QBE Insurance Group has been given a stable rating by S&P, with core and strategically important operating subsidiaries including QBE Reinsurance Corp and QBE Reinsurance (Europe) rated as A+.
The agency said of the decision, “We view the group's enterprise-risk-management framework as strong, which is an important rating factor because of the complexity of the business.
It stated that although it felt QBE Group's strategy to grow by acquisitions was riskier than an organic-growth strategy, that the company has “so far, managed this risk well.”
“Moderating factors are QBE's growth in lines more exposed to economic and financial volatility; an inherently aggressive growth-by-acquisition strategy; and reasonably high reliance on third-party reinsurance,” the statement added.
“QBE's capital adequacy under Standard & Poor's model was below the 'A' category based on its financial results at 31 December 2011. However, we anticipate this position to be temporary. Our view of QBE Group's capitalization also factors in the insurer's strong reserves and reinsurance protection.”
