QBE Insurance Group says it is on course to meet profit guidance, expects continued strong returns next year and will begin a share buyback.

Gross written premium growth for the first nine months was 6% – including a drag from North America exits – and group rate increases were about 1.5%, just below the first-half result, according to a quarterly update today.

“As we outlined in August, competition is more pronounced in commercial property and Lloyd’s, which represent about one-fifth of our premium – excluding these segments, rate increases were around 4% ... which is broadly in line with the first half,” CEO Andrew Horton told a briefing.

Natural catastrophe claims are expected to fall below allowance, while the non-catastrophe ratio is likely to be “higher than plan”, including “industry-wide claims activity within accident and health in North America”.

Catastrophe claim costs in the 10 months to October are likely to be about $US700 million ($1.1 billion), compared with an allowance of $US950 million ($1.47 billion). The second half has benefited from a benign hurricane season.

“We have indeed experienced some local cat activity in November, which will take some time to assess, though as it stands we’re likely to be comfortably below our full-year catastrophe allowance again in 2025,” Mr Horton said.

The full-year result will include a “modest prior-year” reserve release, and the return on equity for the year is anticipated to continue “in the high teens”.

The insurer has previously forecast constant currency GWP growth this year in the mid single digits and a group combined operating ratio of about 92.5%. Today it says it expects the ratio to remain at that level next year.

“Profitability remains attractive across the majority of lines and the year ahead appears constructive for further growth, and a continuation of strong returns,” the update says.

Mr Horton says the market will respond to greater accident and health losses with likely rate increases of 20% at January renewals, when most business is written.

The company expects to renew its reinsurance with a similar overall program to this year’s, and Mr Horton says the market view is that rates “are going to come off by 10-plus for cat-exposed property” in January. 

A $450 million on-market buyback funded by surplus capital is expected to start next month and conclude over next year.

QBE will provide an outlook for GWP growth at its February 20 full-year results announcement.