The insurer will sell NCIB to Steadfast subject to it listing on the Australian Securities Exchange. It also plans to sell its majority stake in QBE Macedonia. It is expected that the sale of the non-core assets will bring in proceeds of around $80million.
The news was revealed at an investor briefing on the insurer’s transformation program progress on Tuesday.
Other initiatives being considered are the further sale of non-core assets, commutation and sale of run-off portfolios; and the purchase of additional reinsurance.
“We have been looking carefully at our businesses and what will create value in [the future],” QBE group CFO Neil Drabsch explained.
“In Australia, for example, we have NCIB, an insurance broker. We feel the broker will sit best with Steadfast and will meet the objectives that will make it a profitable business. It would create value for both sides. We are trying to provide the policyholder with the best service.
“However we have acquired businesses that have not performed, like the Macedonian business. The economic conditions have been quite poor relative [to our other businesses] so it was deemed not to add value. We thought it best to […] put our energy elsewhere. We are trying to determine the best place to put capital, in terms of risk and assets. Nothing in particular is being targeted but everything is under the microscope – can it produce the right returns?”
Group CEO John Neal said its core assets were not defined by size, rather it is about “maximising opportunity and the use of capital”.
QBE also revealed that it had made 39 people redundant from the Australian business as it strives to make cost savings of $250m by 2015.
QBE backs Wallabies and Lions charity bike ride
The QBE Foundation is backing a charity cycling challenge in which ex-Australian Wallabies and ex-British and Irish Lions will cover 1,000km and attempt to set a new world record.
Former Wallabies Simon Poidevin, Warwick Waugh and Andrew Heath, will be joined by past British and Irish Lions players Roger Uttley OBE, Mike Teague, Peter Winterbottom and Tyrone Howe for the gruelling ride.
They aim to raise over AUD$500,000 for charities Redkite and Walking with the Wounded during the challenge which falls between the second and the third tests of the tour.
The group will carry the official match ball for the third test to Sydney from Etihad Stadium in Melbourne.
The Ride of the Lions is calling on members of the community to participate in the world record attempt, to take place at Heffron Park, Maroubra, when the riders arrive in Sydney tomorrow, Saturday 6 July – the morning of the third test. Cyclists will need to do one lap of the park which is approximately 4kms.
“The philosophy of the Foundation is to support charities that help people overcome disadvantage, strengthen their abilities, and live more independently, successfully and productively. The ride is an inspiring initiative towards achieving this philosophy,” said Tony MacRae, executive general manager, intermediary distribution, QBE Australia, and chair of the QBE Foundation.