Beazley reports higher profit, limited LA wildfire losses

(Reuters) — British insurer Beazley’s shares hit a record high Tuesday after it beat annual pretax profit expectations and estimated its losses from the Los Angeles wildfires would be much lower than those of its peers.

Beazley reported a pretax profit of $1.42 billion for 2024, up 13% from 2023 and 9% ahead of consensus, according to Panmure Liberum.

The Lloyd’s of London insurer also launched a $500 million share buyback.

Last year was tough for insurers as large-scale hurricanes in the United States weighed on earnings, while devastating Los Angeles wildfires kicked off this year on a sour note.

Beazley CEO Adrian Cox told Reuters he does not expect the impact from the wildfires to affect the company much, but said the rising dangers of climate change will put pressure on the industry and insurers will need to be “very careful” about how they underwrite that.

Beazley on Tuesday gave an initial estimate of an $80 million impact from the California wildfires, well below peers that have estimated hits of $100 million to $170 million, including Lancashire, which expects up to $165 million in losses from the fires.

Shares of Beazley rose as much as 3.2% to an all-time high of 923 pence.

Analysts estimate insured losses from the wildfires could reach as high as $20 billion, potentially making it the costliest disaster in California’s history.

Insurers have profited from higher premiums over the past few years, although prices declined in the latter half of 2024.

“Our central estimation is that they will go down a little bit again this year,” Mr. Cox told Reuters.