QBE posts record half year profits

Profits for QBE's European operations soared by 37% to A$320m (£128.9m) for the first half of the year, as the group reported record profits.

Group operating profit after tax shot up 20% to A$591m (£238m), compared to A$491m (£198m) for the same period last year. Pre-tax profit was up 35% to A$748m (£301m) for the period, while gross written premium rose 10% to A$5,656m (£2,278m).

The European operations, which accounts for 50% of the group's gross earned premium, reported a combined operating ratio of 90.6% in the first six months of the year. This compared to 92.9% for the same period in 2005.

QBE Insurance (Europe) saw its combined operating ratio deteriorate slightly to 90.8%, compared to 90.2% for the same period last year. QBE said this reflected casualty premium rate reductions, two big property risk losses and additional risk margins included in outstanding claims.

Gross written premium was down 3% to A$1,370m (£551.7m), which was blamed on increased competition, lower premium rates and the transfer of reinsurance business to Limit, the group's Lloyd's operation.

Limit reported a 20% growth in GWP. This was attributed to increases in rates for catastrophe exposed property, marine and energy risks, and the transfer of treaty reinsurance business from QBE Insurance Europe.

QBE said growth was restricted by the company's decision to cancel some catastrophe-exposed property and energy risks, including the reduction of exposure to certain types of property risks in the Gulf of Mexico.

Limit's combined ratio was 90.3%, compared to 96.2% for for last year. Insurance profit rose by 48% to A$138m (£55.6m).

Frank O'Halloran, group chief executive, said: "I am extremely pleased to again report a significant increase in profit, solid growth in premium income and improved insurance margins across all divisions."