SYDNEY, Aug. 18--MediaNet International-AsiaNet/InfoQuest MARKET ANNOUNCEMENT QBE Insurance Group today announced a record operating profit after tax of $320 million for the half year to 30 June 2004, up 33% on the same period last year. Profit for the half year includes realised and unrealised losses on investments from flat equity markets and rising interest rates of $47 million after tax compared with gains of $5 million after tax for the same period last year. Insurance profit before tax for the half year increased 58% to $409 million. Insurance profit to net earned premium was 13.1% compared with 8.4%. All of QBE’s operating divisions produced improved underwriting profits and insurance margins. Cash flow from operations increased 24% to $898 million. Gross earned premium increased 3% to $3,982 million. The impact on growth of the stronger Australian dollar when compared with the same period last year was significant. Using consistent rates of exchange, gross earned premium was up 12%. In recognition of the strong operating performance, the directors have declared a 20% increase in the interim dividend to 24.0 cents per share, 50% franked. Books close for the interim dividend on 30 August 2004 and the dividend reinvestment programmes continue at a discount rate of 2.5%. QBE also announced that it had upgraded its insurance profit expectations for the remainder of 2004 and 2005 from the previously announced range of 10%-11% to 12%-13% of net earned premium. QBE’s Chief Executive Officer, Mr Frank O’Halloran, said “We are very pleased with the significant improvement in insurance profitability. Premium growth was generally in line with expectations in local currencies; however, as over 75% of our premium is derived from overseas operations, growth was adversely affected when converted into the stronger Australian dollar compared with the same period last year.” He added, “The small overall increase in premium rates for our 30 June 2004 renewals and the strength of our insurance liabilities give us confidence that, subject to the usual caveats, we can maintain a strong level of insurance profitability through the second half of 2004 and 2005. We are also confident that the Group target of $9.2 billion ofgross written premium and $6.8 billion of net earned premium can be achieved for2004 given recent acquisitions and the fall in the Australian dollar in the past three months.” More information: http://www.qbe.com/group/reports.html SOURCE: QBE Insurance --Distributed by AsiaNet (www.asianetnews.net)----InfoQuest (SP)--