Net profit slipped to $1.28bn (£787m) from $1.53bn in 2009, despite premium income growth of 21 per cent to $13.6bn from $11.2bn in 2009, following floods that devastated Australia as well as Chilean and New Zealand earthquakes.
QBE said its exposure to the earthquake that hit Christchurch last week could be as high as $175m including reinsurance costs – far higher than Australian insurers IAG and Suncorp, which have said losses should be capped at $40-45m due to reinsurance.
However, its underwriting profit – profit after claims and expenses – rose 19 per cent to $1.17bn and all divisions delivered return on equity of higher than 15 per cent. And chief executive Frank O’Halloran said both profitability and premium income should improve in 2011, with net earned premiums expected to grow by 22-25 per cent.
O’Halloran added that the disasters to hit Australia and New Zealand in recent months are likely to cause premium rises as local insurers find buying reinsurance for their coverage becomes more difficult.