QBE says it earned $704 million in 2011 compared to $1.28 billion the prior year. Underwriting profit was down 58 percent to $494 million.

Catastrophe losses dragged down earnings. QBE says it booked $1.73 billion in such losses in 2011 from events such as earthquakes in New Zealand, an earthquake and tsunami in Japan, storms and bushfires in Australia, and tornadoes, hurricanes, wildfires and floods in the U.S.

Additionally, QBE says it was negatively affected by low investment returns and increased credit spreads in its bond portfolio. Net investment income fell $241 million to $776 million in 2011 compared to the year before.

According to a letter from QBE Chairman Belinda Hutchinson, the insurance groups' target of a combined ratio below 90 was missed due to the fact large individual risk and catastrophe claims in 2011 accounted for 15.3 percent of net earned premium of $15.36 billion—an increase of 35 percent from 2010 results.

Hutchinson says QBE has taken action to cut down on catastrophe-exposed business in certain areas while increasing rates and deductibles and buying more reinsurance.

O'Halloran was hailed for QBE's global expansion, increasing premiums to $18 billion from $1.5 billion when he took over.

“This transformation has been achieved while consistently recording underwriting results that place QBE among the very best in our industry with strong returns for shareholders over the period,” Hutchinson says in a statement.

Neal has been with QBE for eight years and has 25 years of insurance-industry experience.