QBE says structural changes to its Europe and North America divisions will drive future growth, while acquisitions remain on the back burner.

European Operations CEO Richard Pryce told an investor and analyst day in London last week that despite a “challenging environment”, QBE is confident it can defy the regional economy’s bleak outlook.

He says most European Union countries are unlikely to experience material growth in the next three years, but QBE Europe has “acted decisively” in disposing of non-core assets and closing or restructuring underperforming portfolios.

Such steps include the closure of branches in Ireland, Switzerland and Belgium; the sale of renewal rights in Bulgaria and Romania; and cessation of portfolios including medical malpractice in Italy and Spain, aviation and bloodstock.

Mr Pryce says QBE Europe will “maintain a largely defensive position” this year and has forecast “limited growth” next year.

“More significant growth” through organic expansion and restructuring will not occur until 2017.

He ruled out any “material” acquisitions in the meantime.

In a separate investor day in New York, North American Operations CEO David Duclos flagged “significant changes” to the management and organisational structure, business portfolios and processes, “to protect and enhance our valuable US franchise”.

Seven of the division’s 10-strong leadership team joined last year or later. Mr Duclos became CEO in April last year.

He says QBE’s ambition is “to become a successful specialty-focused carrier in North America”.

Profitable growth will be achieved by building and expanding specialty business lines through recruitment of underwriting teams.

Specialty markets are expected to grow from 6% of gross written premium (GWP) this year to 17% in 2017.

The North American division’s restructure includes the sale of US agencies CAU, Deep South and SIU, all of which were acquired in 2008. Its headcount has been reduced by one-third in the past two years, to 5900 in August this year from 8510 in December 2012.

In Europe, GWP for the first half of this year had been expected to drop to £1.9 billion ($3.5 billion) from £2.04 billion ($3.73 billion), reflecting disposals and portfolio restructures.

However, market conditions have proved more punishing than expected. Actual GWP for the half was £1.62 billion ($2.96 billion). QBE Europe’s combined operating ratio for the half was 94.2%, compared with 94.3% in the corresponding period last year.

In North America, GWP was $US2.47 billion ($2.82 billion) in the first half, down from $US2.75 billion ($3.14 billion). The net combined operating ratio was 98.4% compared with 99.3%.