European division also delivers ‘stable’ results despite challenging conditions
Australian insurer QBE bounced back in 2014, reporting an after-tax profit of $742m (£480m), compared with a loss of $254m in 2013.
But the insurer missed its insurance profit margin target of 8%-9%, reporting 7.6% in its full year results to 31 December 2014.
Overall, the group maintained underwriting profitability with a combined operating ratio (COR) of 96.1%.
However, gross written premium (GWP) at the insurer fell 9% to $16.33bn from $17.98bn after it was hit by lower rates and fluctuating foreign exchange movements.
QBE said it expected premiums to remain broadly flat this year on a constant currency basis but decline as the dollar strengthened.
In Europe, the group delivered a stable COR of 93.8%, despite “challenging market conditions and increasing competition”.
Group chief executive John Neal (pictured) said: “The resultant disposal of interests in central and eastern Europe and of our European aviation book, coupled with remediation activities elsewhere in the division, resulted in a 14% decrease in GWP but an improved profit margin of 9.7%, up from 9% last year.
The overall COR improved from 97.8% to 96.1% with the underwriting profit improving from $341m to $547m.
Neal added: “I am encouraged by the huge progress we have made during 2014. Our business is more streamlined, more focused and in far better shape to compete strongly in increasingly competitive conditions. While there are remediation activities still underway, our transformation is largely complete and we are well placed to deliver further improvement in performance and efficiency and meet our published targets in 2015. I believe we are now in a position to look to the future with confidence and optimism.”
The insurer also announced its $250m cost saving plan was on track and that it was considering “further expense initiatives”.
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