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UPDATE 2-Insurer Beazley's shares surge as upbeat outlook trumps annual loss

· 02/05/2021 02:37
UPDATE 2-Insurer Beazley's shares surge as upbeat outlook trumps annual loss

Shares jump 12% on positive outlook

Co reports loss due to virus-related claims

Beazley reviewing realistic disaster scenarios

Expects to return to profit during this year

Adds CEO comments from call, share move, analyst comments

By Muvija M

- Insurer Beazley BEZG.L swung to a loss in 2020 after being hit by pandemic-related claims for cancelled events, but said it expects to return to profit and bring back its dividend during the course of this year.

The outlook sent shares in the insurer surging 12% to the top of the UK's midcap index .FTMC by 0811 GMT, with JP Morgan analysts saying it showcased confidence on underwriting trends.

Beazley, which provides cover for events ranging from major conferences, music tours and sports tournaments to village fetes, weddings and birthday parties, has been hammered by a wave of cancellations and postponements due to the global health crisis.

The company reported a pretax loss of $50.4 million for the 12 months ended Dec. 31 versus a profit of $267.7 million a year earlier, with total first-party losses related to the virus reaching $340 million. Eikon data from Refinitiv showed analysts were expecting a loss of $67 million.

Beazley, which manages six Lloyd's syndicates, has operations in Europe, North America, Latin America and Asia.

Chief Executive Andrew Horton told Reuters that event cancellations for the next six months were already accounted for in the current estimate.

Across the world, insurers have been wrangling over policy wordings with their clients as the pandemic created unparalleled claims' requests from business shutdowns to event cancellations.

"Despite the volume of information, data and predictive analytics at our fingertips, we didn't foresee the events of this year... the unprecedented challenge has taught us valuable lessons, from how we operate to the need to review the stress testing of our realistic disaster scenarios," Horton said.

Beazley said a review of those scenarios was underway, looking at their "ongoing efficacy and ability to respond to new information or to an event that escalates beyond the initial assumptions built into the stress test."

Still, Horton has said 2021 could be one of the company's strongest in over a decade as the industry has absorbed the bulk of its pandemic-linked losses. nL8N2IA4LV

The company's shares shed 34% in 2020 in their worst annual loss since their listing in 2002.

Beazley's combined ratio came in at 109%, slightly lower than the 110% it guided to in November and above the 100% reported a year earlier. A level below 100% indicates an underwriting profit. nL4N2HS26X

The company guided to a low-90s combined ratio for 2021 assuming average claims experience.


(Reporting by Muvija M in Bengaluru; Editing by Devika Syamnath, Rachel Armstrong and Susan Fenton)

((Muvija.M@thomsonreuters.com; within UK: +44 20 7542 1810, outside UK: +91 80 61822698; Twitter: https://twitter.com/muvija_m;))