But liability losses still remain uncalculated
Beazley has revealed that it has calculated the impact of the coronavirus pandemic to be $170m (£135.5m) in additional claims over the course of the first quarter of 2019, with the majority of this coming in its marine, property and reinsurance divisions.
The insurer has carried out a review of each area of its underwriting portfolio, and assessed the increase in claims as a result of the outbreak to equal $100m for its marine, property and reinsurance divisions, with the remaining $70m affecting its political, accident and contingency division, which includes event cancellation, personal accident and accident and health.
The insurer did say, however, that it was “too early” to tell what the impact would be on its liability classes of business, with those claims expected to be realised over the next one to two years.
Chief executive Andrew Horton said that while the insurance industry had not experienced the likes of the pandemic before, it had not stopped the insurer from being able to carry out its business.
“The events seen in the first quarter of 2020 have been unprecedented,” he said. “Covid-19 has touched every corner of the globe and the impact of this pandemic is still being assessed.
“In mid-March we successfully moved to remote working arrangements for all our employees and from an operational perspective there has been no material disruption to our business. We continue to monitor closely all developments relating to the coronavirus outbreak and our priorities remain the wellbeing of our colleagues and delivering an excellent service to our clients.”
The impact of coronavirus has also impacted Beazley’s investment returns, with the insurer falling to an investment loss of $55m over the first three months of 2019, compared to a gain of $98m for the same period in 2018.
In response to the increased market volatility being experienced as a result of the pandemic, the insurer has reduced its exposure to “a number of capital growth assets, and temporarily lengthened the duration of our fixed income investments in order to reduce the impact of the market volatility”.
Despite the negative impact of coronavirus on the insurer’s performance over the first quarter of 2019, Beazley was still able to grow its gross written premium (GWP) by 13% to $840m, up from $743m for the same period in 2018.
This increase in the size of the insurer’s book was aided by the decision to split the market facilities business of specialty lines to create a new division, with the line boasting growth of some 121% at the start of 2019.
Other fast growing business lines include cyber, marine and specialty lines, all of which grew by 23% over that same three month period.
The insurer said that rate increases in the market were “particularly encouraging” with an average rate increase of 8%, and three divisions – cyber (12%), marine (16%) and property (11%) – achieving double digit increases.
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