Beazley takes $105m hit on recent storms, premiums increase

London-based insurance group Beazley welcomed an increase in gross premiums written and renewal rates as its customers were hit with a series of natural disasters.

Gross premiums written improved 11% to $1.95bn through the first nine months of the year, while premium rates on renewals edged forward 3% year-on-year.

Beazley's speciality lines, its largest division, also grew 11% to $1.02bn, driven by a strong performance in the US, while its political, accident and contingency division recorded a year-on-year premium growth of 5% to $183m.

Following a series of natural catastrophes in the last quarter, the group estimated the initial cost of hurricanes Florence and Michael, as well as typhoons Jebi and Trami, to be somewhere around $105m net of reinsurance and reinstatement plans.

The FTSE 250 resident's property team continued to benefit from "the positive rate change as a result of last year's catastrophe events" that saw premiums increase 21% year-on-year to $340m.

After careful analysis, Beazley, which said it was in the process of working with Lloyd's to ensure a "smooth transition" for its customers in all potential Brexit outcomes, ceased underwriting in its construction and engineering business, noting that it was "unlikely to satisfy" its cross-cycle profitability requirements in the foreseeable future.

Chief executive Andrew Horton, said: "Our business continues to deliver double-digit premium growth and has been aided by higher rates in some classes following last year's catastrophe losses."

"We expect this positive momentum to continue and are aiming to deliver high single-digit growth for the group again in 2019."

As of 0915 GMT, Beazley shares had slipped 0.093% to 534.50p.