Sec­ond wave may dou­ble Covid-re­lated losses, in­surer Bea­z­ley warns

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

IN­SURER Bea­z­ley came un­der fire yes­ter­day as it re­vealed a sec­ond wave could dou­ble its losses from Covidrelat­ed claims to $340m (£267m).

Shares in the Lloyd’s of London in­surer, which sells com­mer­cial in­sur­ance prod­ucts, tum­bled more than 14pc as it told in­vestors that con­tin­u­ing high lev­els of in­fec­tions would lead to a slew of event can­cel­la­tions. The com­pany said it was par­tic­u­larly badly hit as sell­ing cover for con­fer­ences in the US and UK was its big­gest busi­ness and most of these can­not go ahead due to gov­ern­ment re­stric­tions.

It warned con­fer­ences that were pre­vi­ously post­poned were now be­ing can­celled, caus­ing an in­crease in its ex­pected losses. The in­surer also an­tic­i­pates claims for events in 2021. Mean­while,

Boris John­son told MPs that con­fer­ences could not go ahead from Oc­to­ber, as pre­vi­ously planned, due to a flare-up in cases.

The up­dated es­ti­mates are based on the as­sump­tion of a re­turn to “some form of nor­mal­ity” in the sec­ond half of 2021. But fur­ther dis­rup­tion through­out next year would lead to an ex­tra $50m of losses net of rein­sur­ance, Bea­z­ley said. Lloyd’s of London ex­pects its mem­bers to pay £5bn for Covid-19 claims. The prospect of a fur­ther tranche of claims against in­sur­ers has sent share prices tum­bling. His­cox closed down 2.5pc while RSA fell 4pc.

Bea­z­ley had pre­vi­ously warned of un­cer­tainty over its fi­nal Covid bill. But an­a­lysts were un­im­pressed with its fail­ure to in­di­cate that its ex­po­sure could dou­ble in the event of a sec­ond lock­down, in­clud­ing be­fore a £247m fundrais­ing in May and its half-year re­sults in July. Philip Kett, an in­sur­ance an­a­lyst at Jef­feries, said: “Given that there was no change in the es­ti­mate for Covid-19 claims in Bea­z­ley’s … re­sults, it’s dis­ap­point­ing that man­age­ment have now lifted the guid­ance from $170m to $340m.”

Bea­z­ley hopes to take ad­van­tage of a rapid in­crease in prices. These were 13pc higher by the end of Au­gust.

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