Quake in Chile takes toll on Beazley profit

LLOYD’S of London insurer Beazley yesterday said it expects to pay out as much as $75m (£49m) in claims following February’s earthquake in Chile.

Analysts said the losses would reduce the Dublin-based insurer’s pre-tax profit for the year by £10m to £142m, although the group’s exposure to the event was minimal compared to its peers.

The insurance market is estimated to lose between $5bn and $8bn from the catastrophe.

“Uncertainty still surrounds the full scale of the losses and, as a result, estimates of the insured loss vary considerably among analysts and catastrophe modelling agencies,” the company said.

The insurance industry has received an above average number of claims for the start of the year following the natural disasters in Chile and Haiti and will be hoping for a quiet hurricane season this summer.

Beazley says it has reinsurance in place should the losses in Chile increase and that cover exists for any future catastrophes in 2010.

According to Chile’s new President, Sebastian Pinerait, it will cost $20bn to rebuild the country following the 8.8 magnitude earthquake that killed nearly 500 people and left 1.5m homes damaged.

A special fund has been set up to rebuild around 300,000 houses plus hospitals, schools and roads, he added. Much of the construction work will be paid for by income from the country’s copper exports.

● In 2009 Beazley made a pre-tax profit of £100.7m.
● Beazley began underwriting in the United States in 2005 and, in 2009, wrote gross premiums of $370.7m.