QBE Australia has forecast 24% growth in gross written premium (GWP) next year despite the effect of a strong Australian dollar.

CEO Terry Ibbotson says he is targeting $4.2 billion in GWP next financial year – up from an expected $3.4 billion in 2009.

The international group’s Australian operation has increased rates by 7.2% so far this year, although Mr Ibbotson says rival insurers in the commercial sector were initially slow to increase their rates, making competition very strong in the first half.

The impact of the global financial crisis on economic activity, lower asset values and reduced turnover had a negative effect on premiums.

Mr Ibbotson believes sustained adverse weather patterns and retention of key staff will be key challenges in the future.

Next year will see the full benefit of rate increases flow through and strong growth expected from increased distribution through corporate partners and the recently acquired Elders rural insurance operation.

Group CEO Frank O’Halloran says QBE’s overall financial results are on track, although the stronger Australian dollar is affecting the top line. The group is now considering reporting its results in US dollars next year rather than Australian dollars.