Long-suffering QBE shareholders might have to wait longer yet for their investment to recover

Long-suffering QBE shareholders might have to wait longer yet for their investment to recover. The global insurer will be one of the ASX stocks worst--affected by the European Central Bank's recent monetary actions to boost eurozone growth, devalue the euro and avert deflation. Global bond yields therefore look like remaining lower for longer, and in 2013 69 per cent of QBE's investments were exposed to offshore currencies. Low bond yields increase the book value of QBE's fixed interest investments but also inflate the present value of future claims. The effect on investment income is less ambiguous. QBE's net yield on investments backing policyholders' and shareholders' funds fell to a meagre 2.6 per cent in 2013 from 4.1 per cent in 2012, sending investment income 36 per cent lower. This important contributor to profitability now looks like staying depressed in the second half of 2014. Access full article here. (VIEW LINK)