Insurers are facing growing community unease at the unprecedented high profits they are achieving, so stand by for plenty of bombast from commentators over the next few weeks as the December 31 results roll out.

Wesfarmers is the first cab off the rank to release its half-year results, and it must be very happy with the contribution being made by Lumley General, the insurer it acquired in 2003.  While the diversified group’s overall profit for the six months stood at $291.2 million – a 2% drop on the corresponding period for 2003/04 – its insurance division recorded a strong result.

Wesfarmers’ insurance division earned premium revenue of $514.3 million and earnings before tax of $69.1 million. Its divisional insurance margin was 18.5% and the divisional combined operating ratio was 85.1%.

Lumley General contributed a 4.6% increase in gross written premium for the period. Wesfarmers Federation Insurance also did well, with a record result despite an increase in crop claims.

Wesfarmers’ insurance division CEO Bob Buckley says the business is benefiting from the integration of Lumley. He expects “modest top-line growth” and more industry competition, with rates moderating and the industry experiencing a gradual return to long-term claims patterns.

Market leaders QBE, IAG and Promina will release their results on February 24 and Suncorp will release its results on February 25.