Frank O’Halloran has typically focused not on the group’s loss for the year but on the hopefully brighter future.“The full benefit from the recent premium rate increases is expected to flow through to earnings in the second half of 2002 and in 2003.”QBE’s CEO said the company remains on track to record a gross written premium of $7.4 billion (compared to $6.79 billion last year) and an insurance margin of between 6% and 6.5%.

Cashflow from operations for the half-year was very strong at $455 million, compared with $110 million for the corresponding period last year. Gross earned premium was also up 15% to $3.5 billion, while net earned premium increased 18% to $2.7 billion.

Claiming a combined operating ratio that improved to 99% from 102.2% in 2000/01, QBE said that the improvement reflects the elimination of unprofitable business over the past two years, premium rate increases averaging more than 20% across the group and lower-than-expected claims experience in the first half.

“Our focus on profitability has been rewarded with improved insurance results for all divisions,” Mr O'Halloran said.

He is “very pleased” with the performance of the company’s Australian, Asia-Pacific and Lloyd’s operations, which each produced underwriting profits and exceeded the group’s projected insurance profit targets.

“The actions we have taken over the past 18 months to concentrate our insurance business in areas that are most likely to produce targeted margins, and the significant improvement in market conditions, give us a high degree of confidence that we will produce increased returns for our shareholders,” Mr O’Halloran said.