QBE says it expects “moderate price reductions” in its controversial North American force-placed insurance business.

Executives told investors and analysts in New York last Friday the company is in consultation with regulators over the pricing of the insurance, which is home cover placed by banks against the homeowner allowing their policy to lapse. The cost is then passed onto the homeowner.

The sector has attracted action by regulators over allegations that premiums are much more expensive than on normal home insurance.

Analysts have questioned how much premium cuts will reduce QBE’s profits, with forecasts of cuts ranging from single digits to 35%.

QBE North America CEO John Rumpler says the group predicts gross written premium of $US6.6 billion ($6.4 billion) this year.

He says it is a year to focus on consolidation following acquisitions.

QBE North America expects overall rate increases of more than 6%, with property lines leading the rise.

It says the US drought could result in significant gross losses for its US crop business, despite government protection. But it says it can manage its maximum probable exposures to a net combined ratio of about 102%.

QBE is the third-largest crop insurer in the US, with 15% of the multi-peril crop market. It has forecast gross written premium of $US1.63 billion ($1.59 billion) from the business this year.