QBE has reported a 14% drop in gross written premium (GWP) for its Australasian operations last year, to $US3.7 billion ($5.1 billion).

Group CEO John Neal told insuranceNEWS.com.au the result reflects a very competitive market.

“We have seen some personal lines average premiums becoming smaller,” he said.

“But our traditional commercial portfolio grew by about 5%, despite premium rate decreases in most products.”

Unfavourable currency exchange rates were another factor in premium decline, as the US dollar strengthened by 16% on an average basis.

Despite increasing its Australasian business last year, QBE recorded lower claims.

Net claims for the operation were $US2 billion ($2.7 billion), compared with $US2.2 billion ($3 billion) in 2014. QBE was hit by a number of catastrophe claims, with NSW storms in April costing $US58 million ($80.2 million) and a Sydney hailstorm the same month at $US29 million ($40 million).

The underwriting result was $US286 million ($395 million) for the year, compared with $US498 million ($688 million) in 2014.

The combined operating ratio deteriorated to 91.3% from 87%.

QBE recorded lower GWP in almost all its international operating divisions last year.

North America GWP fell to $US4.9 billion ($6.7 billion) from $US5.3 billion ($7.3 billion). Europe dropped to $US4.3 billion ($5.9 billion) from $US4.5 billion ($6.2 billion), and emerging markets were flat at $US1.7 billion ($2.3 billion).

Despite this, the international divisions delivered stronger pre-tax insurance profit.

North America lifted profit to $US93 million ($128 million) from $US8 million ($11 million). Europe increased to $US464 million ($641 million) from $US345 million ($477 million), and emerging markets also almost doubled to $US71 million ($98 million).

QBE sold four non-core businesses last year.

Australian agencies and US agencies were sold at a profit for $US130 million ($179.7 million) and $US12 million ($16.5 million) respectively.

The Argentine workers’ compensation and mortgage and lender services business were sold for losses of $US58 million ($80 million) and $US133 million ($184 million) respectively.

Lower investment income and financing costs resulted in QBE Group’s after-tax profit falling to $US693 million ($958 million) from $US749 million ($1 billion).

Mr Neal says GWP is expected to remain flat at $US14.2-$US14.6 billion ($19.6-$20 billion) this year.

“While there are some green shoots, the market competition will remain stable.

“If there is any gain it will be in line with GDP, but when looking at our entire portfolio there will be some moderate growth.”

One source of potential premium growth is emerging markets, Mr Neal says.

He has ruled out more asset sales this year. “We have no plans to dispose of any more businesses.”