Wesfarmers Insurance has increased its pre-tax earnings by 12.1% to $65 million for the six months to December 31, with growth in underwriting and broking offsetting claims from natural disasters.

The underwriting result rose 10.5% to $42 million, while insurance broking revenue and earnings rose 12% to $28 million. The company also reported higher investment income.

Wesfarmers Insurance MD Rob Scott says the group is “gaining traction in a number of our key growth initiatives, including Coles personal insurance and Lumley’s my.place and corporate solutions initiatives”.

The business has increased the personal lines it offers through Coles and both WFI and Lumley NZ have added new distribution partners.

The net impact of the Christchurch earthquake was $11 million. Post-December disasters such as the storms in Victoria and Queensland and Cyclone Yasi have resulted in net costs after reinsurance recoveries of $30-$35 million that will be reflected in the full-year results.

The company’s insurance operations increased revenue by 0.5% to $872 million and reported a combined operating ratio of 98.6%, while the broking margin increased from 25.2% to 27.3%.

Lumley Insurance had improved underwriting results, while new business growth “contributed to modest growth in net earned income” – despite the impact of lower premiums following the decision to drop unprofitable business.

Lumley NZ had “a modest improvement” in gross written premium, with a strong improvement in underwriting performance.