QBE has blamed continued medium-term pressure on earnings on low investment yields.

CFO Neil Drabsch told a Citi Australian investment conference last week that diminished prior-year claim provision releases, inflation concerns and increased regulations are also having an impact on earnings.

He says while insurance markets remain competitive, QBE is resistant to more fundamental change despite conditions of weak economic recovery and low investment yields.

The conference heard QBE’s premium rates have jumped by 2% to 3% on its renewed business.

Mr Drabsch says reinsurance rates are soft, with the only increases on event-driven criteria such as marine and energy risks.

He warned investors to be cautious of any discount rate movements at the end of the year.

“Market conditions remain soft although underlying insurance business and portfolios are sound,” Mr Drabsch said.

In a bid to combat the low investment yields, QBE is focusing on its key profit drivers such as reinsurance costs and combined commission and expense ratios.

“However, a minimum 15% return on equity target for each product remains, despite lower investment yields,” Mr Drabsch said.