QBE has raised its full-year gross written premium (GWP) guidance after strong first-quarter pricing, but the outlook for the combined operating ratio has deteriorated due to natural catastrophe impacts.

The insurer now sees GWP growth of around 10% on a constant currency basis, compared to mid-to-high single digits previously, while the FY23 plan combined operating ratio has been revised to around 94.5% from 93.5%.

The company says catastrophe activity has remained elevated into this year, underscored by “two meaningful” New Zealand events. The group also flagged $US130 million ($193 million) of adverse development on events mainly from late last year, including Winter Storm Elliot in North America and certain Australian events.

“The catastrophe events occurring at the end of 2022 and into the first quarter are going to have an adverse impact on QBE in 2023,” Chairman Mike Wilkins told the annual general meeting in Sydney today.

Year-to-April catastrophe costs are tracking around $US480 million ($713 million) compared to a first-half allowance of $US535 million ($795 million). The group has a full-year allowance of $US1.175 billion ($1.745 billion).

The raised GWP guidance follows strong first quarter outcomes, and expectations that rates will remain strong “for the foreseeable future”.

GWP grew 14% in the first quarter and the group-wide renewal rate averaged 10% supported by a re-acceleration across property class and higher increases for QBE Re, the company said.

The insurer says it delivered a solid investment result for the quarter, underpinned by supportive interest rates, existing the period with a fixed income running yield of 4.2%.

CEO Andrew Horton told the annual meeting the group is making pleasing progress against strategic priorities, taking action to reduce volatility, driving greater consistency across classes where it has a global footprint, and modernising its business.

“There is ongoing focus on core platforms and further IT estate simplification, all centred around making QBE an easier partner to deal with and work for, ensuring we fully leverage our global scale,” he said.

QBE defended its oil and gas sector underwriting and net zero commitments following questions from shareholders during the annual meeting, including on whether the company could be accused of greenwashing.

Mr Wilkins said QBE is working with oil and gas and other energy clients as they undertake strategies and commitments in making the transition to a greener future, and has ramped up its own sustainable energy unit as it looks at business opportunities.

“We continue to believe that going cold turkey and eliminating all oil and gas at this stage would be irresponsible of us as an underwriter because our economies need to have that transition capacity,” Mr Wilkins said. “We believe we are on that path to a net zero underwritten portfolio by 2050.”