UPDATE 1-Australia's QBE net profit slides 18 pct in first half
(Updates with plans for partial float of mortgage insurance business, capital raising, outlook)
SYDNEY Aug 19 (Reuters) - QBE Insurance Group, Australia's biggest insurer by premium income, announced plans to partially float its mortgage insurance business and a $750 million capital raising as it posted an 18 percent drop in first-half net profit.
QBE, which has been grappling with hefty claims because of a range of adverse weather events in North America, plans to cut $500 million of convertible subordinated debt through the $750 million share placement.
It also plans asset sales and a partial share offer next year of mortgage insurer QBE LMI, which had $1.2 billion in assets at the end of June.
The company will raise $700 million in Tier-II debt, mainly to replace senior debt.
"When executed, these initiatives deliver significant additional cash and capital resources that will substantially improve the group's financial flexibility and ability to better withstand a reasonable range of downside scenarios," the insurer said in a statement.
The Sydney-based company expects its debt-to-equity ratio to fall as a result of those steps to its targeted range of 25 percent to 35 percent from 38.4 percent now.
QBE said its net profit after tax for the six months ended June 30 was $392 million, in line with a profit warning issued last month, and down from $477 million a year ago.
The results were hit by higher claims in Argentina, crop damage in Latin America, UK floods and storms in North America and Europe. Continuación...