Across the insurance industry, the financial impact of the COVID-19 pandemic is finally becoming clearer as insurance businesses reveal their results for the first half of 2020. The British insurer Beazley today disclosed its results for the period ended June 30, 2020 and posted a pretax loss of $13.8 million (approx. £10.8 million) for this period, compared with a prior-year pretax profit of $166.4 million (approx. £130.8 million).
The business also revealed an annualised return on equity of 1%, down greatly from that of 19% last year, as well as a combined ratio which had increased by 7% since last year to 107%. Net income investment for the insurer is also down to $83.2 million (£65.4 million) from $170.3 million (£133.9 million) in 2019.
However, in brighter news for the business, Beazley is bolstered as it enters the second half of the year by the capital raise of $292.6 million (approx. £247 million) which it received in May. Through this additional capital and rate momentum, Beazley believes that it will be able to maintain low double digital top line growth by the end of 2020.
Discussing these results, Beazley’s CEO Andrew Horton noted that the specialty insurer has achieved strong premium growth of 12% in the first half of the year with three of its seven divisions achieving double digit growth. Rates on renewals continue to increase across the market, he said, with average rate increases of 11% seen across our business as a whole.
“Our investments returned 1.4% for the first six months against the backdrop of a volatile investment market,” Horton noted. “The first half of 2020 was defined by COVID-19 and claims arising from the pandemic have driven the combined ratio to 107%, with Beazley recording a loss before tax of $13.8m. Despite this we expect a combined ratio of around 100% should be achievable for the full year."