British insurance company Beazley Plc (BEZ.L) Friday reported a surge in profit for the first half, reflecting higher sales and an exceptional foreign exchange gain. The company also said current competitive market conditions are likely to continue, which is expected to place upward pressure on premium rates.
The company's pre-tax profit for the first-six month period was US$115.5 million, up from US$30.1 million recorded last year. Latest period results included an exceptional foreign exchange gain of US$33.7 million.
Profit was US$97.9 million or 18.1 cents per share, higher than US$31.2 million or 7.1 cents per share a year earlier. On a per share basis, earnings improved to 12.6 pence from 4.9 pence in the prior year.
Half-yearly revenue increased to US$701.6 million from US$588.2 million in the comparable period.
Gross written premiums grew 5% to US$940.6 million from US$894.6 million reported in the same period previous year, helped mainly by the growth in reinsurance and specialty lines divisions. Net premiums written increased to US$624.7 million from US$512.3 million in the prior year.
Net earned premiums were US$678.2 million, up from US$538.1 million last year. Net insurance claims for the half-year increased to US$377.2 million from US$314.2 million.
Segment-wise, specialty lines reported revenues of US$309.4 million, up from US$285.7 million generated in the comparable period. Revenues from marine division increased to US$117.3 million from US$113.6 million in the previous year. Property revenues were US$144.8 million, higher than US$114.9 million last year, and Reinsurance revenues grew to US$92.0 million from US$67.5 million in the prior year.
In April 2010, the company announced a change to its reporting currency to US dollars, reflecting the growth of its dollar denominated premiums and the fact that the capital supporting the business is largely held in dollars.
Change in gross provision for unearned premiums lowered to US$63.5 million from US$202.4 million reported earlier.
Beazley said its original loss estimates range of US$55 million to US$75 million for the Chilean earthquake, based on a market-wide loss of US$5 billion to US$8 billion, and Deepwater Horizon rig of about US$6 million remain unchanged. The company also said European Windstorm Xynthia was not a significant loss event for it.
Chief Executive Officer Andrew Horton said, "Current competitive market conditions are likely to continue. Investment yields remain low, which should place upward pressure on premium rates, but capacity in all but a few lines is plentiful."
The board declared an interim dividend of 2.4 pence per share, up from 2.3 pence last year, which would be paid on September 3, 2010 to shareholders on the register on August 6.
BEZ is currently trading at 123.10 pence per share, up 1.10 pence or 0.90%, on the London Stock Exchange.
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