Beazley hit by $170m of Covid-19 claims in first quarter

Beazley revealed $170m (£138m) of Covid-19 claims for the first quarter as the Lloyd's of London insurer said it was reassessing risk and taking steps to strengthen its capital during the crisis.

The FTSE 250 company reported gross written premiums up 13% to $840m in the three months to the end of March, boosted by 23% increases in cyber and executive risk and specialty lines. Beazley recorded an investment loss of $55m, or 1%, for the period.

Claims for political, accident and contingency losses related to Covid-19, including event cancellation, were about $70m net of reinsurance, Beazley said. The number of claims increased during the period but has eased off since the end of March, it said.

In the marine, property and reinsurance divisions, Covid-19 claims were about $100m net of reinsurance. Most property claims were for business interruption from US-domiciled companies.

Beazley said it was reassessing risk across its book based on the coronavirus emergency. The company said since early February it had drawn down $140m from a $225m credit facility to support growth and strengthen its capital.

It has also ceded about 10% of its fast-growing specialty lines and executive risk businesses to reinsurers, reducing capital requirements by about $50m.

Beazley said: "Business is being done. The global pandemic and expected subsequent recession has led us to review all the classes of business we underwrite … At this stage it is difficult to determine the overall impact of these on the growth of our well-balanced book.

"It is too early to say what the quantum of claims within our liability classes will be as these will emerge as the impact of the pandemic is fully realised over the next one to two years. We have taken a number of underwriting actions … which should reduce this impact."