QBE to float LMI business

In its half year results released this week, the company stated that the IPO will provide QBE LMI with a broader shareholder base and funding flexibility more suitable for a business with ongoing and strong growth ambitions, while allowing QBE to retain a material exposure to this highly profitable and well-positioned mortgage insurer.

“QBE LMI’s results have been outstanding and are expected to remain so for the foreseeable future,” QBE Group chief executive John Neal said.

“The capital intensity of this business led us to purchase additional reinsurance protection to support the business’ growth plans, however, with the longer term in mind, the introduction of third party shareholders offers QBE LMI enhanced capital flexibility to support its growth ambition,” Mr Neal said.

As at 30 June 2014, the net tangible assets of QBE LMI were approximately $1.2 billion.

The IPO is targeted to take place in 2015.

The news follows the successful public listing of Genworth Mortgage Insurance Australia (GMA) earlier this year.

The LMI insurer listed on the ASX at $3.00 a share on May 20, rising steadily to $3.65 at close of trading yesterday.

Genworth reported a statutory net profit after tax of $42.5 million relating to the financial period post the reorganisation steps of the IPO, from 19 May 2014 to 30 June 2014.

“I am very pleased with the performance of the business in the first half of 2014 and our first result as an ASX listed company,” GMA chief executive Ellie Comerford said.

“The performance is marginally ahead of our expectations and positions us well for the remainder of the 2014 financial year,” she said.