Australia-based insurer QBE saw its share price fall by more than 10% today after it announced a likely 40% to 50% fall in profits for 2011 compared with 2010. QBE's net income in 2010 was $1.28bn, itself down from $1.53bn in 2009. QBE shifted to reporting in US dollars in 2010. The insurer cut its insurance margin forecast to between 7% and 7.5%, from a previous estimate of 11% to 14%, itself a cut from the start-of-year target of between 15% and 18%. The final dividend would fall to 25¢ from 66¢, cutting the full-year payment by just under a third to 87¢. QBE said that the record level of catastrophes meant that the allowance for 2011, announced in August 2011, of 13% of net premium is now likely to be about 15%. This is compounded by the fact that net earned premium rose 35% year on year to $15.3bn. Of the $1.2bn increase in large individual risk and catastrophe claims, $500m relates towards catastrophes towards the end of the year. CEO Frank O'Halloran spread the blame for the late-year losses. He included hurricane Irene and other severe weather events in the US – which hit profits on QBE's crop insurance business – bush fires in Western Australia, the storms in Melbourne, floods and riots in Europe, and the extreme floods in Thailand. QBE anticipates a combined operating ratio of about 96.5% for 2011, "which we consider is a strong underwriting result given market conditions". For 2012, QBE is targeting a combined operating ratio of 89% and an underlying insurance profit margin of about 15% – supported by premium rate increases, "comprehensive reinsurance protections" and other changes to the business. However, a Crédit Suisse note observed that "management's optimism remains undimmed with guidance".