UPDATE: QBE Buys Renewal Rights Of Brit Insurance UK Regional Operations

QBE Insurance Group Ltd (QBE.AU) has bought the renewal rights of Brit Insurance's regional operations, which could give Australia's largest insurer an estimated 5% of the U.K. market share from next year.

Almost 130 staff from Brit's underwriting team will transfer to QBE as part of the merger, which will create an entity with an ongoing gross premium of more than GBP500 million spread across 10 U.K. locations.

Buying the renewal rights from an insurer is a means of taking over clients when they renew their insurance policies without assuming any liabilities or capital from the acquisition.

QBE's incoming chief executive, John Neal, forecast at the insurer's annual general meeting on Wednesday the company's gross written premium will rise to US$800 million by next year, equivalent to around 5% of the U.K. market.

And he said the insurer would continue to grow through its strategy of bolt-on acquisitions--deals that add no more than $US400 million of premium income--this year thanks to its improving balance sheet, with several small potential targets already "in its line of sight."

"We waited three, four years for Brit Insurance," he told journalists at the meeting. "We're waiting for the right time."

QBE has already made three other acquisitions so far this year, including the general insurance businesses of HSBC Argentina Holdings and Hang Seng Bank, both subsidiaries of HSBC Holdings, for US$420 million, and Puerto Rican underwriting business Optima Insurance Group in a deal completed in February.

QBE had a disastrous year in 2011 after a record number of catastrophes worldwide saw its net profit plummet 45% from a year earlier to US$704 million.

But departing Chief Executive Frank O'Halloran, who will step down in August, said the company had seen a "superb" first quarter, with large risk and catastrophe claims over the three months expected to be US$700 million lower than a year earlier.

-By Caroline Henshaw, Dow Jones Newswires; 61-2-8272-4689; caroline.henshaw@dowjones.com

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