QBE, Australia’s global insurance group, announced a 53 percent increase in the half year net profit after tax of US$673 million. The group noted that this figure was “within the range provided to the market on 14 June 2011.”

QBE also pointed out that it achieved the first half results despite “estimated large individual risk and catastrophe claims, including allowances for claims incurred but not reported, increasing from US$830 million at the end of May to US$1.080 billion at the end of June.

“Claims in the month of June included a number of severe tornadoes in the US, a third major earthquake in Christchurch in late June, deterioration of claims from Cyclone Yasi and a number of large individual risk claims. The results reflect strong growth in premium income, continued excellent underlying underwriting profitability and improved investment yields.”

In addition to the profit figures, the earnings report highlighted the following: • Interim dividend maintained at A$0.62, franked at 10 percent;
• Record catastrophe claims added 6.6 percent to large individual risk and catastrophe claims ratio for the half year;
• Underlying insurance profit margin remains strong, with stable attritional claims ratio;
• Recent acquisitions exceeded expectations;
• Operational cash flow up 61 percent to US$1.121 billion;
• On target for growth of over 30 percent in net earned premium for 2011;
• Additional reinsurance protections purchased to protect second half profitability; and
• Strong capital adequacy.
• Gross written premium was up 30 percent compared with the same period last year to US$8.942 billion;
• Net earned premium was up 29 percent to US$6.778 billion;
• Combined operating ratio of 95.7 percent compared with 89.7 percent due to record catastrophe claims, which were up by US$590 million;
• Insurance profit margin of 11.2 percent compared with 15.8 percent, with the exceptional level of catastrophe claims partly offset by an increase in investment yield;
• Net investment income, including operational foreign exchange gains, up from US$116 million to US$657 million;
• Earnings per share (diluted) up 42 percent to 59.9 US cents; and
• Capital adequacy is 1.7 times the Australian Prudential Regulation Authority’s (“APRA”) minimum capital requirement (“MCR”).

CEO Frank O’Halloran commented: “Our broad geographic and product diversity together with an excellent attritional claims ratio, and our new worldwide reinsurance protections, have ensured that our underlying underwriting profitability around the world remains strong. We continue to outperform the majority of our peers, many of whom have announced combined operating ratios in excess of 100 percent due to the record level of catastrophe claims in the first half.”

The complete report and additional information may be obtained on the group’s web site.

Source: QBE Group