QBE Insurance has experienced its first loss in more than 20 years, with the September 11 terrorist attacks resulting in a “devastating” annual loss of $25 million. While such a figure was never going to make CEO Frank O’Halloran anything but very unhappy, the company has been careful to emphasise that after reinsurance recoveries and tax, QBE has booked a net loss from the disaster of $252 million, in line with its previous estimate of a loss of about $250 million. 

Analysts seem happy with the company’s continued assurances that 97% of its reinsurance recoveries are with A-listed reinsurers, although the Australian Financial Review noted about $800 million gross written premium in QBE’s reinsurance book is exposed to future terrorist claims.

The loss compared to a profit of $179 million for the previous year. But for the September 11 disaster, QBE would have reported a 27% rise in full-year earnings, to $227 million.

Mr O’Halloran said the loss “is a huge disappointment and a real dent in the pride for myself and for the team that we are announcing an operating loss for 2001, the first loss the company has incurred for over 20 years”.  

“The WTC loss was a major setback for us. However, it does not change our determination to create wealth for our shareholders; nor does it change our basic businesses,” Mr O’Halloran said. “I am absolutely determined to make it back for our shareholders.”

He said it would be more than 20 years before all the World Trade Centre claims are met.