UPDATE 2.30pm Australians could soon begin to see a welcome end to steep price rises on their insurance policies.
Global insurer QBE says premiums should begin stabilising following rises imposed after several natural disasters, including the 2011 Queensland floods.
But while premiums are likely to cool Down Under, QBE expects to see prices rising at its businesses in North America and Europe.
So far in 2012, QBE has seen premium rates across its businesses increase on average by more than 5 per cent.
Newly-appointed chief executive John Neal said property insurance premiums had risen by an average of 8.2 per cent in Australia after the floods, with property liability rates up by between three and five per cent.
Mr Neal said it was unrealistic to expect premiums in Australia to keep rising at around eight per cent.
However in the US, where QBE generates most of its income, the trend of solid premium rises in the past five quarters was expected to continue following three years of stability.
European premiums were up by just one-to-two per cent, but should also move higher.
“I think the rates will continue to move but they will change in terms of the geographic dynamics,” Mr Neal told reporters on Friday as he unveiled QBE’s first half results.
“The US will carry on, I’d expect to get some traction round rates in Europe and I think you might see rates just stabilise here in Australia.”
Higher premiums helped boost QBE’s net profit for the half year to June 30 by 13 per cent to $US760 million ($A726.33 million) from $US673 million ($A642.70 million) a year ago.
A dramatic fall in claims relating to natural catastrophes from $US1.1 billion ($A1.05 billion) to $US592 million ($A565.34 million) also helped.
However QBE’s shares took a pounding after it trimmed its forecast for its insurance margin, a key indicator of profitability, for calendar 2012.
QBE had expected to achieve a margin of more than 13 per cent but now expects it to be more than 12 per cent.
Mr Neal, who took over the top job from industry veteran Frank O’Halloran, said the change was partly driven by QBE taking a conservative approach in 2012 and being prudent about provisions for catastrophe losses and premium rises.
“We would hope there’s some upside in terms of those metrics but, you know, if you’ve been around in the insurance game for 25 years things do go wrong occasionally,” he said.
Meanwhile, Mr Neal said changes made to its commercial and specialist insurance business in the US were paying off.
However it was expecting farmers to lodge significant insurance claims as they struggled with the worst drought to hit the US since 1956.
QBE declared a partly franked interim dividend of 40 Australian cents, down from 62 cents.
Its shares closed 61 cents lower at $13.05.