6th Feb 2014 08:41
LONDON (Alliance News) - Specialty Insurer Beazley PLC Thursday reported a 25% increase in pretax profit for its recent financial year, amidst an especially strong underwriting performance and a quiet year for catastrophe losses, allowing it to declare a higher special dividend.
In a statement Beazley, which writes most of its business in the US, said it made a USD313.3 million pretax profit for the year ended December 31, 2013, compared with USD251.2 million for the year prior. Beazley declared a full-year dividend of 8.8 pence, up from the previous year's 8.3 pence, while also increasing its special dividend to 16.1 pence from 8.4 pence.
The specialist insurer, which also has operations in Europe, Asia and Australia and is the manager of five Lloyd's of London syndicates, had previously said it was on track to deliver its lowest combined ratio in years, and duly delivered, reporting a figure of 84% - a full 7 percentage points below 2012. The further below 100% the combined ratio, the higher an insurer's underwriting profit.
With a combined ratio that low, underwriting profitability more than outweighed the insurer's weaker net investment income, which fell by USD39.3 million to USD43.3 million as it was hit by rising bond yields.
"Beazley delivered an exceptional underwriting performance in 2013, reflected in the lowest combined ratio we have recorded since becoming a public company in 2002. It was a quiet year for catastrophe losses, which contributed to the strong reserve releases from short tail classes of business, but the business lines that are not exposed to catastrophes also performed excellently," Andrew Horton, chief executive, said in a statement.
"Despite intensifying competition in some areas, we continue to identify attractive growth opportunities across the breadth of our well diversified portfolio," Horton said, adding that despite a preference for organic growth, Beazley would consider acquisition opportunities on an "exceptional" basis.
Meanwhile, Chairman Dennis Holt said Beazley had overcome the sharp decline in premium rates for war risks, such as piracy, as the notorious attacks off the Horn of Africa have subsided, by increasing its marine liabilities book on the back of rate rises, triggered in part by the sinking of the Costa Concordia cruise ship - the largest loss of its type in history in financial terms.
Of the USD1.97 billion the insurer wrote in gross premiums over the course of 2013, about USD315.9 million was down to the marine division.
While increasing competition in a number of its business lines remains a concern for Holt, he said profitable opportunities for "moderate" premium growth remain over the course of 2014.
Beazley shares were Thursday quoted at 266.30 pence, up 12.90 pence, or 5.1%
By Samuel Agini; [email protected]; @samuelagini
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