QBE reports profits up a third for first half of 2004

Insurer QBE announced profits of AUS$320m for the six months ending 30 June 2004, up 33% on the AUS$241m reported for the first half of 2003.

Pretax insurance profit for the first half of the year went up 58% from AUS$259m to AUS$409m, insurance profit net of premiums at 13.1% compared with 8.4%.

Gross written premiums for the first half of the year fell slightly to AUS$4.7bn, down from the AUS$4.8bn reported for the previous year.

But the insurer said the impact of exchange rates on the Australian dollar had had a strong impact on the results.

QBE increased the interim dividend per share by 20% to 24 cents per share.

It said it had upgraded its insurance profit expectations for the remainder of 2004 and 2005 from the previously announced range of 10-11%, up to 12-13%, net of earned premium.

QBE chief executive officer Frank O'Halloran said: “We are very pleased with the significant improvement in insurance profitability.

“Premium growth was generally in line with expectations in local currencies; however, as over 75% of our premium is derived from overseas operations, growth was adversely affected when converted into the stronger Australian dollar compared with the same period last year.”

He added: “The small overall increase in premium rates for our 30 June 2004 renewals and the strength of our insurance liabilities give us confidence that, subject to the usual caveats, we can maintain a strong level of insurance profitability through the second half of 2004 and 2005.

“We are also confident that the Group target of $9.2bn of gross written premium and $6.8bn of net earned premium can be achieved for 2004 given recent acquisitions and the fall in the Australian dollar in the past three months.”