Merrill Lynch research analyst Andrew Kearnan says QBE is becoming “increasingly US-centric” in its search for growth.

In a research note published last week he says the US has become “increasingly relevant” for QBE, with about half of its premiums in 2012 forecast to be generated from the Americas region.

At its half-year results presentation last month, QBE revealed its US gross written premium (GWP) leapt in the first half of 2011 when compared to the same period last year, from $US2.3 billion ($2.2 billion) to $US3.5 billion ($3.3 billion).

Mr Kearnan says the growth largely came from its recent acquisitions in specialist classes like crop and lenders placed insurance, which “are not linked to traditional pricing cycles”.

QBE is forecasting full-year GWP from the Americas of $US7.7 billion ($7.3 billion), compared to $US4.6 billion ($4.3 billion) from its Australian business and $US4.5 billion ($4.2 billion) from its European operations.

Mr Kearnan says QBE is now “appropriately being priced as a ‘cyclical’ rather than ‘growth’ stock as reflected by the share price falling almost three-fold from its peak in 2007”. 

“We believe QBE is one of the best global commercial insurers, but it will take a premium rate cycle turn, rising interest rates and a declining Australian dollar for the stock to come to favour,” he says, adding that while premiums in the US market are continuing to stabilise, “a broader premium rate turn is not on the cards”.

insuranceNEWS.com.au reported last week that the key QBE position of global head of distribution will be based in New York following the retirement of Sydney-based Terry Ibbotson.

Global Underwriting Operations CEO John Neal said the decision recognises “that the head office locations of the major international brokers are all in the northern hemisphere”.