QBE has reported first-quarter gross written premium increases in line with expectations and catastrophe costs including Middle East impacts well within allowance.

GWP grew 11% compared with a year earlier, or 7% on a constant currency basis, with group rate gains about 2%.

“Our underwriting performance has been excellent, notwithstanding the growing geopolitical instability across the world,” Group CEO Andrew Horton told the annual general meeting today.

In the four months to April, net catastrophe claim costs reached about $US300 million ($414 million), tracking below the first-half allowance of $US517 million ($714 million).

Mr Horton said the total includes $US60 million ($83 million) related to the Middle East, with direct underwriting impacts not material.

“Exposure to conflict in the region is generally limited, and our teams will remain closely connected and seek to mitigate risks as the situation continues to develop,” he said.

Related article: ‘Iran war pushing up insurer costs, ICA warns

QBE says market conditions remain broadly supportive. Competitive pressures are still most notable in commercial property and Lloyd’s, and excluding those segments rates gained about 4%.

The company affirmed full-year guidance for constant-currency “mid single digit” GWP growth and a combined operating ratio of about 92.5%.

Mr Horton said QBE is investing in modernisation, reframing to focus on pace and efficiency, and improving digital, cloud and AI capabilities.

“Investment in AI is pivotal in our industry. We are building close partnerships with innovative new companies to help us stay ahead of emerging technology, build capability early and be ready for how this technology is changing our industry,” he said.

The insurer faced questions over climate change at the meeting, with shareholder Australian Ethical asking if QBE considered its social licence when exiting some catastrophe-exposed property business while “underwriting new and expansionary oil and gas without any restriction of substance”.

Chairman Mike Wilkins said QBE continues to support the energy transition and portfolio changes reflected various issues.

“In a number of those situations, climate was not a significant consideration,” he said. “It was more about our capacity to compete, the scale that we needed to have, and the outlook that we saw for the growth of those markets.”

Mr Wilkins, who hands over to Yasmin Allen after six years as chairman, said Mr Horton’s recruitment has been a highlight of his tenure and he is “proudest of the cultural development QBE has shown”, while “if there was a regret, it would only be not moving quicker”.