QBE claims the turnaround of its North American business is “on track” after the division posted a $US482 million ($521 million) underwriting loss last year.

Chairman Marty Becker says the region’s combined operating ratio should move below 100% this year, having risen to 115.8% last year.

“We would not expect North America to grow this year as we continue to work on the businesses that it has, but it ought to reach a point of stability and therefore have better prospects for the future,” he told the annual general meeting.

Mr Becker says mortgage industry problems following the global financial crisis have affected the North American division, while adverse weather hit the crop insurance operation and the program business underestimated reserving levels.

“There have been three totally unrelated events that came together in a perfect storm at the same time and created an awful result for our shareholders,” he said.

Mr Becker, who took over as chairman from Belinda Hutchinson on April 1, says two of the three problems were outside QBE’s control.

Group CEO John Neal told the meeting an extensive investigation by internal and external actuaries has ensured claim reserves in North America are now appropriate.

“While we are only three months into [the year], this division is on track to meet its 2014 plan,” he said.

QBE reported a net after-tax loss of $US254 million ($274 million) last calendar year, mainly due to increased prior-accident-year claim reserves and North American writedowns.

Mr Neal says company transformation programs will provide a solid base this year and QBE is maintaining its target for an overall combined operating ratio of 93% and underlying insurance profit margin of about 10%.

European market conditions remain challenging, while the Australian and New Zealand business is “well positioned” for sustained profitable growth.

QBE is on course to deliver operating cost savings of $US250 million ($270 million) by the end of next year, with benefits flowing quicker than planned in the Australian and New Zealand operation, Mr Neal told shareholders.