- Beazley and Lancashire shares rally
- Lancashire to pay a special dividend
- Conduit Holdings shares drop 10%
Given the succession of devastating storms which hit the US this autumn, investors in insurers covering catastrophe loss had every right to be nervous when it came to reporting season.
In the event, two of the biggest UK-listed property and casualty insurers - Beazley (BEZ) and Lancashire Holdings (LRE) - posted solid results with Lancashire holders treated to a special payout, but in contrast Conduit Holdings (CRE) disappointed.
SHARES GAIN GROUND
Beazley reported a 7% increase in written premiums to $4.625 billion for the nine months to September, largely driven by property premiums up 24% while cyber coverage was up 6%, and the company maintained its full-year guidance.
Its initial view of the net exposure to Hurricanes Helene and Milton was between $125 million and $175 million, which seemed to mollify investors as the shares added 29p or 4% to 799p.
Lancashire reported a 9% increase in nine-month written premiums to $1.7 billion, which marked an acceleration from the half-year stage, while net losses due to weather events were estimated at between $110 million and $140 million.
Following what the firm called a ‘strong operating performance’ year-to-date, it announced a $180 million special dividend, equivalent to $0.75 or 58p per share, sending its stock price up 60p or 9.5% to 689p.
ODD ONE OUT
Less favourable was the reaction to results from Conduit Holdings, whose shares dropped 55p or 10% to 488p despite a 25% increase in written premiums to $957 million for the first nine months.
The firm’s exposure to catastrophe events in the third quarter alone – including wildfires and floods in Canada and the impact of Hurricane Helene on the US and the Caribbean – was in the region of $50 million.
As a result, the nine-month combined ratio – which measures profitability, a lower number being better than a higher number – was in the mid-90s percent against previous guidance of low 80s percent.
Hurricane Milton, which arrived in October after the end of the period, was expected to add another $30 million to $50 million of losses, after the company increased its quota share of the reinsurance market.
