UK insurer Beazley lifts outlook after profit nearly doubles
Expects undiscounted combined ratio around 80%
Shares jump 10%
H1 benefited from fewer catastrophe losses - CEO
Crowdstrike outage to impact demand for cyber insurance - CEO
Adds CEO quotes in paragraph 3, 5, 6 and 10, analysts in paragraph 4
By Yadarisa Shabong
Aug 8 (Reuters) -British insurer Beazley BEZG.L upgraded its combined ratio forecast for 2024 on Thursday after first-half pretax profit nearly doubled, boosted by growth in its property risks premiums and fewer catastrophe losses, sending its shares up 10%.
The insurer, which commands about 8% of the global cyber insurance market according to analysts, had soothed investor concerns last month by saying its annual forecasts were unaffected by the CrowdStrike outage.
"Attritional losses were better and there were fewer catastrophe losses than we had budgeted for in the first half of the year," CEO Adrian Cox told Reuters.
JPMorgan analysts said Beazley's updated forecast assumes that both catastrophe losses and attritional claims revert back to 'normal' levels in second half, which suggests that the guidance is being set conservatively.
Shares were up 10% in early trade, making it the top gainer on the London bluechip index .FTSE.
Cox told Reuters he expects the massive IT outage last month to have an impact on demand for cyber insurance particularly outside the United States, where the market is still smaller and the penetration of cyber insurance is lower.
"I think in terms of insurer behaviour there's long been discussion about systemic risk, this is the latest in a number of such sort of single points of failure issues that have happened this year," Cox said.
"I think that needs to be absorbed by the cyber market and I think it could have an impact on pricing," he said, adding that the market got more competitive in the first half and he expects prices to "flatten out a little bit".
Profit before tax was $728.9 million in the six months to June 30, compared with $366.4 million a year ago, Beazley said.
Beazley, which offers insurance for cyber liability, property, marine, reinsurance, accident and life, and political risks, said the undiscounted combined ratio is expected to be around 80%, from a previous forecast of low 80s.
A combined ratio - measuring an insurer's profitability - of above 100 indicates an underwriting loss. A lower figure indicates better profitability.
Reporting by Yadarisa Shabong in Bengaluru; Editing by Savio D'Souza and Janane Venkatraman; editing by Philippa Fletcher
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
