a lot of that are in Commercial.

so I say it has bugger all material impact on them ... people will come to realise soon enough that QBE is one of the best insurance business with careful risk mapped out
it will be a rewarding investment at the right price for a lot of people

you be collecting nice dividend even increasing them over time and when disaster striker again buy more and repeat the process

It's not the general insurance that i'm worried about, its there reinsurance, since they are such a big insurance company wouldn't they be reinsuring??

Bill M · 22 January 2011

This is exactly the type of stock that I am looking at right now as a contrarian investor, should be in that thread. I won't ramp or say anymore, DYOR. I was hoping for lower prices Monday but it probably won't happen now since the US markets performance on Friday.

Edit: Dividend drop in the next few weeks too

ROE · 22 January 2011

Greedy_Kev said:
It's not the general insurance that i'm worried about, its there reinsurance, since they are such a big insurance company wouldn't they be reinsuring??

Qbe has no exposure or low exposure to re insurance in Australia and Asia
Most of this operation are in Europe and US
Havent u seen them making reinsurance purchase lately in the US to build even more scale more profitable down the track

Qbe are companies I like best..Management has short term and long term vision
One for making money now and one to secure more profit down the track

RandR · 3 February 2011

QBE was placed into a trading halt this morning, will start trading again on monday.

Was halted because of an impending release on QBE's exposure to Australian disasters, Profit guidance for FY2011, aswell as info on 2010 results.

Should be interesting. Could lead to some big swings either way.

Greedy_Kev · 3 February 2011

RandR said:
QBE was placed into a trading halt this morning, will start trading again on monday.

Was halted because of an impending release on QBE's exposure to Australian disasters, Profit guidance for FY2011, aswell as info on 2010 results.

Should be interesting. Could lead to some big swings either way.

even thou i already hold a position in this company, i'm hoping the shares plummet (unlikely) so i can buy more i think its a good long term company

ROE · 3 February 2011

RandR said:
QBE was placed into a trading halt this morning, will start trading again on monday.

Was halted because of an impending release on QBE's exposure to Australian disasters, Profit guidance for FY2011, aswell as info on 2010 results.

Should be interesting. Could lead to some big swings either way.

It be good news on guidance end and dividend will be maintained
QBE go into trading halt usually for big acquisition and I smell they about
to buy another big business.

This is QBE classic play always buy low during bad times, never buy high during good time

UMike · 4 February 2011

The fairly sharp drop prior to the trrading halt scares me.

Probably an acquision. Balboa?

cutz · 4 February 2011

UMike said:
The fairly sharp drop prior to the trrading halt scares me.

Probably an acquision. Balboa?

What scares me more is the fact that a large line of put options all at one strike were exercised the day before the halt was announced, (they show up in the next morning couse of sales) nil exercise occured the day prior and the following day.

Anyhow I agree, aquisition is on the cards.

Post news release edit >>> Nothing to fear all is well.

ROE · 4 February 2011

UMike said:
The fairly sharp drop prior to the trrading halt scares me.

Probably an acquision. Balboa?

When fear gripped good business you take out uncle Warren Buffett punch line

"Be fearful when other are greedy and greedy when other are fearful"

RandR · 4 February 2011

ROE said:
When fear gripped good business you take out uncle Warren Buffett punch line

"Be fearful when other are greedy and greedy when other are fearful"

nothing could be truer ... qbe up 7.2% today ... keeerrrrr-ching kerching.

Quite happy with my buy in in january now. Now if interest rates in the states and europe start creeping back up QBE could be in a very strong position.

Going to have to do some research on balboa, I know not much about them at all, anybody fairly familiar with there operations ?

Is the purchase of balboa good or bad in you opinion ?

jonojpsg · 4 February 2011

Bill M said:
This is exactly the type of stock that I am looking at right now as a contrarian investor, should be in that thread. I won't ramp or say anymore, DYOR. I was hoping for lower prices Monday but it probably won't happen now since the US markets performance on Friday.

Edit: Dividend drop in the next few weeks too

Hey Bill, did you get on to more with the drop over the last week? Nice rebound today on the back of STRONG fundamentals

QBE - QBE Insurance Group

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