Lloyd’s insurer stops writing admitted US property business

Lloyd’s insurer Beazley is targeting a combined operating ratio in the mid-90s for the full year of 2011 despite taking a $154m hit from catastrophes so far in the year.

“The first quarter of 2011 has seen catastrophe losses in Australia, New Zealand and Japan,” said Beazley chief executive Andrew Horton in the company’s first-quarter interim management statement. “As a result of Beazley’s diversified portfolio we nevertheless anticipate achieving a combined ratio for 2011 in the mid ninety percent range, provided we experience no further significant catastrophe events during the remainder of 2011.

The company also announced that it stopped writing US commercial property business on an admitted basis during the first quarter, although it will continue to write the business on a surplus lines (non-admitted) basis. Beazley started writing US admitted commercial property in February 2007. It has been writing the business on a surplus lines basis since 1992.

Beazley added that its surplus lines US commercial property accounted for more than 80% of the business written by its US property division in 2010.

Overall, Beazley cut its gross written premium by 3% to $426m in the first quarter of 2011 from $438m in the same period of 2010.

The biggest cut was in the life, accident and heath line, where gross written premiums fell 29% to $20m as a result of not renewing business from one coverholder.

The only business line where Beazley boosted its writing was specialty, where gross written premiums increased 5% to $162m.

Renewal rates fell by an average of 1% across Beazley’s book, which the company said was in line with expectations. The biggest drop was 4% in life, accident and heath.

Beazley’s Q1 catastrophe loss estimates:

  • Australia flood: $23m
  • New Zealand earthquake: $64m
  • Japan earthquake: $67m
  • Total $154m