Wesfarmers' insurance division enjoyed a 29.1% increase in operating revenue to $799 million for the second half of last year despite an adverse claims environment.

Gross written premiums were up 13% to $618 million, while earnings before interest, tax and amortisation jumped 12.7% to $71 million.

The insurance division is made up of insurers Wesfarmers Federation Insurance, Lumley Australia and NZ and brokers OAMPS and Crombie Lockwood.

The division's underwriting performance suffered due to higher claims and premium competition, with its combined ratio blowing out to 98.1% from 90.5% and insurance margin falling to 5.6% from 13.2%.

While Wesfarmers Federation Insurance performed strongly, buoyed by high grain prices, the diversified group admitted Lumley New Zealand's performance was "below expectations".

OAMPS and Crombie Lockwood contributed revenue of $103 million and earnings of $28 million.

While Wesfarmers issued a strong outlook for its broking operations, it's cautious about the prospects for its underwriting portfolio as pressure on commercial margins from competition and adverse weather is unlikely to ease.

Overall, the group's after-tax profit was up by 53.3% to a record $601 million for the second half of last year, partly due to the acquisition of the Coles Group, which contributed $357 million. Operating revenue was up 108% to $9.8 billion.