The market value of QBE Insurance Group dropped by some $5billion after yesterday's actions by Moody's InvestmentServices related to the company's expected 2013 net losses of some$250 million, according to news reports.

Moody's reduced QBE's issuer and senior unsecured debt ratingsto Baa2 from Baa1, following Monday's announcement by QBE in whichthe Australia-based property and casualty firm reported theexpected losses related to the writedown of intangible assets ofsome $930 million, and additions to reserves and risk margins ofsome $670 million.

QBE had noted it incurred unexpectedly large claims after weakcrop prices hit its U.S. operations.

The company declined to comment.

Pessimism continued to drive down QBE shares on Tuesday,according to the Sydney Morning Herald, taking the totaldecline in its shares since it forecast the loss to 30%.

The Sydney Morning Herald reported that this was QBE'sthe third profit downgrade from chief executive John Neal in 12months.

QBE has completed more than 75 acquisitions in the past 10 yearsto expand to 50 countries, but has grappled with hefty claims fromat least one major market for each of the past few years. QBE saidit was putting aside more money for claims made a year earlier forworkers' compensation and construction defect risks, among others,while its North American crop-insurance business had alsosuffered.

QBE, which generates about 30% of its revenue from NorthAmerica, posted a net profit of $761 million for 2012; the companyhas said it has already put in place a new executive team for theregion.

Moody's noted that QBE's Belinda Hutchinson, a director for 16years, would step down as chair in March 2014 and would be replacedby board member Marty Becker.

According to Moody's, the downgrade “reflects the group'sweakened profitability, internal capital generation and debtservice coverage measures,” as well as the “likelihood of lowerprospective profitability from the group's North Americanoperations.”

Moody's noted that the writedown of all of the intangible assetsassociated with QBE's lender-placed insurance business primarilyreflects the material and rapid contraction of revenue for thissegment, with gross premiums written expected to fall to $960million in 2013 from nearly $1.6 billion 2012, a figure managementexpects to decline further in 2014 to approximately $800million.

Moody's stated that the outlook for the ratings is stable,reflecting its expectations that QBE should be “less susceptible tooperational volatility going forward and more likely to remainwithin tolerances at the new rating level.” The outlook alsoconsiders Moody's expectations that QBE's profitability willstrengthen in 2014, “despite continued headwinds for the NorthAmerican operations, and that the group will restore capitalstrength and deleverage its balance sheet over time, through bothretained earnings and capital management actions.”