Australia’s second largest insurer QBE Insurance Group QBE said yesterday it was boosting its capital through an equity raising exercise to stave off the impact of the coronavirus pandemic even as it posted a strong premium growth in the first quarter, reported Reuters.
The company is looking to raise about $750m through an institutional placement at $8.25 per share representing a 9.4% discount to the last closing price on 9 April, and $75m through a share purchase plan that will close on 11 May.
“The capital plan we have outlined positions us to navigate this period of extreme uncertainty with demonstrable strength and gives us the flexibility to pursue organic growth opportunities that may arise over the medium term,” QBE CEO Pat Regan said.
Despite the disruption from COVID-19, the insurer posted an increase of over 9% in gross written premiums in 1Q2020 to $4.53bn.
QBE also said the capital raise would lift its capital to above the S&P’s “AA” credit rating levels.