QBE Insurance expects that a significantly stronger capital will also put it in a position to seize organic growth opportunities in the future
QBE Insurance Group revealed plans to lift its capital to nearly $825m in order to navigate a variety of severe economic and investment market downside scenarios arising from the COVID-19 pandemic.
The Australian insurance group is looking to implement a set of capital actions to take pre-emptive and decisive steps to lift its regulatory capital. The company expects the steps to help in continuing its support to customers, staff, shareholders, business partners, and the community more broadly.
As part of the measures, the insurer aims to raise about $750m of equity through an underwritten institutional placement along with a non-underwritten share purchase plan for its retail shareholders.
The insurer said that the placement will be carried out at AUD8.25 ($5.27) per new share and will result in the issuance of nearly 145.5 million such shares. According to the company, the newly issued shares would represent about 11.1% of its issued capital.
QBE Insurance expects that a significantly stronger capital will also put it in a position to seize organic growth opportunities in the future.
As part of the efforts, the insurance group will also implement a non-underwritten share purchase plan (SPP) to raise a capital of up to nearly $75m.
Under the SPP, eligible shareholders of the company who have a registered address in either Australia or New Zealand will get the opportunity to apply for up to AUD30,000 ($19,162.65) of new shares without incurring costs on brokerage or transaction.
QBE Insurance CEO comments on the capital plan announcement
QBE Insurance CEO Pat Regan said: “Despite the extraordinary difficult landscape, QBE commenced the year with strong pricing momentum and underlying premium growth.
“The capital plan we have outlined positions us to navigate this period of extreme uncertainty with demonstrable strength and gives us the flexibility to pursue organic growth opportunities that may arise over the medium term.”