QBE has changed its mind about a possible sale of its U.S.-based middle market business, months after confirming that it was under strategic review.

Why the change? It seems there’s been a bit of a turnaround, CEO John Neal said during QBE’s 2014 second quarter investor call.

“We made a decision to retain our middle market business in North America,” Neal said, scoffing at the notion that the move comes from a lack of interest in the business line.

“The completely reverse is true,” he said. “We were overwhelmed by interest in that business, frankly, and the parties that were interested in making an acquisition [of] it.”

Rather, Neal explained, QBE has reconsidered because the performance of the U.S. middle market business has stabilized through the first half of 2014.

“Client retention rates are now back to the levels we were targeting,” Neal said. “And the claims ratio is doing exactly what we needed to do.”

That said, Neal emphasized that QBE will focus on three areas of improvement for its North American middle market business in the near future.

“We will further enhance the relationship we have with distribution partnerships, [and] smarten up technology used for point of sale underwriting and sales of product,” Neal said.

In addition, Neal cryptically noted that QBE will look at “taking more cost out of that business.”

Still, he emphasized: “We value it and consider it a key component of our North American plans going forward.”

That doesn’t mean that QBE won’t be getting rid of some of its North American business, however. The company announced with its Q2 earnings release that it would be selling off some assets as part of its two-year focus to stabilize earnings and make them more predictable.

Neal noted during that call that the company’s plans include the sale of its North American agencies and the partial sale of its Australian agencies. But QBE will keep control of the underwriting.

Separately, QBE plans to complete the sale of its Central and Eastern European operations through the second half of this year, as part of its push to get rid of non-core assets.

Topics USA Commercial Lines Business Insurance