Dec 18 (Reuters) - QBE Insurance Group (QBE) said on Friday it...

Dec 18 (Reuters) - QBE Insurance Group (QBE) said on Friday it was expecting an annual net cash loss of $780 million due to higher catastrophe-related costs from harsh U.S. wildfire and hurricane seasons as well as additional COVID-19 claims.

The Australian insurer, which posted an adjusted cash profit of $733 million last year, said catastrophe costs were expected to vastly exceed its allowance by 24% to $680 million.

The company also expects a significant drop in investment returns from its North American crop insurance business after wildfires, hurricanes and bad weather battered the continent in the second half, resulting in a $520 million write-down of those assets.

Losses from those events are estimated to push the division's combined operating ratio - a key measure of an insurer's profitability - to around 99% from 90% in the first half.

QBE is also expecting a $1.5 billion statutory loss, mainly due to the write-down of assets in North America and deferred tax.

The insurance industry has come under pressure as pandemic-induced lockdowns led to a spike in claims related to business interruptions.

Last month, a New South Wales Court of Appeal ruled in favour of policyholders seeking business interruption claims, which could force insurers to pay out millions of dollars.

Net incurred COVID-19 costs were set to touch $470 million as a result of additional claims related to trade credit, lenders' mortgage insurance and business interruption, but was expected to remain within the company's earlier provision of $600 million.