London-listed insurer Beazley has said it is harnessing “the best of the innovation and fresh thinking that has come out of this period” after posting a pre-tax loss of some $51 million for the year ended 31 December 2020.
In 2019 it made a profit of $267.7 million.
Beazley said that the global pandemic impacted a number of lines of business, most notably its contingency book where it quickly settled claims arising from cancelled or postponed events:
“The global events and hospitality sector has been a very successful area for Beazley for many years and we are working closely with clients to provide financial support and flexibility around coverage ahead of its return to full strength in more normal times. In total our booked first-party losses related to COVID-19 have reached $340m. We took action when we saw that COVID-19 was likely to impact the economy, and this strategy, allied with our underwriting action over the previous year in anticipation of a future recession, will mitigate the impact in our longer tail liability classes, where claims are expected to materialise from 2021 onwards.”
On a more positive note, Beazley delivered strong premium growth in 2020, with premiums rising 19% to $3,563.8m (2019: $3,003.9m) in a market that saw rates respond sharply to heightened claims activity in many lines of business. However, the pre-tax loss was driven by a combined ratio that deteriorated to 109% (2019: 100%) that it described as disappointing.
Beazley underlined its continuing efforts with regard to climate change: “As an insurer we must manage our exposure to multiple, interconnected risks, including the actual and future effects of climate change. Beazley actively manages its carbon footprint and participates with industry to reduce our impact and support a lower carbon economy. In 2020 the board increased its focus on both the risks and opportunities arising from climate change and worked with management to refine and develop our Environmental, Social and Governance (ESG) strategy.”
It added that the challenging events of the past 12 months have been the catalyst for improvements to how it works and trades, noting that he pandemic has brought about lasting and positive change:
“As a board, our responsibility lies in protecting the financial health of our business and ensuring we have the right people, investment, and risk appetite to deliver on our promises. We depend on our motivated and engaged people supported by Beazley’s strong culture, to continue growing and developing as a business. In the last 12 months we have focused extensively on the physical and mental wellbeing of our people.
“The resilience of colleagues and the positive attitude of management to understanding people’s unique circumstances has shown the company at its best. We have made further progress in broadening the diversity of our workforce, with good progress against our current targets. However, we all recognise we have more to do and as such the board has agreed a set of new stretching targets for the business.”
Beazley added that , in line with its board composition strategy, it has sought to bolster the diversity of its board as well as seeking to ensure the board has access to the relevant skills and experience to support and challenge management as they execute its growth strategy: “We are pleased to have appointed Pierre-Olivier Desaulle to the board, and are seeking to appoint an additional director with experience of US markets”.