QBE announced today a 41% jump in after-tax net profit to $US550 million ($818 million) for 2019, as hardening rates partially cushioned the business from significant Australian bushfire claims and weaker results from its US crop portfolio.

The business enjoyed average renewal rate increases of 6.3%, up from 5% in 2018, with the Australia Pacific segment leading the way at 7.3%.

Adjusted cash profit rose 6% to $US733 million ($1.09 billion).

“Despite the impact of adverse weather conditions on our North American crop business, the underlying fundamentals of our business remain strong and we continue to see improvement in both the quality and resilience of our earnings,” Group CEO Pat Regan said.

“In 2019 we made substantial progress across all our strategic priorities and recorded especially pleasing results in Australia Pacific and International.

“With strong pricing momentum, non-core asset sales completed and having significantly strengthened reserves in portfolios facing more challenging industry-wide inflationary trends, we enter 2020 with strong prospects for further sustainable margin improvement.”

Overall gross written premium (GWP) declined slightly to $US13.44 billion ($20 billion) from $US13.66 billion ($20.3 billion), and the business made an underwriting loss of $US2 million ($2.9 million), which was blamed on the weak results from its US unit.

Adverse weather in the US severely affected the US crop business, which caused the North America segment to report a weaker combined operating ratio of 106.5%, down from 98.7% in 2018.

QBE’s overall combined operating ratio deteriorated to 100% from 95.9%. For this year, the group is aiming for an improved ratio of 93.5-95.5%.

Its Australia Pacific business suffered a 4.4% decline in GWP to $US3.92 billion ($5.8 billion), but was 3% higher on a constant currency basis.

The group says the business will continue to “adjust its catastrophe models” this year as part of ongoing efforts to assess the expected impact of climate change until 2100.

Last year the insurer partnered catastrophe modelling firm RMS to assess the impact of US hurricanes and Australia cyclones on its business.

“While we already have a robust quantification of QBE’s exposure to weather events, this refinement of our models can provide insights into the magnitude and timing of the impact that climate change will have on our business,” the insurer says.

“Over the long term we anticipate that the physical impacts of climate change will result in our customers seeking increased insurance for the protection of their assets and the services they provide.”