Australia's QBE insurance group has reported a net profit of $1.27bn, or $1.19 per diluted share for the year 2010, compared to $1.53bn, or $1.49 per diluted share for the year 2009.

The insurer said the the net profit reflected the lower investment yields on policyholders’ and shareholders’ funds, reduced foreign exchange and other gains and an unusually high number of catastrophic events in the countries where QBE conducts its business.

Underwriting profit was $1.16bn for the year 2010, compared to $981m in 2009.

For the year 2010, gross written premium were $13.62bn, compared to $11.23bn a year ago.

Insurance profit for the year 2010 was $1.70bn, compared to $1.60bn for the year 2009.

QBE said that the insurance profit margin held back by lower investment yields and increased frequency of catastrophe claims.

QBE group CEP Frank O’Halloran said that the group intend to continue with an investment strategy focusing on high quality, liquid cash and fixed interest securities.

"Our equity exposures are not expected to increase beyond 2.5% of the total portfolio due to increased capital charges for equities proposed by rating agencies and regulators.

"Our business plans for 2011 are focused on ensuring that we continue to support our long-standing customers. We will continue to maintain our requirement of a minimum 15% ROE on each product," O’Halloran said.