QBE Insurance Group first half net profit has risen to $US400 million ($611 million) from $US48 million ($73 million) in the year-earlier period as investment returns provided a tailwind while catastrophes hit the underwriting result. 

Gross written premium (GWP) rose 13% to $US12.8 billion ($19.6 billion) supported by group-wide renewal rate increases of 10.2%, but the combined operating ratio deteriorated to 98.8% from 94.9% as catastrophe costs exceeded the first half allowance and the measure was also affected by prior year development. 

“While I am disappointed with the impacts from catastrophe costs this period most other features of the result are all fairly encouraging,” Group CEO Andrew Horton told a results briefing this morning. 

Total investment income for the period was $US662 million ($1 billion) compared to a prior loss of $US20 million ($30.6 million), particularly reflecting the significant increase in interest rates. 

The North America combined operating ratio deteriorated to 106.9% from 95.9% with catastrophes materially above allowance and the prior period, and strengthening required for winter storm Elliott and crop. 

The Australia Pacific combined operating ratio moved to 98.9% from 92.9% following elevated inflation in property and motor and the New Zealand weather catastrophes, while the International division improved to 93.2% from 95.4%. 

Mr Horton says the company has continued to make pleasing progress on each of its six strategic priorities, while the performance in the half highlights there’s more work to be done. 

“Our strategy to improve balance and returns in North America remains the primary focus for the board and management,” he said. “While our core business in North America is now in better balance, we remain focused on portfolio quality, further reducing catastrophe exposure and better managing volatility.” 

The company forecasts constant currency GWP growth for the year of about 10% and maintains its expectation for a combined operating ratio of 94.5%, excluding the upfront cost of a $US1.9 billion reserve transaction. 

QBE also announced today that Peter Burton – currently Executive Director International Markets at QBE European Operations – has been appointed to the role of Group Chief Underwriting Officer.