The issue of consolidation seems to be hotting up after QBE Insurance indicated it will consider looking at rivals IAG and Promina if it continues to perform better than them on the sharemarket.

But CEO Frank O’Halloran says the company still views overseas bolt-on acquisitions as more attractive than local acquisitions.

“If that changes, then obviously we may well start to do some work,” he told the company’s annual general meeting. “At the moment, we can create more wealth for our shareholders from bolt-on acquisitions.”

Mr O’Halloran says the group is not involved in discussions with any local competitors. But it is in talks with five insurers throughout the Americas, Europe and Asia, representing gross premiums between $55 million and $410 million.

“The acquisitions that we are making… are more earnings per share accretive than an Australian acquisition would be,” he said.

QBE is also still looking to bolster its local retail business. “We would like to have a strong retail book in Australia, but at the right price.”

However, it’s more likely to happen in two years than in the next 12 months.

Last year QBE Insurance posted a record $1.1 billion net profit after tax, despite the worst year on record for large catastrophes, which produced net claims of $515 million before tax, compared with $320 million in 2004. Net earned premium grew from $4.6 billion to $7.4 billion.

Mr O’Halloran says the insurer is aiming for after-tax operating profit growth of more than 10% this year.