Pandemic a testing time for Beazley
Beazley posted a $50m loss this morning following an increased number of claims due to the global pandemic, in particular payouts related to postponed of cancelled events.
The insurance company’s announcement comes a year after making a profit of $267.7m.
Beazley fell to a loss despite solid investment income of $188m and a 19% increase in new premiums written to $3.5bn.
Insurance claims for cancelled events, including music festivals and conferences, piled up due to the spread of coronavirus throughout 2020.
Chairman of Beazley, David Roberts, outlined the scale of the pandemic’s impact on wider society and the insurance industry.
“The spread of COVID-19 has triggered a deep global recession and widened existing wealth and health divisions, having a more extensive effect on society than one could have imagined.
It has tested the insurance industry and our role in protecting society against risk and unforeseen events,” Roberts said.
Despite the loss Beazley’s share price jumped up by 27p at Friday’s market opening, over 13%, to 363p per share.
Chief executive Andrew Horton reflected on Beazley’s performance and prospects for the coming year, as well its ability to resume shareholder payouts.
“Beazley’s gross premiums written increased by 19% to $3,563.8m, supported by rate rises across most of our divisions. We also achieved a strong investment income in the face of volatile conditions.
I am very positive about the year ahead. We have the capital strength to support our growth plans and look forward to a continued favourable rate environment and expansion of our specialist products globally. I am confident we can return to paying dividends during the course of 2021,” Horton said.
Given the company’s financial predicament and uncertainty over the future surrounding Covid-19, the Beazley board decided not to payout to shareholders at the end of 2020.
Beazley’s last dividend payment of 8.2p per share came in March 2020.