The QBE Insurance Group Ltd (ASX: QBE) share price hit a 2017 low at $9.65 this morning, before recovering slightly after the company updated the market following the natural disasters of hurricanes Harvey, Irma, Maria and the Mexican earthquakes.
While a high degree of uncertainty remains about the estimated cost of the aforementioned catastrophes, Australia's largest global insurer announced that it will increase its 2017 allowance for large individual risk and catastrophe claims to $1.75 billion following these catatstrophic events.
It is expected to have a pre-tax impact to earnings of approximately $600 million. Consequently, the company's 2017 combined operating ratio target will rise to between 100% – 102%.
QBE remains down around 70% over the last 10 years as the company has struggled to execute on its turnaround plans. With 2017 expected to be the costliest year in the history of the global insurance industry, investors may want to give QBE a miss and look towards companies in industries with superior growth prospects.
