The question of how the coronavirus (COVID-19) pandemic will financially impact the insurance industry will start to become clearer as companies within the sector reveal their Q1 trading statements. Accompanying the release of global insurer Beazley Plc’s trading statement for the three months ended March 31, 2020, a statement from CEO, Andrew Horton, highlighted the unprecedented nature of the events seen in the first quarter and noted that the impact of this pandemic is still being assessed.
For Q1, gross premiums written by Beazley increased by 13% from US$743 million (around SG$1.06 billion) in 2019 to US$840 million (around SG$1.19 billion) in 2020 while premium rates on renewal business increased by 8%. From January 2020, Beazley’s market facilities business was split out of specialty lines to form a new division which saw premiums increase by US$17 million (around SG$24.26 million).
Meanwhile, three of Beazley’s divisions - cyber and executive, marine and specialty lines, each saw strong growth of 23% with both the marine and specialty lines divisions showing good performances from both US and non-US platforms, while the growth in the cyber and executive risk division was credited to the drive of the executive risk team.
The catastrophe exposed divisions of Beazley - property and reinsurance, both saw premium decreases of 11% and 15% respectively in Q1 of 2020. The property division also saw a premium decrease of 11% which was attributed to a particularly strong Q1 2019 but Beazley noted that its full year expectation remains for overall growth in the property portfolio.
Beazley announced an early estimate of losses resulting from COVID-19 of US$170 million (around SG$242.6 million) net of reinsurance and Horton said: “We continue to monitor closely all developments relating to the coronavirus outbreak and our priorities remain the wellbeing of our colleagues and delivering an excellent service to our clients.”
Business is being done and Beazley’s aim is to support its brokers and clients as much as possible in these challenging times, the company stated, noting that the global pandemic and expected subsequent recession has led the business to review all the classes of business it underwrites and that some will be affected more than others.
“We have been communicating with our brokers any changes to our risk appetite based on our expectations for the future,” a release from Beazley stated. “There are different opportunities and potential threats emerging as we continue to underwrite in 2020, and at this stage it is difficult to determine the overall impact of these on the growth of our well-balanced book.”