* Earnings hit by higher claims in emerging markets
* QBE profit forecast cut by 6 pct - analyst
* Shares fall 8.5 percent
* 'People are angry' - analyst (Recasts with share price, adds analyst comment in graf 4 and 6)
By Jamie Freed
SYDNEY, June 21 (Reuters) - QBE Insurance Group said on Wednesday it would report lower than expected earnings due to underwriting losses in its emerging markets division, frustrating investors and sending its shares down by 8.5 percent.
Australia's No. 1 insurer by premium income said an increase in weather-related claims in Latin America and a higher frequency of medium-sized risk-related claims in Asia would lift its combined operating ratio by 1 percent from earlier guidance.
A higher combined operating ratio translates to lower underwriting profits for insurers.
"We estimate it is about a 6 percent profit downgrade," Shaw and Partners analyst David Spotswood said.
"It is another stuff-up by QBE. The management, their track record is in tatters. They have got a 20-year track record of missing numbers and making mistakes."
The company did not warn of any problems in its emerging markets business at its annual meeting in early May.
"They had their AGM and they were confident and a couple of months later, bang," Spotswood said. "People are angry."
The company had been taking steps to boost earnings and reinstate investor confidence after years of underperformance. Those efforts include cutting costs, putting in place a comprehensive re-insurance plan, changing management teams and selling non-core or underperforming businesses.
QBE Chief Executive John Neal said in a statement the company was "encouraged" by an improvement in the combined operating ratio in Australia, New Zealand and North America as well as a good performance in Europe in the first five months of the financial year.
But he said the heightened claims activity in emerging markets would drag down the company's results. QBE forecasts a combined operating ratio of about 110 percent in the emerging markets division. A ratio of more than 100 percent indicates underwriting losses.
The company's overall combined operating ratio is now forecast at 94.5 percent to 96 percent, compared with February guidance of 93.5 percent to 95 percent.
The company forecast interim insurance profit margin to be in the range of 8.5 percent to 9.5 percent. It reported insurance profit margin of 9.7 percent in 2016.
The insurer, which generates almost three-quarters of its premiums abroad, said in February it expected the market to remain challenging in 2017 though there were indications of a modest improvement.
QBE shares are trading at the lowest level since March. The company declined to comment beyond its statement to the market. (Reporting by Jamie Freed in Sydney and Anusha Ravindranath in Bengaluru; Editing by Stephen Coates)