QBE has reported a 21% rise in gross written premium (GWP) to $US13.6 billion ($13.4 billion) for the year ending December 31. But the group’s net profits have fallen 17% to $US1.2 billion ($1.1 billion).

Catastrophe claims helped reduce QBE’s bottom line, with cat claims for 2010 amounting to $US385 million ($380 million), compared to zero in 2009.

These claims, after reinsurance, include $US100 million ($98.7 million) for the Queensland storms, $US100 million for Cyclone Yasi ($98.7 million) and $US175 million ($172 million) for the Christchurch earthquake.

The group was also hit with lower cash and foreign investment yields which were a negative $US325 million ($320 million).

QBE also held a large amount in outstanding claims at the end of the 20120 financial year: $US15 billion ($14.8 billion) compared to $12.8 billion ($12.6 billion) in 2009.

In the US, its GWP was up 29% to $US5.1 billion ($5 billion), compared to $US4 billion ($3.9 billion) in 2009. European GWP was up 5% to $US4.1 billion ($4 billion).

Australian GWP rose 36% to $US3.7 billion ($3.6 billion), helped by the Elders acquisition.

QBE’s captive reinsurer Equator Re delivered a 24% increase in GWP to $US2.4 billion ($2.3 billion) for the 12 months.

These regional results saw QBE report an increased insurance profit to $US1.7 billion ($1.6 billion) for 2010 compared to $US1.6 billion ($1.5 billion) in the previous year, despite increases in claims and disaster events.

Group CEO Frank O’Halloran says all divisions are “in good shape” with strong underwriting profit and premium growth ahead of target.

“The acquisitions announced in 2010 are expected to add more than $US3.4 billion ($3.3 billion) of GWP during the full year,” he said.

Looking ahead, Mr O’Halloran expects a 2% increase in overall average premium rates during the current financial year based on limited organic growth in soft insurance markets.

He says 2011 will be a difficult year for the insurance industry, with premium rate increases less than claims inflation.

“We are confident that, with the actions we have taken, QBE’s prospects for achieving quality underwriting results will be maintained,” Mr O’Halloran said.

“We will continue our focus on building our business through acquisitions and positioning the business to take advantage of stronger economic growth.”