Beazley warns of £20m hit from Katrina

Lloyd's insurer Beazley has turned in stronger first-half results than last year, but said profits for the full year could take a £20m hit as a result of Hurricane Katrina.

Beazley said pre-tax profits for the six months to 30 June came in at £35.2m, up from £24.7m during the same period last year, and in line with the group's expectations.

The company said that despite the loss from Katrina, the hurricane would lead to an increase in the cost of
insurance in the months ahead, potentially boosting its revenues.

Beazley said in a statement: "We believe Katrina is a loss of such magnitude that it will have a positive impact on rates and extend the period of good underwriting conditions. We are therefore expecting to revise our business plan for 2006 and beyond."

Premium income net of reinsurance rose 27% on the year to £166.4m. Net insurance claims rose 35% to £94.9m, contributing to a deterioration in the combined ratio to 89% from 84% a year earlier.