By Alice Uribe

SYDNEY--QBE Insurance Group Ltd. suspended its dividend and didn't issue guidance after confirming an annual net loss driven by significant reduction in investment income, impairment of goodwill and deferred tax assets in North America.

The general insurer reported a statutory net loss of US$1.5 billion for the 12 months through December, compared to a US$550 million profit a year earlier.

QBE, which issued an estimate of its headline fiscal 2020 results in December, also reported a US$863 million adjusted cash loss for fiscal 2020, down on a profit of US$733 million the year before.

"While obviously very disappointed with the headline loss, premium momentum accelerated across 2020 and has continued into 2021," said Interim Chief Executive Richard Pryce. "Coupled with the improved positioning of the underlying business, we enter this year with confidence and optimism."

QBE separated from its Group CEO Pat Regan on September 1, which analysts say has led to a period of uncertainty around future strategy. Mr. Pryce assumed the role of interim CEO in October while QBE searches for a permanent replacement.

Directors of the company said they expect to resume dividend payments of up to 65% of adjusted cash profits at the time of the 2021 interim result.

Net investment income was US$226 million down from US$1.0 billion last year, which QBE said reflected falling bond yields and narrowing credit spreads largely offset by negative returns on growth assets.

Catastrophe claims for the year were US$688 million or 5.8% of net earned premium, up from US$426 million last year, and was US$134 million above QBE's allowance amid bushfires and hail in Australia, as well as U.S. wildfires and Atlantic hurricanes.

QBE's combined operating ratio was 104.2%, compared to 97.5% in the prior year, reflecting pandemic impacts, adverse prior accident year claims development and elevated catastrophe claims. Its combined operating ratio, excluding US$655 million of Covid-19 impacts was 98.6%.

The company said last year that it was targeting a combined operating ratio of 93.5%-95.5% in fiscal 2020.

Still, QBE's gross written premium grew by 10% to $14.6 billion which in part reflected improved premium retention across all divisions.

QBE's three-year operational efficiency program targeting a US$130 million net reduction in costs and an expense ratio of "less than 14%" by the end of 2021 has progressed ahead of plan, said the company.

"We have commenced the next phase of our operational efficiency program focused on IT modernisation and are targeting an expense ratio of 13% by 2023. To support the program, we will incur a restructuring charge of US$150 million to be expensed over three years," said QBE.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

02-18-21 1704ET