Beazley braces for $170m hit from COVID-19 insurance claims

Specialist insurer Beazley is expecting losses resulting from the COVID-19 pandemic of $170 million net of reinsurance, with nearly $100 million across the marine, property and reinsurance divisions, mostly related to business interruption claims.

The company's gross premiums written for the first quarter of 2020 increased by 13 percent year-on-year to $840 million, while premium rates on renewal business increased by 8 percent. The year to date investment loss was $55 million, compared with investment gain of $98 million in Q1 2019.

Beazley expects nearly $170 million net of reinsurance losses from insurance claims resulting from the COVID-19 pandemic. This includes around $70m net of reinsurance across the political, accident and contingency division, which includes event cancellation, and remaining $100m across marine, property and reinsurance divisions. The company said its property team witnessed a number of claims, mostly related to business interruption and mostly from US domiciled companies.

During the quarter, the Lloyd's insurer reduced its exposure to a number of capital growth assets, and temporarily lengthened the duration of its fixed income investments in order to reduce the impact of the market volatility.

"It is too early to say what the quantum of claims within our liability classes will be as these will emerge as the impact of the pandemic is fully realised over the next one to two years," the company said. "We have taken a number of underwriting actions, including the changes to our risk appetite approach, which should reduce this impact."

"The global pandemic and expected subsequent recession has led us to review all the classes of business we underwrite. Some will be affected more than others," it added.

Andrew Horton, chief executive officer of Beazley, said: "The events seen in the first quarter of 2020 have been unprecedented. Covid-19 has touched every corner of the globe and the impact of this pandemic is still being assessed. In mid-March we successfully moved to remote working arrangements for all our employees and from an operational perspective there has been no material disruption to our business. 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."

Meanwhile, the company has revealed certain executive leadership changes. Bethany Greenwood has been appointed as our new head of cyber and executive risk.

Greenwood will be taking over from Mike Donovan and will join the executive committee. She joined as head of executive risk in September 2019.