QBE has raised its expectation for premium growth this year and says its outlook for the remainder of the year remains positive after the first-half bottom line was hit by volatile investment markets amid a turbulent environment.

“Geopolitical instability, inflation and a remarkable recalibration in global interest rates have led to a challenging operating environment in the first half,” Group CEO Andrew Horton told a briefing.

“Whilst these factors have clearly had an impact on our business, I think we have delivered a good result. Positive momentum and improved resilience in the business have clearly continued into this year.”

Net profit dropped to $US151 million ($215 million) from $US441 million ($628 million) including investment portfolio impacts and a cost related to action taken on the US excess and surplus line. The company also recorded a previously announced $US75 million ($106.8 million) charge for remediation for Australian pricing promises not fully delivered.

Gross written premium rose 18% on a constant currency basis, including a sharp rise in the US crop business, while group-wide renewal rate increases averaged 8.1%. The company raised its full-year outlook to GWP growth of around 10% compared to high single digits previously.

The adjusted combined operating ratio for the half improved to 92.9% from 93.3%.

QBE says, looking across global markets, that pricing has eased in areas such as directors’ and officers’ and US workers’ compensation, but short-tail lines, where inflation and supply chain bottlenecks are a factor, are seeing premium increases.

“In some of the liability lines across our portfolio we are seeing rates stall and even decrease,” Mr Horton told insuranceNEWS.com.au. “The property side is being driven by inflation at this point, so as the cost of repairing properties has gone up, and it’s not purely an Australian issue it’s everywhere, it is maintaining rate.”

QBE has previously outlined six strategic priorities including portfolio optimisation and leveraging the expertise and experience that exists across the company as knowledge is shared.

“What we have done quite well over the past six months is bring leadership cohorts together, so rather than just having a group executive committee of people who cover all lines of business, all geographies, we have broadened that out to various leadership networks,” Mr Horton said.

“Similarly, we have set up a number of working groups that are cross company and therefore again those networks are building up.”

S&P Global Ratings says the company should see earnings rebound in the second half, and the lower combined operating ratio in the first six months highlights the focus on risk selection and pricing.

“Under CEO Andrew Horton, now one year with QBE, the promise of greater resilience and earnings predictability looks to be on track with improved underlying performance and few own goals - the Australian pricing remediation being one,” S&P said.