Wesfarmers’ insurance division has posted increased profits despite the struggles of its Lumley subsidiary.

Operating revenue for the last financial year is up 13% to $1.6 billion compared to the previous period, while profit before tax is up 10% to $145 million.

MD Richard Goyder says the company’s broking businesses – OAMPS in Australia and Crombie Lockwood in NZ – have performed well, while Wesfarmers Federation Insurance has had another record year, which he says is an “outstanding” performance given current market conditions.

“It’s been pretty tough in insurance and particularly in the underwriting businesses in Lumley Australia and Lumley NZ,” he said.

“Lumley NZ had a disappointing year for us, impacted by some weather events, but nonetheless we’ve affected some change in that business to look for improved performance.”

Included among that change was the departure in March of Lumley NZ CEO Reiny Marck, who has been replaced by John Lyon.

Wesfarmers overall posted a net profit up 33.6% to $1.05 billion, helped along by its acquisition of supermarket giant Coles.

Mr Goyder says despite high claims and falling premium rates affecting the insurance businesses in the past year, the outlook for the division in the coming year is promising.

“There are some signs of some firming of rates in insurance, particularly in commercial and motor which is positive,” he said.

Shares fell $1.65 to close at $32.90 on Thursday.