(Reuters) – Insurer and reinsurer Beazley Plc reported a 25% jump in full-year profit and said it expects premiums written to grow in the mid-single digits in 2014.
Beazley also announced a special dividend of 16.1 pence per share in addition to a 5.9 pence interim dividend.
“Over 50% of our business is in the United States, and with the U.S. economy continuing to do relatively well … we hope to be able to grow on the back of that,” Chief Executive Andrew Horton told Reuters.
Pretax profit jumped to $313.3 million in the year ended Dec. 31 from $251.2 million a year earlier as the insurer wrote more premiums and as fewer catastrophes on either side of the Atlantic Ocean meant it paid out lesser in claims.
Gross premiums written rose 4% to $1.97 billion.
Strong Underwriting
“The profit outperformance is mainly attributable to a stronger-than-expected underwriting result,” Numis analyst Nick Johnson wrote in a note to clients, upgrading his rating on the stock to “buy” from “add”.
Beazley also reported an 8% fall in net insurance claims and a combined ratio of 84, its lowest since it listed on the London Stock Exchange in 2002.
Combined ratio is a measure of profitability used by insurance companies. A ratio below 100 means it earns more in premiums than it pays out in claims.
“The 2013 Atlantic hurricane season was the first since 1994 to end with no major hurricanes and, overall, our claims experience has been relatively light,” the company said in a statement.
Catastrophe insurance contributes less than a tenth to Beazley's revenue, leaving it less exposed than fellow insurers to losses from the floods and hailstorms that have devastated Europe in recent months.
Net premiums rose 7% at Beazley's speciality insurance line – which covers professional risks for lawyers, architects and engineers and rakes in more than 40% of overall revenue – with a 3% increase in premium rates.
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