Year of natural disasters will cost us $150m, says Beazley

LLOYD’S of London insurer Beazley has said the devastation caused by hurricanes Harvey, Irma and Maria, as well as the recent earthquakes in Mexico, will likely dent earnings by $150m (£112m) this year.

The insurer warned that the net cost of the catastrophes would likely be in the range of $175m to $275m, thereby shaving millions off its profits for 2017.

However, the insurer’s shares jumped 4.3pc on the back of the profit warning, with analysts noting that the market had expected a bigger impact on the group.

“We expect the market to breathe a sigh of relief with this announcement from Beazley,” said Eamonn Flanagan, a Shore Capital analyst, pointing out that they had previously forecast earnings to be around $280m lower.

“The recent fall in the stock price of the company… had implied a considerably greater hit,” he said.

The announcement comes a day after Lloyd’s of London warned that it faced a $4.5bn bill from hurricanes Harvey and Irma, with Inga Beale, its chief executive, confirming that “there will certainly be an impact on profit” following the recent series of natural disasters.

Floods like the one caused by hurricane Harvey are supposed to happen once every 500 years, while Irma was one of the strongest storms ever recorded. The insurance sector was trying to estimate the cost of claims from the deadly storms when hurricane Maria brought “catastrophic” 155mph winds to Puerto Rico, and deadly earthquakes struck Mexico.

The sector is also coming under pressure to do more to help limit damage to the environment after scientists said the scale of the destruction seen this summer has been exacerbated by man-made climate change.