QBE Chief To Step Down
Get More Commentary, Discussion & Market Information On -
It's never a good look for a company’s shares to rise in the wake of the announcement of the departure of a long time CEO.
But that’s what happened with QBE shares yesterday after the company said John Neal, its CEO of the past five years is leaving.
His replacement is Pat Regan, the company’s Australian and New Zealand boss and the former group chief financial officer.
The news came the same morning as investors and insurers realised the damage bill from Hurricane Irma would not be stratospheric (over $US100 billion, and instead perhaps as high as $US40 to $US50 billion).
That saw the shares of insurance companies rise in the US on Monday, after the sector bounced back in London and European trading.
QBE shares rose in early trading off the back of the lowered estimates for Irma’s losses (Harvey will be much larger).
They ended the day up 2.5% at $10.50 and you have to wonder just how much of that was due to the news about Irma and how much due to the news of the change of CEO.
Certainly the change of CEO has solid support from the big end of the investment community and analysts who well know Regan from his time as CFO. His move to run the Australian and New Zealand businesses for QBE in 2016 stamped him as the most likely successor to Mr Neal
Mr Neal will step down at the end of this year, having led QBE since 2012, a period in which he has attempted to reduce QBE’s seemingly erratic ability to produce bad news/negative surprises from QBE’s sprawling series of businesses amassed under his predecessor Frank O’Halloran.
QBE chairman Marty Becker said in yesterday’s statement that Mr Neal had led QBE through a “significant transformation and a challenging period in the insurance industry globally,” as he thanked the outgoing CEO and talked up the performance of Mr Regan’s businesses.
"In the last 12 months, Pat has led a strong turnaround in the Australian & New Zealand operations highlighting his operational skills and business acumen and, in his previous role as Group Chief Financial Officer, had been pivotal in stabilising the balance sheet and enhancing the Group's capital management," Mr Becker said.
QBE has in recent months been under pressure from the market after unveiling yet more surprises including a poor performance in its emerging markets business, and disappointing market guidance at its results last month. They are being split into two.
Investors though will be now watching for QBE to update the market as to the damage to its US insurance businesses from the twin storms - Harvey in Houston and Irma in the Caribbean and southwestern Florida.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.