QBE’s capital-raising and risk management measures will temper the effects of recent market volatility and leave it better placed for growth when conditions improve, S&P Global Ratings says.

The insurer said this morning it has completed the $US750 million ($1.2 billion) share placement announced yesterday, with “significant interest” shown from domestic and offshore institutional investors.

The company will next week open a retail share purchase plan offer to raise up to $US75 million ($117 million) and is taking other steps to shore up its defences amid economic and market uncertainty.

S&P says QBE has strong capital buffers and the range of measures it has announced will bolster its overall financial resilience.

“Collectively, these measures should also provide scope for the insurer to benefit from bond spread contractions as markets normalise and take advantage of organic business growth as broader operating conditions improve,” S&P says in a bulletin.

Recent market volatility has hit the investment portfolios of QBE and its peers and is weighing on current year earnings, largely through unrealised losses, the ratings agency says.

QBE will issue about 145.5 million shares at a price of $8.25 as a result of the institutional placement. The new equity, allocated to existing shareholders on a pro rata basis, will begin trading on the Australian Securities Exchange on Monday.

“We are delighted with the strong support for the equity-raising from our institutional shareholders,” QBE CEO Pat Regan said today.

“We see the success of the equity-raising as a clear endorsement of our capital plan to bolster the group’s capital, reduce gearing and improve earnings resilience.”

QBE said yesterday that initiatives it has underway include the planned issue of around $US400 million ($623 million) of additional Tier 1 capital.

It is also adding catastrophe reinsurance to reduce the group’s North American peak peril catastrophe retention to $US150 million ($234 million) from $US275 million ($429 million).

The extra cover significantly reduces the likelihood of materially exceeding a $US550 million ($857 million) annual catastrophe allowance, QBE says.