Insurer Beazley expressed confidence on outlook after revealing a 25 percent jump in full year pretax profits on the back of a strong underwriting performance and a quiet year for catastrophe related loss claims.
Pretax profits for its year to December 2013 jumped to $313.3m, up from $251.2m a year earlier. Net premiums written by the company – an expert in marine, casualty and property insurance – grew 9% to $1.68bn. Net insurance claims meanwhile fell 8% to $719m.
The full year payout has been increased by 6% to 8.8p. The strong performance and confident outlook is further underlined by the special dividend being hiked by 92% to 16.1p from 8.4p for its 2012 year.
Beazley’s Chief Executive Andrew Horton hailed the company’s ‘exceptional’ underwriting performance in 2013, reflected in the company recording its lowest combined ratio since going public in 2002.
The combined ratio is a measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. A ratio below 100% indicates that the company is making underwriting profit while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.
For 2013, Beazley’s combined ratio came in at 84% – down from 91% in 2012,
Horton added: ”Despite intensifying competition in some areas, we continue to identify attractive growth opportunities across the breadth of our well diversified portfolio. The strength of our underwriting performance gives us the financial flexibility to take advantage of these opportunities while still enhancing returns to shareholders through a special dividend and an increased regular dividend.’
The healthy results and confident outlook helped Beazley shares put on 16.3p or 6% in mid-morning trade to 269.72p, valuing the company at £1.35bn.