Beazley doubles COVID-19 loss estimate on contingency claims

Specialist Lloyd's re/insurer  Beazley has increased its total estimate for first party  COVID-19 claims to $340 million net of reinsurance from $170 million, with almost all of the increase caused by further event cancellation losses.

Earlier in April, the company revealed its estimated cost of COVID-19 claims for first party business including contingency, accident and health, marine, property and reinsurance to be around $170 million net of reinsurance.

Beazley said the earlier figure was determined assuming normalisation in the levels of contingency claims in September, which is no longer expected given the evolving status of the pandemic.

"As our book of business is heavily weighted to the US and UK, with the largest segment being conferences, our clients are still largely unable to operate as restrictions on holding events persist," the company said in its trading update. "Conferences that were postponed earlier in the year are now being cancelled as are ones due to take place in the final quarter of this year which means our loss estimates have increased.

"In addition, we anticipate further claims based on our exposure for events in 2021."

The insurer said that the revised figure assumes a resumption to some form of normality in the second half of 2021. "Were this not to be the case, we estimate that we would have another $50m of further claims net of reinsurance," it added.

Beazley noted that it does expect the outcome of the recent FCA judgement on business interruption wording to have a material impact on the group.