SYDNEY (Reuters) - QBE Insurance Group, Australia's biggest insurer by premium income, posted an annual net loss of $254 million as its North American arm experienced a significant increase in claims and writedowns.
The loss for the year to Dec. 31 was slightly more than the $250 million annual loss predicted by the company in December, and compared with a $761 million net profit the previous year.
QBE has been grappling with hefty claims as a range of adverse weather events weigh down its North American earnings. The company's North American arm has been upping the amount it sets aside for claims from previous years.
Cash profit, which excludes non-cash charges for amortization and impairment of intangibles, fell to $761 million from $1.04 billion the previous year.
QBE's North American business reported a $482 million underwriting loss, more than double its $237 million underwriting loss the previous year.
North American gross written premiums fell 11% while global gross written premium fell 2% amid intense competition because of low interest rates.
"While the disappointing performance of our North American operations dominated the 2013 financial results, we have taken necessary but painful action to address the issues and return this business to profit," QBE Chief Executive John Neal said in a statement.
The company said it would refocus its growth initiatives in "areas that are performing well", namely Australia, New Zealand and Asia-Pacific.
Its North American business would "reset ... its business mix in 2014 to consolidate its position as a commercial specialty insurer".
Globally, the company expected premiums to grow 2.5% in 2014, countering an increase in claims.
QBE said it was targeting an insurance profit margin of about 10% in 2014 after its insurance margin narrowed from 8% to 5.5% in 2013.
The company declared a final dividend of 12 cents per share, taking the year's total dividends to 32 cents, down from a total 50 cents the previous year.
QBE shares were flat on Monday, having fallen a quarter since Dec. 9 when it warned that problems at its U.S. arm would result in a full-year loss
(Reporting by Byron Kaye; Editing by Andrew Roche and Jonathan Oatis)
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