Insurers 'could struggle for earnings'

Australia's big three ASX-listed insurers may post just $2.3 billion worth of profits this year, it has been reported.

The Sydney Morning Herald claims that earnings growth for the general insurance sector could be the slowest for five years and Sydney-based QBE is expected to supply the vast majority of the big three's net profits.

QBE will post its half-year financials on August 21st and market speculators are eyeing a figure of around $880 million, the publication claims.

During the equivalent half-year ending June 2007, QBE generated net profit after tax of $921 million, which represented a 56 per cent increase on the $591 million bottom-line figure it posted in 2006.

For the full-year, analysts are expecting QBE's net earnings to come in at the $1.9 billion mark, the Sydney Morning Herald reported, up on the $1.483 billion and $1.091 billion recorded in fiscal 2006 and fiscal 2005 respectively.

In July, Australia's largest home and car insurance group IAG announced it would exit its operations in the UK, resulting in a non-cash impairment charge of around $350 million this year.

This would result in an estimated loss of between 13 cents and 15 cents per share for fiscal 2008, IAG claimed.

QBE withdrew a proposal to merge with IAG in May claiming that its bid fell short of IAG's expectations.

Earlier this month QBE, Australia's largest international general insurance and reinsurance group, signed a definitive agreement to acquire the Australian, New Zealand and Asian operations of PMI Mortgage Insurance in a $1 billion deal.

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