QBE Insurance Group Ltd., Australia’s largest insurer by market value, posted a 37 percent fall in first-half net income as premiums fell in North America and it set aside more for unresolved claims.

Net income dropped to $477 million in the six months ended June 30 from $760 million for the year earlier period, the Sydney-based insurer said in a statement today. That missed a $555 million median estimate of seven analysts surveyed by Bloomberg News. [IJ Ed. Note: the figures are in US dollars]

CEO John Neal, who took up his position a year ago, is targeting cost cuts by reducing jobs and simplifying processes at the insurer, which has made 135 acquisitions in the past 30 years to expand to 48 countries. He plans to save at least $250 million annually by 2015 through a restructuring program that the company estimates will cost $156 million this year.

“The key for QBE is proof of recovery in their underlying business across the board after the recent spate of claims losses and provisioning.” Andrew Adams, a Sydney-based analyst at Credit Suisse Group AG said before the announcement.

QBE in February wrote off $407 million for amortization and impairments largely on its U.S. operation pushing it to miss its full-year profit forecast, filings show.

The insurer said today it was disappointed in having to set aside $178 million for prior year claims while gross written premiums from its North American operations dropped 16 percent.

“Plans are underway to rebuild our premium base in the specialist U.S. lender placed insurance business,” Neal said in today’s statement.

North America Reflecting the weakness in North America, QBE cut its gross written premium target for the year to between $17.5 billion and $18 billion from its earlier forecast of $18.5 billion to $19 billion.

QBE’s latest result includes a loss of $24 million on its fixed-income investments in the first-half compared with a gain of $259 million a year earlier when it revalued its bond portfolio.

The insurer expects an insurance profit margin of 11 percent for the full year after a margin of 10.8 percent in the first half, it said.

QBE shares have climbed 56.2 percent this year compared to a 10 percent gain for the benchmark S&P/ASX200 index.