QBE has forecast a strong pricing environment is likely to continue this year after a surge in gross written premium drove an earnings rebound.

The insurer reported a $US750 million ($1.04 billion) net profit compared with a $US1.52 billion ($2.11 billion) loss in the previous year as new CEO Andrew Horton set the agenda for the company to become a “consistently high-performing enterprise” following the yearly ups and downs of the past.

GWP grew 22% to $US18.46 billion ($25.65 billion), with renewal premium rates increasing an average 9.7% across the group. The adjusted cash profit return on equity was 10.3%.

Drags on the result included a higher level of catastrophe claims and lower net investment income, but each of the company’s regional division reported an improved combined operating ration compared to the previous year.

“In targeting ongoing premium growth, we will remain vigilant in pricing adequately for an appropriate risk-adjusted return on capital, with claims inflation, catastrophe costs and overall portfolio volatility key areas of ongoing focus,” Mr Horton said.

Catastrophe claims for the year rose to $US905 million ($1.26 billion) or 6.6% of net earned premium, up from $US688 million ($955.9 million), or 5.8% in the prior year, and 0.9% above the group’s increased allowance.

QBE forecasts GWP growth is likely to be in the “high single digits” this year, with the industry operating environment remaining highly uncertain.

Mr Horton, who took up the top role in September, flagged a focus on building on areas where the company has strengths and can achieve strong margins, with major remediation largely completed. The group last month launched a new vision, purpose and set of strategic priorities.

“Insurance is a medium-to-long term game. It is very difficult to chop and change and in some parts of the group we have done that over the past five or 10 years,” Mr Horton told insuranceNEWS.com.au.

“I feel with the footprint we have, the people we have and the portfolio we have, and now a strategy vision, purpose, we have a great opportunity to grow and deliver consistency to our people, our clients, our customers and our shareholders.”

S&P Global Ratings says an ongoing focus on managed growth and underwriting discipline has returned QBE's full-year earnings to a solid profit.

“Any pressure from Covid-19 on the business appears to be well contained, with lower-than-expected economic effects on its lender's mortgage insurance and trade credit business lines,” S&P says. “Some potential for business interruption claims remains, especially in Australia, and for further adverse reserve development in the US from prior year claims and inflation pressures.”

Climate activists Market Forces criticised QBE, which supports the Paris Agreement and the net zero by 2050 target, for nevertheless allowing “unrestricted underwriting of new oil and gas production until at least 2030, with the exception of tar sands and some Arctic oil”.

The company will again face a shareholder resolution calling on it to align its business with the climate goals of the Paris Agreement Market Forces and investment firm Australian Ethical say.

“The climate crisis is too urgent to wait for 2030 before winding down fossil fuels,” Australian Ethical Head of Ethics Research Stuart Palmer said. "QBE has fallen behind peers in the insurance industry in taking action, despite the growing financial impacts of climate change on the industry.”