Insurer Beazley swung to a loss in 2020 as it was hit hard by pandemic-related claims for cancelled or postponed events, but said it was confident of returning to profit in 2021.
Beazley, which provides cover for events ranging from major conferences, music tours and sports tournaments to village fetes, weddings and birthday parties, has been hit by a wave of cancellations due to the global health crisis.
The company reported a pretax loss of $50.4 million pounds for the 12 months ended Dec. 31 versus a profit of $267.7 million a year earlier, with total first-party losses related to the virus reaching $340 million.
“Despite the volume of information, data and predictive analytics at our fingertips, we didn’t foresee the events of this year……the unprecedented challenge has taught us valuable lessons, from how we operate to the need to review the stress testing of our realistic disaster scenarios,” Chief Executive Andrew Horton said.
Beazley said a review of those scenarios was underway, looking at their “ongoing efficacy and ability to respond to new information or to an event that escalates beyond the initial assumptions built into the stress test.”
Insurers across the world have been wrangling over policy wordings with their clients as the pandemic created unparalleled claims requests from business shutdowns to event cancellations.
Still, Horton said 2021 could be one of the company’s strongest in over a decade as the industry has absorbed the bulk of its pandemic-linked losses.
Beazley’s combined ratio came in at 109%, slightly lower than the 110% it guided to in November but well above the 100% reported a year earlier. A level below 100% indicates an underwriting profit.
The company guided to a low-90s combined ratio for 2021 assuming average claims experience and said it was confident in reinstating dividends during the course of the year.