QBE has bought five insurance operations worth $US695 million ($1.06 billion) and has issued a $2 billion share placement to help fund the acquisitions.

The largest buy is US underwriting agency ZC Sterling Corporation, a specialist underwriting agency dealing in property and homeowner insurance. QBE will pay $US575 million ($875 million) for the company.

QBE has agreed to buy two further underwriting agencies in the US and one in Europe, in addition to a US-based renewal rights portfolio.

CEO Frank O’Halloran says all acquisitions should add to earnings per share in year one.

“The acquisition of the four underwriting agencies and the renewal rights portfolio is consistent with our strategy to build our distribution channels for profitable niche products,” he said.

The company will meanwhile raise $2 billion from investors in a share issue worth $20.50 per share, a discount of 10% to the last traded price before the announcement.

The five acquisitions are forecast to deliver gross written premium of almost $US525 million ($801 million) and net profit of $US175 million ($267 million).  

Mr O’Halloran has also upgraded forecast gross written premium for 2008 to $13.3 billion and expects a 10% growth in net earned premium to deliver $11.2 billion in earnings.

In August, QBE forecast gross written premium to be around $12.5 billion and net earned premium to be around $10.8 billion for the year.

Next year, QBE expects gross written premium to climb to $16.5 billion with $14 billion in net earned premium, based on certain foreign currency assumptions.