QBE TO MERGE EUROPEAN OPERATIONS WITH LLOYD’S BUSINESS

Australian insurer QBE is the merge its European operations into Lloyd’s underwriter QBE Insurance Group Ltd. The business will be headed by Steven Burns, who had previously been CEO of QBE’s Lloyd’s division Limit. Paul Glen, Wayne Lewis and Ferghal O’Regan, executives at QBE’s European company operations, are to leave QBE. Units in central and eastern Europe will report to Vince McLenaghan, head of QBE’s Asia-Pacific operations. Two marine syndicates at Lloyd’s will merge into one, with Colin O’Farrell as active underwriter. Group CEO Frank O’Halloran said that the changes provided for “greater flexibility for capital management and co-ordination of the underwriting of our various portfolios”. QBE chief financial officer said that “the aim is obviously to reduce our overheads”, but claimed that the number of job losses would not amount to more than a dozen. Most of the cost saving would come from the reduction in regulatory costs. “The cost of maintaining licensed entities today is far more expensive because of the regulatory environment than it was 10 years ago”, he said, noting that now the Financial Services Authority in the UK was empowered to regulate both Lloyd’s and other markets, it made sense to “pull the two structures together with one board at the top”. QBE’s shares rose 3.4% today at A$12.94.