By Muvija M
(Reuters) - Beazley's <BEZG.L> 2019 profit was boosted by higher insurance rates after a long period of erosion, sending the underwriter's shares 6% higher to the top of UK's midcap index.
Beazley, part of the oldest insurance market in the world, was able to raise its premium rates last year after a string of industry-wide catastrophe claims led to hefty bills in 2018.
"Natural catastrophes took a smaller toll on our business than in 2018," Chief Executive Officer Andrew Horton said.
The share price had climbed 5% to 559.5 pence by 0857 GMT.
Estimated costs due to Typhoons Faxai and Hagibis in Japan and Hurricane Dorian in the United States stood at about $80 million (61.7 million pounds), the company said.
That pushed up combined ratio to 100% for the year ended Dec. 31 from 98% a year earlier, but came in at the lower end of its forecast of 100%-102%. Readings over 100% indicate claims exceeded premiums earned.
The Lloyd's of London insurer, which provides casualty and property, cyber and political risk insurance, forecast prior year reserve releases to be below average in the current year.
Nonetheless, Beazley's pretax profit shot up to $267.7 million from $76.4 million in 2018 as it witnessed a 15% jump in gross premiums written and strong investment returns with falling U.S. yields pushing up bond prices.
"Though 2019 was another relatively disappointing year for the industry, Beazley's results were better than we feared, leading to a comfortable beat of an admittedly low consensus," Jefferies analysts wrote.
Beazley said it expected double-digit premium growth in 2020.
The year has started on a back foot for insurers with hundreds of properties in Australia destroyed or damaged by bushfires and the coronavirus epidemic shutting down some business in China, where the virus was identified.
(Reporting by Muvija M in Bengaluru, Editing by Sherry Jacob-Phillips and Nick Macfie)