300000000 QBE Capital Funding LP - Irish Stock Exchange

any particular agent. Certain brokers and agents with limited authority write certain policies on our behalf, but
only up to a specified amount of cover and within prescribed parameters. We do not rely on any single broker or
agent for a significant portion of our Australian business. Additional distribution channels include banks and
other financial institutions. More recently, there has been an increase in the commoditization of selected product
lines of general insurance products, consolidation of distribution channels and the establishment of new lines of
underwriting.
Pacific Asia Central Europe (PACE)
The PACE division conducts general insurance business outside Australia in 25 countries throughout the
Asia-Pacific and Central European regions: Bulgaria, China, Czech Republic, Denmark, Estonia, Fiji, French
Polynesia, Hong Kong, Hungary, Indonesia, Macau, Macedonia, Malaysia, Moldova, New Caledonia, New
Zealand, Papua New Guinea, Philippines, Singapore, Slovakia, Solomon Islands, Thailand, Ukraine, Vanuatu and
Vietnam. We have had a representative office in China since 1996. We provide personal, commercial and
specialist insurance covers, including professional and general liability, marine, corporate property and trade
credit products. We have had a presence in the Asia-Pacific region for over 100 years, and have a well known
brand name and strong market share in most countries in this region.
The PACE division tends to be more capital intensive than our other divisions because of the number of
jurisdictions in which we operate in these regions. However, we believe these are still important and profitable
markets for us, as evidenced by the claims ratio for this division. Our strategy is to continue to increase business
retention and grow our specialist product lines through international and local insurance brokers. We are
considering several acquisitions that are compatible with our existing operations.
The majority of our ongoing operations in the Asia-Pacific and Central Europe regions were profitable
for the year ended December 31, 2005, however operations in Macedonia, Moldova and our Vietnam joint
venture produced small underwriting losses. Our recent developments include:
• selling our 50% share of the QBE-BIDV joint venture in Vietnam 2005, effective January 1, 2006;
• acquiring the wholly-owned business of Allianz in Vietnam in 2005, effective January 1, 2006;
• acquiring Nordic Aviation in Denmark in 2006;
• acquiring businesses in Singapore, including Zurich Insurance (Singapore) Pte Limited in June 2004
significantly increasing the size of our Singapore operations;
• launching a specialist marine underwriting agency in Singapore;
• acquiring two businesses in Papua New Guinea, increasing our market share to over 50% of the
property and casualty market in that country;
• merging our two Hong Kong operations; and
• finalizing a joint venture in Malaysia with MBF Capital Berhad.
For a summary of certain financial data and key ratios for our PACE operations for the years ended
December 31, 2005 and 2004 see “Management’s Discussions and Analysis of Financial Condition and Results
of Operations.”
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