QBE Insurance Group has recorded an increase in operating profit of 20% for the six months to June 30, reflecting the benefit of premium growth through acquisitions made last year.

The operating profit after tax of $591 million was also realised by improved insurance margins and higher than expected overall premium rate increases.

Gross written premium was up 10% to $5.7 billion and net earned premium was up 14% to $4 billion. The group’s insurance profit before tax rose 35% to $748 million – 18.7% of net earned premium. Last year insurance profit before tax was 15.8% of net earned premium.

CEO Frank O’Halloran says the group reported a substantial increase in profit, solid premium income growth and improved insurance margins across all divisions, giving greater confidence for profitability for the rest of this year and into 2007.

“QBE’s geographic spread and product diversification have been beneficial, with overall weighted average premium rate increases for the group in the half year of 6.5% being well ahead of our initial expectations of around 4%,” he said.

“The overall rate increases achieved by our European and American operations have more than offset the slight reduction of around 3% on average in premium rates in Australia for the half year.”

QBE’s 2006 insurance profit target of 16-17% of net earned premium has been upgraded to 17-18%.