Lloyd's insurer Beazley reported figures in US dollars for the first time, but even taking into account a resulting one-off foreign exchange gain of $33.7m (£21.7m), adjusted pre-tax profits of $82m were comfortably ahead of Numis Securities forecasts of $59m.
Gross written premiums rose by 5 per cent to $940m, reflecting strong growth in reinsurance and specialty line work. And while there was a 2 per cent decline in premium rates overall, the insurer's combined ratio (of claims to premiums) still improved from 90 per cent to 89 per cent. Beazley has also benefited from a cautious stance on releasing reserves from catastrophe exposed accounts until premiums are substantially earned. This means that underwriting reserves from 2009 of $65.9m were available for release to meet claims arising from the Chilean earthquake.
Inevitably, though, investment income took a knock, providing an annualised return of just 0.5 per cent against 2.9 per cent a year earlier, with a bulk of the portfolio parked in cash and fixed-income securities. Still, as a result of strong underwriting earnings, Numis is upgrading its full-year pre-tax profit estimate by $49m to $263m.
BEAZLEY(BEZ) | ||||
---|---|---|---|---|
ORD PRICE: | 122p | MARKET VALUE: | £644m | |
TOUCH: | 122-123p | 12-MONTH HIGH: | 126p | LOW: 95p |
DIVIDEND YIELD: | 5.8% | PE RATIO: | 5 | |
NET ASSET VALUE: | 128p | COMBINED RATIO: | 89% |
Half-year to 30 Jun | Net premiums ($m) | Pre-tax profit ($m) | Investment income ($m) | Dividend per share (p) |
---|---|---|---|---|
2008 | 512 | 30.1 | 40.5 | 2.3 |
2009 | 625 | 115.5 | 8.5 | 2.4 |
% change | +22 | +285 | -79 | +4 |
Ex-div: 4 Aug Payment: 3 Sep Capacity owned: 81% £1:$1.55 |