QBE shares fell to their lowest closing level since early March 2009, losing $1.00, or 5.56 per cent, to $16.97 after foreshadowing its results for the six months to June 30.
Australia's largest insurer by market value released the figures as it announced it would now report in US dollars.
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The change reflects QBE's international expansion, with 75 per cent of its business currently written in 48 nations other than Australia, and more than half its premium income made in US dollars.
QBE's preliminary first half net profit was expected to be down about 40 per cent from the previous corresponding period, due to losses in gross investment on shareholders' funds, it said.
Fall put down to equity losses
The fall is a result of $US228 million ($A254.72 million) in equity losses, compared with $US102 million in the previous corresponding period.
The previous year's first half investment income also benefitted from one-off gains on foreign exchange and debt repurchases.
"The continued excellent underwriting results have been more than offset by significantly lower investment income from reduced interest yields, the fall in equity markets and one off gains in the first half of 2009," chief executive Frank O'Halloran said in a statement on Monday.
Updated figures show first half profit in 2009 was $US720 million, implying a first half profit of about $US430 million (A$490 million) will be reported in August.
Analysts were also concerned with QBE's preliminary first half insurance profit and margin, which came in under expectations.
Insurance profit expected to be up
Insurance profit was expected to be up by about seven per cent to $US820 million ($A916.10 million), while the insurance profit margin would be 15.7 per cent, QBE said, below its 16 to 18 per cent target range.
The insurer said the margin was impacted by lower interest yields on claims provisions, reduced yields on policy holders funds and the record level of catastrophes in the period.
"It is disappointing," Tyndall analyst Jason Kim told AAP.
"The question is can they get at least 16 per cent for the full year?
"Of course they're starting from behind, so the market is a bit concerned about that."
Mr O'Halloran maintained QBE's 16 to 18 per cent insurance margin target range for the full year, although it's conditional on no further reductions in risk free interest rates and large individual risk and catastrophe claims not exceeding the group's allowance.
QBE said first half gross written premium growth was expected to be 20 per cent in the first half to $US6.9 billion ($A7.71 billion), with net earned premium up 19 per cent to $US5.2 billion ($A5.81 billion).
Acquisitions in the six months to June were expected to improve annual profit by about $US400 million and increase premium income by about $US2.3 billion by 2013, QBE said.
"We will continue with our successful strategy of growth through carefully selected acquisitions which add to QBE's already significant geographic spread and product diversification," Mr O'Halloran said.
Despite the lower profit, QBE's interim dividend will be maintained at 62 cents, with the insurer saying cash flow remained strong.
