Beazley Gains on Catastrophe Avoidance, Dividend: London Mover

Beazley Plc, the best-performing Lloyd’s of London insurer this year, rose for a 10th day in 11 as investors focused on its increased payout and an avoidance of catastrophes such as Superstorm Sandy.

The shares closed 0.1 percent higher at 210.7 pence, 0.2 pence below its highest since the company first listed in 2002. Beazley, which has risen 11 percent since publishing full-year results a week ago, is up 19 percent this year compared with a 7.3 percent gain in the FTSE All-Share Non-Life Insurance Index.

Beazley said last week it would increase the full-year payout 5 percent to 8.3 pence a share and pay a special dividend of 8.4 pence as it had more capital than it needed.

“The market has seen a nasty deterioration in marine losses rising from the storm from which Beazley has relatively limited exposure,” said Charles Graham, an insurance analyst at Bloomberg Industries. The increased dividend shows the company’s capital is growing much faster than its revenue, he said.

The Dublin-based insurer left its estimate of net losses from Superstorm Sandy, which hit the east coast of the U.S. last year, unchanged at $90 million. Rival Catlin Group Ltd. raised its estimated of net loss on the storm to $225 million on Feb. 8 from a previous estimate of $200 million. The disaster will cost insurers $20 billion to $25 billion, according to Risk Management Solutions, a catastrophe modelling firm.

Beazley is also benefiting from a lack of exposure to the loss of Carnival Corp.’s Costa Concordia, which was shipwrecked on the Italian island of Giglio on Jan. 13 with the loss of at least 30 lives, Graham said.

Beazley’s combined ratio, a measure of profitability that measures insurance payouts against premiums, fell to 91 percent last year from 99 percent in 2011 and is back to the levels it achieved between 2006 and 2010, the company said in its earnings statement on Feb. 7.