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Beazley warns of $120 million hit from Hurricane Ian, but insurer premiums rise 22% as cyberweapons increase
- Gross written premiums rose 22% in the third quarter to $3.98 billion (£3.40 billion)
- Cyber risk division sees particularly strong growth, premiums increased by 51%
- Investments fell 1.2% as interest rate hikes hit the fixed income portfolio
Lloyd’s of London insurer Beazley has warned of a $120 million (£102.4 million) hit from Hurricane Ian, but revealed strong growth for the third quarter.
The FTSE 250 company, which specializes in shipping, property, data breaches and life insurance, said gross written premiums rose 22 percent in the quarter to $3.98 billion (£3.40 billion), while all of its divisions continue growing.
The cyber risk arm saw a particularly large increase in premiums – 51 percent higher – although that is a slight moderation from previous quarters.
Claims: Beazley said initial estimated losses to Hurricane Ian were $120 million
Beazley said the frequency of ransomware claims has also continued to decline, thanks to corrective actions it has taken since late 2020.
However, it said initial estimated losses to Hurricane Ian, which caused widespread damage in western Cuba, Florida and South Carolina, were $120 million.
Meanwhile, the insurer’s investments suffered losses as a result of ‘unprecedented’ interest rate hikes that impacted the fixed-income portfolio.
Capital expenditures in the third quarter were down 1.2 percent to $96 million, bringing the year-to-date loss to 3.6 percent, or $289 million.
Risk assets have also become weak as global stock markets have fallen more than 25 percent, the group added.
It told investors it continued to monitor inflation to ensure “adequate pricing,” but for now the impact on claims has been in line with expectations.
It also said it expected its combined ratio – a measure of an insurer’s profitability – to be in the ’80s high.
A level below 100 percent indicates an insurance gain and a lower percentage indicates higher earnings.
Beazley Shares rose 1 percent to 665p in morning trading on Friday. They are up about 62 percent in the past year.
Chief executive Adrian Cox said: “We had a strong underwriting performance during the quarter and all divisions continued to grow.
“As expected, overall rates have fallen, but we are seeing increased demand in many industries, supporting our growth ambitions.
“While mark-to-market losses have occurred as a result of rising returns in our fixed income portfolio, rising returns also mean we expect significant future investment returns.
“We remain confident in our high combined ratio expectation from the 1980s, assuming the claims experience for the remainder of the year is as expected.”