By Alice Uribe


SYDNEY--QBE Insurance Group Ltd. upgraded its outlook for gross written premium growth at the end of a fiscal first half headlined by a 66% drop in net profit.

QBE reported a net profit of US$151 million for the six months through June, down 66% on US$441 million achieved at the corresponding stage of fiscal 2021. It said its revenue lifted 26% to US$11.54 billion, while its adjusted cash profit after tax reduced to US$169 million from US$463 million the year before.

"Our outlook for the remainder of the year remains positive," said Chief Executive Andrew Horton. "We expect constant currency gross written premium growth of around 10%, an improvement from our previous expectation for growth in the high single digits."

The insurer said its half-year result partly reflected adverse mark-to-market impacts on its investment portfolio and the Australian pricing promise review. Total investment loss for the first half was US$840 million, compared with US$58 million a year ago, which QBE attributed to unrealized losses associated with the significant increase in bond yields.

Still, QBE's underwriting performance was resilient in the first half, despite higher inflation, geopolitical tensions and record storm and flood events in Australia.

The insurer's adjusted combined operating ratio--a measure of underwriting profitability comparing premiums with losses and expenses--was 92.9%, an improvement of 0.4% compared to the prior period and reflected rate increases, gross written premium growth and lower catastrophe costs. On a statutory basis, combined operating ratio was 94.1% compared to 93.3% a year ago.

Among other key metrics, QBE's net earned premium rose by 8% to US$6.79 billion in its fiscal first half, while its gross written premium rose by 17% to US$11.55 billion.

Directors of the company declared an interim dividend of 9 Australian cents (7.1 U.S. cents a share), compared to 11 Australian cents last year.

QBE said that group-wide premium rate increases averaged 8.1% during the half compared with 9.7% a year earlier, with strong rate increases achieved across each division.

In North America, the average renewal premium rate increase was 10.4%, while international was 7.0% and Australia Pacific was up 9.1%.

Mr. Horton said QBE's guidance for its combined operating ratio was unchanged, anticipating an improvement on the fiscal 2021 exit combined ratio of around 94%.


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


(END) Dow Jones Newswires

08-10-22 1830ET