QBE Insurance Group says it will continue to pursue cross-divisional opportunities and consistency as it looks to drive growth amid an environment that remains challenging.

Group CEO Andrew Horton says the company has shown improved resilience, achieving a full-year combined operating ratio of 93.7% compared to 95% a year-early despite headwinds from a surge in inflation, catastrophes and geopolitical tension.

Reported net profit rose to $US770 million ($1.12 billion) compared with $US750 million ($1.09 billion) a year earlier as gross written premium rose 13% to $US20.1 billion ($29.1 billion).

QBE expects gross written premium growth to be in the mid-to-high single digits this year and the combined operating ratio to be around 93.5%, based on the existing accounting standard.

Mr Horton told insuranceNEWS.com.au that he was also pleased by stability in the group’s leadership roles since taking up the CEO position around 18 months ago, and says the insurer has “great foundations” as it looks forward and reduces volatility.

“We have genuine momentum behind us, returns are improving and we’re building a more consistent business,” he said. “Our confidence in the medium-term outlook for QBE is high and has been building progressively over the year.”

Mr Horton says the company remains cautious about the inflation outlook, particularly in long-tail classes, while it is putting rate increases through to keep ahead of rising costs in areas such as property.

The group is not a major player in the motor area, where other companies have reported a surge in costs in the second half of last year due to increased accident frequency, parts and labour shortages and surging second-hand vehicle costs.

Australia Pacific GWP last year rose 9% to $US5.24 billion ($7.59 billion), with premium rate increases averaging 9.5% after they steadily built over the course of the year. The combined operating ratio improved to 90.1% from 91.4%.

The North America business reported a return to underwriting profitability for the first time in four years, with the combined operating ratio at 98.9% compared to 102.9% the previous year.

The International division combined operating ratio deteriorated to 92.5% from 90.6%, reflecting inflationary pressures, an adverse covid business interruption judgement, costs associated with the Russia/Ukraine conflict and catastrophe experience.

Group net catastrophe claims costs increased to $US1.060 billion ($1.54 billion) compared to the allowance of $US962 million ($1.39 billion), as flagged in a November update. The allowance has increased this year to $US1.175 billion ($1.70 billion), reflecting higher reinsurance retentions and exposure growth.

QBE also said it had entered into a reinsurance transaction with Enstar to de-risk its exposure to a portfolio of North America and international long-tail reserves totalling about $US1.9 billion ($2.75 billion).

S&P Global Ratings said the net profit result was ahead of its forecast, and a focus on business quality, premium rate adequacy and balance sheet protections should support earnings and further top-line growth this year.

“The result reflects recent company actions to improve resilience and consistency amid a spike in global natural catastrophes and interest rate volatility,” it said.