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Insurer Beazley hit by $193mn investment loss as markets sour

Lloyd’s London insurance company Beazley said the sale in the financial market caused by the Ukraine war left it with a $ 193 million loss in investment in the first half, which led to a sharp drop in its pre-tax profits.

The insurance company said the war created a mix of “excess demand and supply constraints [which] “It has affected the financial markets, which has led to an exceptional trading environment.”

This damage was the main reason why pre-tax profits fell by almost 90% to $ 22 million.

Insurers hold large investment portfolios to back up potential payments to clients, so fluctuations in financial markets can have a big impact on their profits.

Beasley also increased its reserves to reflect its expectations of “increased levels and duration of inflation.”

The results, among the first in the insurance companies’ profit season, demonstrated how a mix of inflation and weaker markets hurt underwriters.

But Beasley has managed to post its best combined ratio in the first half – an underwriting index that shows claims and costs as a percentage of premiums – since 2015 at 87%, aided by its cyber insurance portfolio. The company has raised its full-year guidelines to hold on to the high 80s. Analysts at RBC Capital Markets called the earnings numbers a “solid signal.”

Beasley has not changed its estimate for war-related lawsuits in Ukraine, amounting to $ 50 million after reinsurance recovery, but that number does not include the potential payment for planes stranded in Ukraine.

Insurer Beazley hit by $193mn investment loss as markets sour Source link Insurer Beazley hit by $193mn investment loss as markets sour

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