Premium rate increases in QBE’s Australian, Americas and Europe divisions are expected to exceed 4% across the board, according to CFO Neil Drabsch.

Presenting the company’s current and future position at a conference in Sydney last week, he said Australian operations are showing average increases of 5% across most portfolios.

The overall Americas rate increase is around 3% with an upward trend, while European operations rates are up 2% “with encouraging increases across motor and catastrophe-exposed property portfolios”.

Mr Drabsch says major claims in the first half of this financial year are running at double the level of the previous year and at more than 10 times the long-term average. For the period 2004 to 2010, the group’s large risk and catastrophe claims average was 8.1% of net earned premium.

Over the past five years QBE has increased gross written premium by 123% “and significantly increased the diversity of its businesses, both by product and geography”.

He says this has enabled QBE to reduce its overall risk profile and leverage reinsurance economies through greater scale.

The group’s investment strategy continues to be based around a cautious approach and a focus on locking in higher spreads and yields on quality credits. Equities will be held up to 2.5% of the total portfolio, a significant rise over the current 0.4%.

Mr Drabsch says the outlook for the rest of the financial year remains unchanged, with a minimum projected insurance profit margin of 11%.

“The underlying insurance margin of 16% is sustainable assuming [there are] normal levels of catastrophe losses, stable risk-free rates and credit spreads.”

He says this view is supported by the group’s confidence in its underlying insurance margin and profitability, substantial excess regulatory capital and “recently affirmed financial strength ratings for our main insurance businesses”.