QBE expects gross written premium (GWP) to fall this year because of the stronger US dollar, according to CEO John Neal.

The insurer reports its financial results in US dollars, and Mr Neal says GWP will be flat on a constant currency basis.

“Market conditions remain tough and premium rates are generally low or flat, so we believe it is essential to proactively manage our expense line,” he told the AGM earlier this month.

The group is seeking further cost savings this year and will give more detail on these at the half-year result.

It aims to strengthen its capital position and still plans to float part of its Australian lenders’ mortgage insurance business, although “neither the timing nor activation is critical to meeting our expected capital needs”.

Mr Neal says the first quarter’s results are in line with the budget, and market conditions such as pricing are as expected.

“Our business is more streamlined, more focused and in far better shape to compete strongly in increasingly competitive market conditions.”

Chairman Marty Becker says work last year “created a baseline for future success” and the company is now significantly stronger.

“We have made considerable ground in returning to more predictable and consistent earnings and we are now well positioned for future success.”

Mr Becker says much of the “heavy lifting” is complete.

QBE’s shares jumped the day after Mr Becker said the company may increase its dividend payout and dividends are expected to be fully franked for the next two years.