QBE Insurance saw profits soar 43% on the previous year in its half-year results.
Profit after tax increased to a record A$491m (£206m) for the half year to 30 June 2005, from A$343m (£144m) in the same period last year.
Pre-tax profit was up 57% to A$675m (£283m).
QBE Insurance (Europe) reported a 16% rise in gross written premium for its general insurance business for the first half of 2005 to A$1,007m (£422m). Combined ratio improved to 89.4% from 93.8% in 2004.
The operation writes reinsurance business in Dublin and insurance business in London, Paris, Madrid and Dusseldorf. It also includes the Ensign motor business purchased in April 2004 and transferred from QBE's Lloyd's operation Limit on 1 January 2005.
Limit reported a 17% fall in general insurance gross written premiums to A$729m (£305m) from A$877m (£367m). QBE said the transfer of Ensign had affected growth alongside lower premium rates and increased competition.
The combined operating ratio deteriorated to 96.2% from 90.4%.
The insurer said it was on track to achieve A$80m (£34m) cost savings by the end of 2007 following the restructure of its European operations in 2004.
The company added that the merger of QBE Insurance (Europe) commercial and retail divisions in June 2005 should increase the savings to at least A$90m (£38m).
Frank O'Halloran, QBE's chief executive, said the group was "ahead of all our key profit targets at the half year".