The chief executive of insurance giant QBE has criticised Opposition Leader Peter Dutton’s threats to break up insurers, claiming forced divestiture would not lower the cost of premiums for Australians.

Unveiling a full-year profit of $2.8 billion, an increase of 30 per cent on the prior year, on Friday, Andrew Horton said the insurance industry was already highly competitive, and Dutton’s threats to force insurers to divest their assets would not make it any more competitive.

“It’s been a combination of things that’s driven the price: it has been the cost of catastrophes, it’s been inflation in terms of repairing houses and the cost of cars going up,” Horton said in an interview.

“So I don’t agree we need to break it up. I think there’s competition in the marketplace … We do really appreciate the cost-of-living issue, and we do want to work with governments and states on how to mitigate the risks because we need to lower the risk of buildings being impacted by catastrophes, and to do that, we need to look at building codes.”

Dutton put “the insurance industry on notice” this week, warning them that if elected at the next federal election due by May, the Coalition “would deal with the industry”.

The opposition leader has issued similar threats to Coles and Woolworths, which he had accused of price gouging.

“We can’t have people who can’t afford to insure against public liability, we can’t have businesses who can’t conduct their tourism operations because they can’t get insurance,” Dutton said earlier this week.

“And we can’t have people going without car insurance because their premiums have gone up by 20 or 30 or 40 per cent, it’s unacceptable.”

Higher insurance premiums have been a key driver of inflation since the COVID-19 pandemic and the eastern floods of 2022, rising as high as 16 per cent in a year around December 2023 – the biggest annual jump since 2000.

Insurance costs rose 1.1 per cent in the December quarter, according to the most recent Australian Bureau of Statistics figures, the weakest quarterly rise since the June 2022 quarter. The sector is dominated by ASX-listed Suncorp, QBE and Insurance Australia Group (IAG).

Horton said the best way to lower premiums was by decreasing the risk. The industry has previously called for local planning laws to be changed to prevent homes being built in high-risk zones.

QBE, which operates across the world, handed down its 2024 full-year results on Friday. Net profit rose to $US1.8 billion ($2.8 billion), driven by premium growth, stronger investment income on shareholders’ funds and a lower tax rate.

It also declared a final divided of 87 cents a share, 20 per cent franked, up from 62 cents in 2023.

The net cost of catastrophic claims fell to $1.7 billion, down from $1.71 billion the prior year, while annual premium rises also slowed, from 9.7 per cent to 5.5 per cent, following lower claims inflation.

Shares in QBE were up 4 per cent at $20.88 in afternoon trading.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.