Beazley reports higher revenue, increases cat claims estimateReprints
London-based Beazley P.L.C. on Thursday reported an increase in revenue in the first nine months of 2017 despite lower premium rates.
But the insurer and reinsurer also increased its loss estimate for the second half of 2017 to include claims from the California wildfires in October.
Beazley now expects second-half catastrophe claims of between $200 million and $300 million net of reinsurance, which is expected to reduce its 2017 pretax profit by about $175 million, according to a Beazley statement. Previously, Beazley had estimated that claims from the third-quarter hurricanes and earthquakes would reduce its earnings by $150 million.
The insurer said it expects rates to rise as a result of the catastrophes.
Beazley reported gross premiums written of $1.76 billion for the first nine months of 2017, a 5.8% increase over the same period last year.
The premiums varied significantly by line of business. In specialty lines, Beazley’s largest division, gross premiums written increased 12.3% to $925 million, property premiums written increased 6.8% to $281 million, and marine premiums written increased 11.4% to $205 million.
For its property, accident and contingency division, however, gross premiums written fell 11.2% to $175 million. “The nonrenewal of a large client has reduced premium income from our U.S. admitted gap medical product by $15 million. Our decision to cease writing business in Australia also had a negative impact on premium of approximately $10 million during the period,” the statement said.
Reinsurance gross premiums written fell 11.1% to $176 million as Beazley reduced its writings in the face of declining rates, the statement said.
Overall rates decreased 1% in the first nine months but “with the high claim activity in the last three months we expect to benefit from positive rate momentum on catastrophe-exposed business going into the fourth quarter.”