Compared to 2010, specialist insurer Beazley appears to have had a very difficult year although in insurance the bare numbers do not always tell the story.
Profit before tax for the 12 months to the end of December were $62.7m against a 2010 total of $250.8m.
A 75% drop in profits doesn't look great but then in insurance no two years are alike, and Beazley, like many others will be hoping not many years are like 2011.
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It faced flooding in Australia and Thailand, an earthquake in New Zealand, the earthquake and tidal wave in Japan and the most deadly tornado season in the US for 70 years.
On that basis, says the firm, to achieve a profit at all is an endorsement of its business strategy.
A key metric for insurers is the "combined ratio" which measures claims and expenses against total income from premiums with anything below 100% indicating profits. Beazley's combined ratio for 2011 was 99%.
This includes a 2% drop in gross written premiums to $1.7bn. Net written premiums also fell 2% to $1.4bn.
Earnings per share fell from 27.4p in 2010 to 8.1p in 2011, net assets per share dropped to 137.6p from 139.5p.
Beazley's dividend for the year will be 7.9p including an interim dividend of 5.4p. The full-year dividend for 2010 was 10p.
The divisions of the business which really suffered from catastrophe events were property and reinsurance which produced ratios of 109% and 157% respectively. The speciality lines divisions, Beazley's biggest, achieved a combined ratio of 94%, with marine coming in at an impressive 72%. Political risks and contingency achieved 79%.
Beazley does not believe subsidising losses with investment returns is a viable strategy in the current climate, and implies some its rivals may run into trouble applying this approach, specifically in insurance for architects, engineers and lawyers.
Its own investment yield during 2011 came in at 1%, stable on 2010. The company has 81.5% of its assets in AA- or higher-rated investments.
The company had previously announced its Chairman, Jonathan Agnew, would be stepping down. We now know his replacement will be current board member Dennis Holt, who will replace Agnew on March 27th.
Commenting on the full year results, Beazley's Chief Executive, Andrew Horton, said:
"Beazley delivered an underwriting profit in 2011 - a strong performance in the worst year on record for insured natural catastrophes. The market remains competitive for many lines of business but, overall, we expect profitable growth opportunities to increase in 2012."
The market appears to not quite agree with Mr. Horton. At 08:10 the stock was down 1.9%. Over the last 12 months, however, Beazley is still up 18%.
