QBE’s first-half profit jumped 27% to $US1.02 billion ($1.57 billion), supported by increased revenue amid a slowing property market, and with catastrophe losses well within allowance.

Gross written premium increased 6% to $US13.82 billion ($21.21 billion), or 8% excluding exited portfolios, and the combined operating ratio improved to 92.8% from 93.8%.

Group CEO Andrew Horton says the company is on track for a strong year and is benefiting from its spread of operations across North America, international and Australia Pacific divisions, and past actions to improve earnings.

“Ultimately, insurance is all about diversification, and QBE is a fantastically diverse business,” he told a results briefing. “With our portfolio now in better balance, we have confidence in sustaining more consistent performance.”

Premium rates increased 2.1% for the half, slowing from 3.4% in the first quarter to 0.8% in the second.

Mr Horton said moderation was most noticeable in certain commercial property and Lloyd’s portfolios, while the remainder of the business was more stable, with rate rises of about 4.5%.

The Australia Pacific combined operating ratio improved to 86.8% from 95.6% as catastrophe losses fell. GWP eased 1% to $US2.58 billion ($4 billion) amid rising competition, but the company says rate adequacy remains excellent across most of the portfolio.

Mr Horton told insuranceNEWS.com.au reinsurance is a key factor preventing undisciplined pricing in the property market.

“I can’t see that’s necessarily going to happen at this point. The reinsurers have been relatively sensible, which is always important,” he said. “If you can’t hedge out your accumulated exposure that cheaply, then you can’t afford to underprice the business.”

QBE is also monitoring inflation effects from global tariff wars.

“We have to keep an eye on determining whether it impacts inflation going forward, and therefore the knock-on impact of whether claims are going to settle higher than we originally thought, and if we believe that, then adjusting the pricing to take that into account,” he said.

“Some of these tariffs are truly going to be inflationary; some are going to be absorbed through productivity gains.

“It’s going to be a combination of factors, so we just have to wait to see.”

Group catastrophe costs fell to $US479 million ($735 million) from $US527 million ($809 million) a year earlier and compared to the $US549 million ($843 million) allowance, amid an active half for the global industry, given US wildfires and storms.

Mr Horton says QBE in recent years has achieved a better balance around property exposures.

“We're proving that the work we've done on portfolio optimization is working when we have these catastrophic losses,” he said.

QBE’s investment income was broadly stable at $US788 million ($1.21 billion), delivering a return of 2.4%.

The company affirmed full-year targets for constant current GWP growth around the mid-single digits and a combined ratio of around 92.5%.