With its hopes of a return to billion dollar profits this year seemingly foiled, insurer QBE is raising funds and selling off businesses in an effort to keep shareholders and ratings agencies on side.
The global insurer on Tuesday reported an 18 per cent slide in its first half profit to $US392 million ($A424.13 million).
And chief executive John Neal admitted the insurer's previously-stated expectation of a more-than $US1 billion profit this year was unlikely to come to fruition.
"It's not impossible, I think if we had a very quiet north American hurricane season it (would be) possible but it's not our working assumption," he said.
"Our working assumption is 2015 will see us back to that shape."
QBE expects its full year insurance profit margin to be between eight and nine per cent, which puts it on track for a full year profit of around $US850 million.
And the insurer has unveiled a string of measures to improve its balance sheet and give it greater room to move.
They include the float of its Australian lending mortgage insurance business in 2015, the sell-off of agency businesses in the US and Europe and a $US750 million capital raising.
Chief financial officer Pat Regan said the moves would reduce debt levels and help improve QBE's standing with ratings agencies.
"We've looked at this as an opportunity to reset the way we approach our balance sheet, to have higher and more resilient capital levels and to substantially improve our ratings agency metrics," he said.
QBE plans to retain a majority stake in the mortgage insurance business but says the float would give it a new shareholder base to help fund its future growth.
The float, along with the sale of the North American and European agency businesses is expected to raise about $US1.5 billion.
Meanwhile, QBE is looking for growth opportunities, though it would be disciplined about any acquisitions it made.
"Growth is part of the agenda, acquisitions are part of the agenda but strategic in design," Mr Neal said.
IG market strategist Stan Shamu said the internal shake-up appeared to be designed to appease shareholders after a run of disappointing results.
"I think investors might have gotten to that stage where they are a little bit fed up with how things are going so drastic measures were something that was required," he said.
QBE's latest result was weighed down by a $US170 million capital injection to address problems with its Latin American business.
The move, which amounted to the fourth profit downgrade issued under Mr Neal, who replaced long-serving chief executive Frank O'Halloran in 2012, saw QBE shares dive 11 per cent in one day last month.
But Mr Neal says QBE's underlying performance has improved and the asset sales and capital raising will help strengthen the company.
QBE shares have been placed in a trading halt while the company carries out the institutional component of its capital raising.
QBE's PROFIT SLIDE
* Net profit of $392m, down 18pct from $477m in 2013
* Gross written premium of $8.49b, down 10pct from $9.45b
* Interim dividend of 15 cents, down from 20 cents
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