Insurance firm QBE has placed its structured trade and political risk businesses under “strategic review”, GTR can reveal.

A frustrated source that was on the cusp of closing a deal with the firm tells GTR that QBE issued a surprise formal notification to clients on Monday September 5 stating that no more business will be signed.

To read the note that QBE sent to brokers, click here.

Multiple sources with knowledge of the event tell GTR that the business closed because of a staff walkout and that many of the QBE team has moved to rival firm XL.

A QBE spokesperson would not comment on this.

The QBE spokesperson confirmed that the firm’s terrorism and political risk business within the Marine and Energy division is unaffected by this review and continues to actively write business.

Richard Maxwell is the firm’s global head of structured trade and political risk, while Joe Blenkinsopp heads up the business in Europe, Middle East and Africa.

The niche market of political risk insurance is usually a smaller part of a general insurance firm’s book and can sometimes struggle to justify its existence, as happened when Chubb closed its structured trade and political risk business in May 2010.

A number of bankers have highlighted to GTR that the exit of QBE from the market is possible evidence that the insurance market is not equipped to support structured trade, making some banks reluctant to invest in it.

However, Stephen Capon, country and credit risk management political risk and credit at Ace Global Markets, refutes this: “The idea that the resignation of a team from QBE represents some kind of structural weakness in the political risk and structured trade credit segments of our market is wholly misguided and represents a fundamental misunderstanding of what has been happening in the market over the past five years. STC remains a key part of the product offering for specialist political risk and credit underwriters.

“The team leaving QBE are understood to be going to XL so there is not any reason to anticipate any meaningful loss of market capacity. The net result should be neutral on the market.

“Over the past five years, more capacity has entered the political risk and STC market than has left it. We have also seen major reinsurance markets re-entering over the past 18 months and there are signs of further reinsurance capacity entering over the coming months.

“The core primary and reinsurance companies operating in political risk and structured trade credit remain the same today as they were in 2007. Critically, given the losses of 2008 through 2010, it is a testimony to the commitment of the core players in our market and their understanding of the value of the products that there has been real stability of capacity.

“Indeed, while bank secondary markets have been incredibly volatile and effectively closed, the insurance market has been very stable. The market has proven its resilience over the past three years and we continue to see new clients entering the market – banks and corporates.”