QBE’s Frank O’Halloran has had a remarkable past month as his company’s fortunes have see-sawed under the impact of the September 11 attacks. He has endured the trauma of having his company exposed to record claims, experienced a share sell-off that wiped nearly 70% off its value, then managed a capital-raising that has been very successful.

Late last week the company closed the institutional component of the capital-raising following what Mr O’Halloran described as “an exceptional response” from institutional shareholders.

As we reported last week, Mr O’Halloran was under pressure from institutional investors to raise more capital following its exposure to at least $250 million in claims from the US terrorist attacks. The institutions want QBE with sufficient capital to take advantage of the massive premium rises that will flow to the international and local markets over the next year.

In a statement, QBE said the amount raised following the allocation to institutional shareholders is approximately $542 million. Settlement will be completed today.

"The response from our shareholders has been overwhelming,” Mr O’Halloran said. “We are very encouraged by the level of support we received. Virtually all our institutional shareholders participated.”

Now it’s the turn of the small fry. QBE expects to raise another $121 million from its private shareholders. The prospectus for sales to the private shareholders will be distributed to them from tomorrow.

Not that the battle is all over yet for QBE. There’s still uncertainty surrounding the company’s exposure to the US attacks, although Mr O’Halloran is adamant that most of the exposure is held with A-rated reinsurers. Investment broker UBS Warburg also said yesterday that the expected net earned premium of $5.5-$6 billion gives QBE a solvency ratio of 40%. UNS Warburg suggests a figure above 50% would be better.