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UK insurer Beazley shares surge after $300 million capital return pledge

Illustration shows Beazley logo

LONDON (Reuters) - Shares in Beazley surged more than 9% in early trading on Thursday after the British insurer pledged to return around $300 million in capital to shareholders following a strong performance in 2023.

Beazley, which is due to report year-end results on March 7, said its undiscounted combined ratio - a measure of underwriting performance in which a level below 100 indicates a profit - had improved from low-80s to mid-70s last year.

The stock gained 9.3% to 635 pence by 0822 GMT.

Insurers have met the challenges of claims related to events such as COVID-19, climate disasters and the war in Ukraine mainly by raising premium rates and excluding some business.

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Analysts at Jefferies said that strong pricing over recent years would open the door for recurring capital returns and said they were forecasting a $200 million buyback per year for 2024-25.

Beazley said it would confirm the exact amount and method of the capital return, which will be paid alongside dividends, next month.

(Reporting by Kirstin Ridley, editing by Carolyn Cohn and Sinead Cruise)