By Ruth Liew
Ratings house Moody's Investors Service has placed QBE Insurance Group's debt ratings under reviews for a potential upgrade.
Moody's has placed the issuer and senior unsecured ratings of the listed global insurer under scrutiny for an upgrade. The ratings agency is reviewing two other vehicles – QBE Capital Funding LP and QBE Capital Funding II LP.
Moody's has placed the issuer and senior unsecured ratings of the listed global insurer under scrutiny for an upgrade.
The review comes after QBE's management aggressively tackled the problems that previously plagued the company, including reducing the financial leverage at the group and improving its earnings and profits.
"The sustainability of QBE's current capital structure, with lower levels of financial leverage, and the sale of underperforming businesses, may, over time, improve the underlying performance of the group," said Frank Mirenzi, Moody's vice-president and senior analyst.
"The rating review will focus on the sustainability of QBE's improved capital structure and the path for sustainable improvement in the group's earnings and profitability profile in the future."
Moody's will also be keeping a close watch on the group's North American operations – one of QBE's biggest divisions – and its impact on profits.
The ratings house's review came after QBE posted a 24 per cent rise in net profits to $US488 million ($672 million) for the half year to June 30.
The global insurer also increased its dividend payout ratio to up to 65 per cent of cash profits in 2016. Investors will be paid 20¢ a share for the six months to June, up from 15¢ a share last year.