The insurer said it was issuing new share capital in order “to continue to support ongoing organic growth” and strengthen the balance sheet “in light of the continued uncertainty from Covid-19”

Beazley has raised an additional £247m following the completion of the placing of new ordinary shares in the business.

The insurer’s share price responded well to the news, at one point rising as much as 13% on yesterday’s closing price.

The new shares were sold at 315p per share, equivalent to a discount of 4.9% on Monday’s closing price, and represent approximately 15% of the insurer’s existing issued ordinary share capital.

Beazley said in a statement announcing the placement that the equity raise was “to continue to support ongoing organic growth” after “encouraging” rate increases averaging 8% over the first three months of 2020, and three of the insurer’s division achieving double digit increases.

The insurer added that the new capital would add “further strength to the balance sheet in light of the continued uncertainty from Covid-19”.

As previously announced in its trading update for Q1, Beazley estimates that coronavirus-related claims will amount to $170m and the insurer has also experienced an investment loss of $55m in the three months to 31 March 2020.

At the time of the trading update, Beazley had drawn down a $140m letter of credit from the $225m banking facility it already had in place, and has since agreed an increase in this banking facility to $450m.

The insurer has subsequently drawn down a further $85m letter of credit, leaving $225m of unutilised capacity under the banking facility.

The board also announced it had taken the decision not to pay a first interim dividend for the six months ending 30 June 2020.