Beazley to pay special dividend as 2012 profit triples

Lloyd’s insurer Beazley made a 2012 net profit after tax of $214.6m (£137m), which was more than three times the $65.8m it made in 2011.

The company’s gross written premium (GWP) increased 11% to $1.9bn (2011: $1.7bn), and its combined ratio improved by eight percentage points to 91% (2011: 99%).

The results were also boosted by a surge in investment income to $82.6m (2011: $39.3m).

Return on equity jumped to 19% in 2012 from 6% in 2011.

Global (re)insurers’ 2012 results will generally feature big improvements over the prior year because, despite Superstorm Sandy, there were fewer natural catastrophes.

Following its strong result, Beazley will pay an interim dividend of 5.6p a share and a special dividend of 8.4p a share. Together with the previous interim dividend of 2.7p, total dividends declared in 2012 were 16.7p a share.

The company has also offered to buy back £150m of its bonds from the current holders, and revealed plans to issue a new sterling-denominated retail bond under its £250m euro medium term note programme.   

Beazley chief executive Andrew Horton said: “Beazley performed very strongly in 2012, delivering double-digit premium growth and record profits. We continue to add new products and lines of business to our diversified portfolio and see further opportunities to grow profitably in the year ahead.”

He added: “Today’s announcement of a special dividend, a debt buy-back and plans for a further retail bond demonstrate our continued active approach to capital management. Our focus is on generating value for shareholders while maintaining our financial strength and flexibility.”

A further positive for the company is that rates on its renewal business increased 3%, compared with a 1% increase in 2011.

The company announced that its $90m estimate of losses from Superstorm Sandy, which hit the US last October, remains unchanged.