Beazley upbeat on 2017 results
Specialist Lloyd’s insurer Beazley has prepared the market for better than expected 2017 financial results.
The board anticipates that Beazley will report a combined ratio of 99 percent for the year ended 31 December 2017. This would, however, be worse than the 89 percent combined ratio reported for 2016. In 2017, the insurance market has been hit by higher than usual losses from natural catastrophes. Fitch estimates insured losses to reach around $130 billion in 2017. In September, Beazley said that it expected the aggregate net cost of the Atlantic hurricanes Harvey, Irma and Maria and the series of earthquakes in Mexico to cost the company between $175 million and $275 million.
For 2017, Beazley expects to report an investment return of 2.9 percent on average invested assets of $4.8 billion. This would be ahead of the 2.0 percent investment return reported for 2016.
Furthermore, Beazley expects a reduction of approximately $5 million in the value of its US deferred tax asset following the reduction in the US corporation tax rate from 35 percent to 21 percent.
As a result of the above, Beazley anticipates pre-tax profits for the year ended Dec. 31, 2017 that will be ahead of current market expectations.
In the first half of 2017 Beazley had reported a combined ratio of 90 percent and a profit before income tax of $158.7 million, up 6 percent year on year.