Cat claims will push Beazley COR to “around 100%”
Lloyd’s insurer Beazley is expecting to break even on underwriting in 2017 after the string of natural catastrophe losses that have hit global (re)insurers in the second half of the year.
The insurer said in a third quarter trading update this morning that it expected its combined operating ratio to be “around 100%” for the full 2017 year.
Beazley also revised its catastrophe loss estimate to include the California wildfires, and is now expecting natural catastrophe claims of between $200m and $300m (between £152m and £228m). The company said that, taking the mid-point of the range, it expects the cat claims to result in a $175m hit to profit before tax.
The insurer’s preliminary estimate published at the end of September, which excluded the wildfires, estimated claims of between $175m and $275m and a hit to pre-tax profit of $150m.
Beazley grew gross written premiums by 6% to $1.76bn in the first nine months of 2017 from $1.67bn in the same period last year.
The company experienced rate decreases of 1% across its book – an improvement over 2% seen last year.
Beazley chief executive Andrew Horton said: “The third quarter of 2017 was defined by the high frequency and severity of natural catastrophes.
“Beazley is in the catastrophe insurance business and paying natural catastrophe claims is part of what we do. Our focus is currently on providing the support and resources necessary to help our policyholders recover as quickly as possible.
“These events will naturally affect our full year results but our diverse underwriting portfolio continues to serve us well. We also expect to see rate increases across some lines of business in the coming months.”